Euro Zone Crisis

Picking up an a comment from The Quiet Man on an adjacent thread I have opened this new thread to stimulate some serious comment on how the Euro Zone Crisis will or could affect our community and our ability to enjoy our assets.

TQM said 'has anyone thought how they will be affected if Spain go the way of Greeece and Italy? Interesting observation and I watch with nervousness the scenes we see in Italy, Greece, UK of social unrest in major cities. The people of Spain are about to see cuts to their real income that will make ours in the UK seem tame.

With approaching a quarter of the spanish working population out of work, we visitors will need to re think how we go about our business and certainly visiting Murcia and other large cities could become much more hazardous than it currently is. We are obvous easy targets after all.

Like it or not people like us on CDA are considered to be wealthy 2nd home owners. Security of our complex may become an issue and the change of government this weekend may trigger more stealth tax charges on foreign property owners.

I would like to hear any comments from people who have thought about this without descending into the doom and gloom that usually thrives on forums when trouble is looming. This is really about us as a community being prepared to deal with challenges that may arise and collectively we will have some good solutions. Forewarned is forearmed as they say.

I hope I am being slightly too pessimistic as I am generally the opposite of that, but I know there are some clever people on this forum who's views would help us all understand better what may lie ahead.

Jon Faulkner 

Good thread Jon.

I have often wondered what the collapse of the Euro as a currency would mean to me as a non-resident property owner with a Euro mortgage.  Tried to search various times on the internet to find some information in layman terms but nothing of assistance.

The considerations you set out below all valid and require thought too.

Hopefully someone who understands the impact the crisis could potentially have on us will be able to provide some informed analysis.

i Faulky

Your comments are very interesting & I am not sure if mine will add any reassurance as the world @ large is in a financial crisis. However, during the last financial crisis, which if my memories serves me correctly was in the early 90`s

We holidayed in Portugal staying in a large villa owned by a friend of a friend who was also worried about the safety of her property.

Speaking to a number of locals in the supermarkets etc I asked the question.

Will the Portuguese people feel any animosity towards foreign property owners & tourists.

The conclusions we came to was that if the home was very rarely used then yes there would be some jealousy however if the property was used or rented out & it gave a job or jobs i.e. cleaners or gardeners etc then no. because it gave employment to local people. Visitors who used restaurants , hotels & supermarkets were also helping keeping local businesses open & jobs continuing.

I know that Condado is different in as much as most property managers are home owners but there is still jobs for the  locals re the security & gardeners etc so hopefully local people will be aware of that.

looking on the not so bright side, we could take the thought nearer to home & say what about the feelings of Uk locals on the bread line, how do they look at those of us that own their own homes.

I think its a subject best ignored otherwise none of us would sleep at night.

Jan

This message was last edited by Hamibabe on 22/11/2011.

Jon, I have been pondering this question for some time without really getting anywhere. I don't think its a subject best ignored as 'head in the sand' never made a problem go away. I have closely watched the developments in Ireland, Greece and Italy and hope- like so many others- that Spain can hold itself from the brink. I expect there is much hidden information and Spain are likely teetering close to the brink but not quite close enough yet to completely scare the markets.

I too think we will see some tax rises pertaining to our ownership of non residential and residential properties, tighter controls on income from property rental and on who you pay to work for you as keyholders/cleaners. Closer checks made on self employed people relating to paying their taxes if they are residents.  I wonder if other taxes will be introduced and how mortgage payments may be affected. We have just over two years left on an interest only mortgage on one property and I'm not looking forward to what it could mean to us when that term ends and we move onto another mortgage. At one point I did wonder if there was going to be civil unrest and until more news on cuts and taxes is made I think we just have to wait and see on that issue.

I'm sure major efforts are being made to shore up reserves but wonder about the reality of the sort of investment needed for Paramount Park should things become even more dicey.

I hope the resort will be secure enough if there are concerns about property safety, but we do at least have security.  I too hope that the use of the apartments may be seen as a way of bringing income and work into the area. I know if you go into Murcia and other major cities there are far more beggars and men suited and booted on corners holding signs asking for work. I'm hoping the Ministerial changes this week will bring a sea of change but I expect we are going to have dig deeper financially.

 I think my wording of ignoring the issues was misplaced but the last thing I would want is to  frighten people. 

I have just heard that one of the big major  holiday companies is in serious debt  which could add to the ever growing long list of unemployed & I do wonder just when we as a country & the world in general will ever come out of this financial tunnel.

We too have pondered about keeping or trying to sell our apartment which would ease our future finances.

I had hoped to retire @  60 but in order to enjoy Condado & our apartment I can see me working for a few years yet & am greatful that I still have my health.

So for now I do have to admit that I am becoming more like an ostrich but at least that way I can sleep @ night.

As for Paramount. I was very sure that it would eventually go ahead however I have to say that I now have my doubts.

Though still not a member of the half empty club I am keeping my fingers crossed for the near future.

Jan

It is another worry, no doubt, but until there's any concrete information its just a matter of sitting tight. I think in the best case scenario the euro crisis will cost us more money to own our Spanish apartments as for worst case- who knows.

My in laws have mothballed their apartment and plan to put it on the market when they feel the time is right, they have had no faith that Paramount will happen or that it will produce the mirical everyone wants for CdA- they also meant to cut costs to a minimum and just covering the basic outgoings and not visiting CdA has done that.. Unfortunately with so many CdA apartments on the market sale isn't a viable prospect. But, it is one we all talk about regularly.

Quietman

                      Must have been a while since you were last on the resort as last time I was out on Condado I found that there weren't much apartments up for sale compared to this time last year.I know the banks still have some but for sale signs on apartments had greatly reduced.

