Thanks for the memor....straws...

I have put a deposit down on a ground floor apartment in block 10 with a purchase price of 215,000 which I saw just over a week ago.  Could someone advise if they feel this is worth investing in as I want it purely as a rental.

 

Thanks

VJ 

Buying at 215,000 Euros gives you a total at around 237,500 incl fees and taxes

14 weeks rental at say £425 a week gives 8400 Euros a year, thats around 3.5%

This doesn't include costs such as service charge, electric, local council fees, advertising and any mortgage payments etc etc etc.

Then of course theres the furniture, at least 15,000 euros shurely...

So what to do... I've bought for the lifestyle, its a totally fab development in a lovely part of Spain. If your in it for the long haul, great. Short term, I think there is a massive oversupply, couple that with rising interest rates and I think prices will drop to prices 3 years ago at least, meaning that if you absolutely have to sell, a future price in the short term of 175 to 185k euros would be realistic/possible. All the press say that Spanish construction companies shares have taken a beating as properties are not shifting. There should therefore be a dramatic reduction in future construction projects... but the short term damage is done. Having said all that I would still buy again!! Its great to be able to escape to the sun. Other property hot spots exist. Was chatting to a local well known Spanish estate agent two weeks ago considering marketing Cape Verdi... he chose not to as he said there was nothing there yet!! and didnt think there would be for another 5-10 yrs!!. Bansko, another hot spot is just not an option if you are a serious skier or boarder as it just can not match Europes infra structure.

To buy or not to buy in Spain at the moment, its a debate everyone has an opinion on. My only advise is buy with your head not your heart. I have ignored this and brought with my heart and dont regret it for a moment. Short term I think I'm stuffed, good job I have absolutly no intention of selling.

Good luck

P.S. no hate mail about my price predictions please! Reply in 3 years to that one!! Will take cash bets though. See you round the pool!!

Regards Andy :-).

 

 

Andy...I agree entirely with your view...I bought 12 months ago at a bargain price and feel very happy with my purchase and its location.  I don't think the numbers add up if you buy to let it unless its bought very cheaply...but it's no suprise that people in UK are still looking to buy abroard , as they will, to escape what is seen as an increasingly depressing place to live, right or wrong.

If  you were   RyF  what would you do with the prices?

Say  I had 2000 unsold apartments in the DV area that cost me around  Euro 100,000 each on average to build !!

If I am only selling about 50 apartments per month currently then its going take me 40 months to clear them all.  That's too long. 

Interest costs apply to each apartment at about 400 Euros per month.

Say  I need to increaese the rate of sale to say 200 per month to clear then in 10 months time to maintain my profitability (and even the company's survival).

Given the above scenario to sell the last apartment 30 months earlier through discounting will save only Euros 12,500 interest cost on that apartment.     

But I would need to reduce the price by much more the 12,500 Euros to move them all that quickly.   As someone previously suggested  just reducing the pricing won't fix the problem. 

So to move these units I would need to promote them in new markets (Russia, Eastern Europe, mayby China).  There are millions of millionaires now in China.  I would also want to improve the Duquesa  area  to increase it's attractiveness to new buyers.   OK I may throw in some free furniture packs and inexpensive offers.

But  deeply discounting the prices - no!  I would only do that if I was having a cash flow problem.  In such circumstances there would be some 'quiet discounting'  just to move sufficient units

to bring in the essential cash..

All of my company's top management attention (talent) is going to shift from building  to selling.  

It should be interesting to see what happens.

I too bought with my heart and not my head.  I saw a sea of tower cranes and forecast this current situation but I was sick of package holidays and wanted my own place in the sun.

No regrets here either, Jeff.   I enjoy my time in DV  and I  look forward to each and every holiday more than I've ever done before.

 

Paul

 

But Paul, they have already reduced the prices dramatically! Just an example a two bed in bloque 16 escalera 61 was for sale in 2004 for 291.000 and is now selling at 253.850. A penthouse in the same escalera is reduced by 39.200 Euros

laflauta

Yes  I know about those reductions - that started our original thread.  I was really talking about further reductions.

I got involved in April 2003 when prices were much lower but realistic.  Prices then went up in early 2004 and then down and then back up  a few  times.

It was never clear to me why they kept going up in the past two years other than being tactical increases to encourage people to buy before the next scheduled increase and given the impression of  a rising market. 

My guess is prices were reduced back downwards because the sales rate fell to near zero.

The prices  are now close to the 2004 base level and  more in alignment with the market today.

Hopefully the units are selling now albeit slowly.

The last time I was at DV in early September I notice a few sales agents showing prospective buyers around.

This is a healthy situation for we owners in one key sense.  It is a motivation for RyF  to keep or even improve the general appearance of the DV site to help secure the sales.

I guees we all watch and wait with interest.

One thing is sure for me.  I won't be selling.

But I do wonder how many institutional  'get rich quick'  investors are holding units in DV and waiting to off load them.  Those of the kind of buyers that don't help much. They created the bubble back in 2003/4.   When  I was over in April 2003  investors from London seemed to  buying 20 units at a time.  Most were hoping to flip them but some caught a cold and failed to move them or had to move them at near cost.

regards,

Paul

The trouble is that the prices are not close to the 2004 price list. They have fallen between 30-40.000 Euros, so if you were to sell now you would loose big time. I have heard of some buyers who have got their deposits back due to late completion. They obviously wanted out because of the price reductions and the market in general together with too much construction around Duquesa. I bought my apartment in 2004 and it has now decresed greatly in value and I am not too happy about it. Like you say, we will have to wait and see what happens.

