Friday, June 26, 2009

Really cheap rents

Spanish Stock Of Unsold Homes 613,512 At End Of 2008 - Govt

I think long term Spanish people do well from this. They have access to an abundant supply of cheap property, when they get back on their feet they can buy whatever they like instead of feeding an insatiable mortgage. No mention of the fact that when Spain entered monetary union, the final euro value of the peseta looks in retrospect way way too high, a real gift to the German economy.

Posted by stillthinking @ 12:13 PM (1204 views)
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4 thoughts on “Really cheap rents

  • The glut of new properties built in Spain are mostly by the coast; but the centres of economic growth are the cities. The Spanish will soon have oodles of cheap housing but no jobs nearby.

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  • I cant read the article (subscription only), but I last visited Spain (Costa Brava and Blanca) about a year ago. I was surprised by the amount of for sale and for rent signs dotted along the new build apartment blocks and urbanization along the coast. I can quite believe that the stock of unsold / surplus housing is approaching 3/4 million properties.

    Drewster is correct ( @1 ) where he implies that there is a problem in having an abundance of house available where there is little (or just seasonal) work. I can’t help thinking that (sunshine aside) this parallels some of the development trends that we’ve witnessed recently in our Norther Cities. A lot of flats and apartments have been built over the last 10 years, this, although not initially sold cheaply, have become more affordable ( not yet cheap) …….. the only problem is that the local economies have taken such a battering that regular well paid work will not be easy to find.

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  • Most but not all of the new build properties are on the coast, there are entire “new towns” near Madrid, for example, that are currently practically “ghost towns”… (see http://www.bbc.co.uk/blogs/thereporters/markmardell/2008/02/a_wellmanicured_spanish_ghost.html).. these were, by and large, supposed to be affordable for ‘ordinary people’… also not to forget that while the English dream (for some) may be to own a house on the coast in Spain, the Spanish dream is much the same: a first home (a flat) in the town where they work, but they want a second house on the coast… in Spain.

    Also, not to forget that this is the official figure from the government who want to downplay the crisis, the true level is likely to be well in excess of a million unsold properties.

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  • Spain has huge amounts of relatively barren land that no-one gets too bothered about when houses are built.

    Construction has become the bedrock of their economy, and the lack of it is now crippling them.

    There is a logic that says that Spain should fall over backwards to get people from other parts of europe to move there, (especially retirees) to not only soak up the excess of unsold property, but also keep the construction trade alive.

    If British pensioners were offered nice new Spanish homes at construction cost alone, it would not only create a further exodus, but would also highlight just how over-priced British property has become, while releasing many UK properties onto the market.

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