Also regarding investment in Paramount there is another way of looking at it, if you are a private investor and  the project goes ahead this is a good time for them to invest simply because in the currently climate they would be able to demand more of a percentage for their money than if the market was buoyant.

Kev

I don't agree with any concern about property safety, even in Greece all the protests are aimed at government, not property, Condado has a large number of Spanish residents so its not Brit only areas, I would also be surprised to see any large tax increases on property sales or oversaeas owners as this would almost certainly destroy the remanents of the Spanish construction industry, I would think that the new government would try to encourage overseas investment, and try and kickstart the property and construction sector, but no point in worrying at the moment as no body knows what will happen, at least we have a built resort and facilities that are improving as things get released by IRM

I think it’s only a matter of time before Spain and Italy require a bail out like Greece, Ireland and Portugal. Bonds have both touched on 7% in Spain & Italy which is apparently the point of no return, when debt becomes too large for the country to service. Both Countries will tell the world they are fine and can get through this crisis, but they can’t say anything else. If they admitted the state of their finances, they would spook investors and fail in days.

The problem is that Italy is the third largest economy in the Euro (after Germany & France) and Spain is also very large. Both are too big to bail out.

I think the Euro is destined to fail. I imagine there will either be a 2 tier Euro or some countries will go back to their former currencies.

Had Spain kept the peseta, then they would have had far more room for manoeuvre, they could have cut their interest rates or devalue their currency. This would have made Spanish Exports and Spanish Holidays seem cheap to foreign investors and would have brought lots of money and employment back into the country.

To sum up, I think Spain & Italy will require a bailout. I don’t think the “Richer” Northern European Countries will be able to afford it, so the Euro will break down. I think Spain will devalue their “New” Currency and this will mean your apartments are worth less. This will be a good think for those with Mortgages as their debts will be less and their payments along with their holidays will be a lot cheaper.

I am not too concerned with property safety as I think any unrest or increases in crime will be mainly confined to the inner cities

TQM  you don't even own on condado you just jump on any post and when you have a few replays

you love it out come the in laws and you knowledge of the world

and then when you get told your are wrong or to stop stirring the s**t you delete your posts,go away and get a life .

PS

if you see your in-laws ask them to mothball you

this is a first I actually agree with Darren, the euro is dead, the Germans will not carry on bailing out the poorer countries, the only solution is to split up the euro, and let each country to go it alone

 http://uk.finance.yahoo.com/news/Is-time-sell-European-tele-1415425726.html;_ylt=AsYj8BX4xZfguJS.zm_yOQ3Sr7FG;_ylu=X3oDMTE4dTdzdG82BHBvcwMzBHNlYwN5ZmlUb3BTdG9yaWVzBHNsawNpc2l0dGltZXRvc2U-?x=0

The above news story has just appeared on Yahoo finance, and basically says what I said below. However it doesnt mention that if you have a mortgage on your place then the value of that mortgage and the cost of the mortgage will also fall, so not all doom and gloom.

My property is worth about 70k Euros and I owe about that, so let the Euro fall in value and my debt will be much easire to repay, shame about the 60K euros I have lost on the property, but maybe in 20 years or so I can recoup some of that.

 Hi Darren

Sorry you have lost so much.

We are in a better situation as we bought off plan when the pound / euro  exchange was excellent so we are in the fortunate position of having a full morgage to pay off but have lost very little in monatary value but have gained a lot by having as many great holidays a year that we want  & lots of great new friends. Also I guess we are older than you, I suspect I am a LOT older than you so am looking forward to retiring to the sun in a couple of years time. 

My boss is in a similar position to you as he bought on Hacienda Requelme & is keeping every thing crossed that Paramout will eventually become a reality. & as he often says. " there are children in much worse situations here in the uk & abroad", so he still conciders himself to be very lucky, extremely poor, but still lucky & I supose thats the way we all need to look at things at the moment.

Best of luck to you for the future.

Jan

Intresting read in the money section of the Daily Express to-day explaining  if the Euro was to fail how it would effect  you if you have savings in a foreign bank or own a holiday home in Europe to read the full story click on the link

www.express.co.uk/money/view/285368/Don-t-bank-on-the-survival-of-the-euro

Graham

I do own on CdA and so do  some family members.

There are less signs advertising properties I think because they were told to remove them. There are plenty still advertised on various property estate agent sites. But if it's true we have far fewer than I thought then thats good news. I was at CdA in August.

barri, I have deleted posts because I'd clearly misread a situation and felt it was unfair to leave the comment.

Interesting reading in the Express.

I think the germans can't afford the euro to fail.

They have done so well by having a weaker currency for exports outside the EU and having the same currency as euro countries where previously they were much stronger.  Basically made german goods more competitive.  If they lost the euro there's not a chance they would export to many EU countries as their goods would simply be unaffordable.

But then again nothing seems to make a lot of sense these days!!

Personally don't think there will be much of an impact on CdA...possibly a break from the euro would positively affect the economy if not the short term value of property.  The one downside is that once again going on holiday would require a calculator for shopping!!

Am at a good age with life expierences. Some really really good. Some really really bad. Dont bury my head in the sand, but have realised that  (A) Not worth worrying about something that has not yet happened. As an unforseen event may mean it never does.Likelihood an unforseen event created the problem in the first place. (B) Also not worth worring about something over which I have no control.

When I was younger, older people would tell me to be grateful I and my family still have our health.  Now have the age and expierences where I fully understand what they meant.

Whatever changes happen in the Eurozone (If they should). And particularly in Spain. I shall make whatever adjustments I need to make in relation to those changes.Until then I and my family and friends, shall "Enjoy" my lovely place in the sun.

Hasta pronto

There you go folks, just ask FRANK !!   

common sense approach

Here, here Frank

Here, here Frank