My thought process when buying was that I wanted to own a property in Spain on a golf course by the sea and for me, my friends and family to enjoy that. Any rental income I could get would be a bonus.   I had always put off investing in a second property because the time was never right but the basic fact was that in the long term property always seems to hold or more often increases in value.  From this point it was a simple calculation.  How much will it cost me a month and do I want to spend that amount of money on this experience?  The answer was yes and nothing has changed, I am really enjoying the experience and hopefully the property will increase in value over the medium to longer term. The rentals are even going a lot lot better than I thought and I am really enjoying that side of it as well.  If I had approached it as a short term investment then all the warning signs were there with supply exceeding demand and it being a sellers market in 2003 so not being able to buy low etc.  Everyone's circumstances, motivations and ultimate goals are different so no shoe fits and never will.

I'm out again in DV tomorrow and cant wait, I love it.

Steve

Steve Have a good time. Can you check if AEA have put up the dog mess signs as they promised us. I have seen the prototype. Would be interested to see what the dirty pool is like at moment too.

I have started the process to buy in Duquesa Village Phase 2. What price do es anyone consider a fair price in today's market. Also opinions reference the slow sales, as I undersatand only half have been sold. That concerns me ref future values and maintaining the grounds. Anyone have an opinion? regards

Redcastle,

We've got loads of opinions but they are all just that, opinions.   In the UK we have the land register database where you can find out what prices properties have traded.  
In DV my guess is that very few have been   re-sold and that some of those that have been resold  were distress sales and thus the transaction value was not representative of the true market value.

It will be some time before the market settles and you get some clear visibility of the 'real' market price.

Where did you get your information  regarding  the fact that half had sold in DV?
At the AGM (3rd August)  this year only a 40% had been sold.

So if the sales have reached around 50% then that's good progress.

Regarding the site upkeep....
With 50% still to be sold,  the developer has a keen interest in keeping the site in good condition.
As I understand it,   the developer pays the community charges for the empty properties.  But others may correct me on that point.
All the participants on this board are all keen on site upkeep and we are in regular dialogue with AEA regarding various points about the communal area and other matters.

My impressions are the many of the owners have either not found these postings   or  they are  passive investors who are not participating in the community.

Good luck on your purchase.   I hope you become a regular contributor to this site along with the other owners. 
And maybe also contribution to the Wiki?

regards,
Paul

THanks for your warm welcome. The 50% sales was a ball park figure given to  me in  early October by a permanent resident.  It does concern me if a high % of completed sales are mulitple purchases who then sit on empty apts and don't pay fees. I do agree it is in the developer's interest to keep the standards up. To repeat a previous request, any help with the name of a company to manage the snagging list, and what have been the main problems that are avoidable? Thanks again, we look forward to sitting by the pool after a hard morning on the golf course. Beats work??

Hi Redcastle

Re snagging - the developers have their own snagging list to be completed.  Our agents dealt with this for us - and you will find that they require the snagging to be done AFTER completion!!  When we tried to gain access prior to completion all we got from their office was "well, you will complete soon, so what's the problem".  Best thing to do with the list is (whoever carries this out for you) to obviously mark every little thing you see and list details where specific problems are noted.

I suppose you can obviously hire the services of a professional to do this list (and their own) after you've completed, but, I believe, the developers will only accept their own list to be submitted - so make sure every point is added to that list.

In all honesty, we personally didn't have any real major problems at all.  If you read through the DV forum, you will be able to get more info on any real problems people had with finish, etc., in their apartments.

All the best for completion.

Hi

I completed just over 1 year ago and was in the same position as yourself, ie couldn'y gain access before completion and needed to ensure the snagging was done on time and also needed to ensure somebody was there to open the property when the builders came to do the work. If I am correct they only do it on certain days of the week. If you haven't already been advised please send me a PM and i will put you in touch with the company that did it.

I found out , too, that the comprehensive snagging list that you go through does NOT cover all the electrical appliances and to do a complete check you need to have the electric and water connected to test everything. you can only connect these after you have completed.

I found very little on the snagging to worry about, it was all fixed quickly, the major issue that was found by my keyholder was that the aircon system is also the heating system in winter, and it didn't work. This was quickly resolved though.

Good luck, and see you around the pool one day!!

 

 

Hi

Don't worry too much if you have problems connected with the water and electricity after completion.  We had hot water supplied to the toilet in the en suite and then found that we had hot water to the tap on the balcony.  Maria at RyF deals with any after sales problems and these were quickly sorted out.  The builders do seem to prefer attending to these problems on a certain day, I think it's Wednesdays.  Hope everything goes OK.

Thanks for your support and information. 

** EDITED ** Commercial post

This message was last edited by EOS Team on 11/4/2007.

Dalla,

Good price - I thought I 'd buy a couple more myself at that prices.

However
I've just tried searching on that site you mention and it comes up with

Sorry No Results Found

and Spain isn't even listed on the country guides !

PM

 

Hi Dalla, as Paul said, very good price if it is a 2 bed 2 bath - I also looked at the site you mentioned and got the same result as Paul, however I did manage to view Spain - still no results found though.

Mimmie

Have also checked out the site and as others have said no 2 bed apartments in Spain are listed.

Looks like a spam posting - over to you Justin