Property sales on the increase in Spain

This article was sent to me by Taylor Woodrow   !!!!! must be good news !!!!!!

Sales may well have increased but I believe that's because vendors have needed to accept that they have had to let their properties go for a LOT less than they bought them for ... certainly we would get a LOT less after owning our property for 5 yrs! It doesn't mean sales are on the increase because prices are creeping back up slightly so we lose less than we did a few months ago, had we sold then.

 Hi,

sales have increased???????????

After 18months trying to sell my property and seeing hundreds like me I realise that the only people selling are those that can afford to take a huge hit.  That also refers to the hit taken by using the local scammers, much like the marbella scandal 5 years ago.  The Spanish property market is so complicated I often wonder was I totally insane or very drunk when I actually purchased my apartment in Alicante.  Well I suppose I did think at the time that it would be my permanent residence but alas a woman changed my mind and I returned home.  

So if sales have increased by 9% I suggest that this means that prices have dropped significantly because every man and his dog now know that the market worldwide was so overinflated that a total cleansing process of brining prices back to real terms was needed.  I believe that they will only sell once the prices revert to pre 2004 prices.

I wont hold my breath for a sale but I will use cheaper avenues to sell it than what I have used up to date.

i can only speak personally and for a few other agents i know but sales are definitely up on last year.

I have sold as many properties this year already as i did in the whole of last year!!!

The reason, pure and simple,the prices.

You can now buy a 2 bed bed apartment surrounded by amenities and nestled in a traditional spanish village,15 mins from the beach for 45,000 Euros!!!!!!!!!!!

As a client said to me yesterday, thats less than their company car cost!!!!!!

Not off plan,fully licenced and legal,5 years old so all snagging resolved etc etc.......there are so many of these around.

Thats why sales are up, people who were out of the equation in the boom can now have a holiday/retirement home for very little investment.

I expect the British to come back into the market more if the pound gains momentum, at the moment the pedominant buyers are scandanavian,Spanish and a few British that are now snapping up the bargains.

With the legalities now 100% sorted (in my area at least) i think if the world wasn't in such a state there would be some serious interest in property again.

Sales has increased during las few months because VAT is gonna rise from a 7% to 8% in July

 But the increase is only on New build property, not on Resale.

Considering i have not sold a new build for six months i am afraid that does not explain the increase in sales.

Just to add only about 10% of our recent buyers had heard about the IVA hike.

Our landlord has our property up for sale.  We had no viewings at all in 2009, but the first few months of 2010, there were a lot of viewings.  And then it all went quiet again in April.  I guess all of this talk about Spain defaulting, the IMF, the end of the euro, salary cuts etc. have knocked confidence again in recent months.  I guess we'll have to wait a while to see if that was the case.

Georgia, are you based in the Alicante area?  45,000 euros sounds cheap.  Out of interest, how much would that let out for per month on a long term let. 

I'm based on the western Costa del Sol and I keep being told property is cheap here.  Decent 2 bed appartments (bank repos) are now going for 100K.  That seems cheap on the face of it, especially compared to the bubble prices of a few years ago.  However, rents have collapsed and these 100K properties would only rent out for 400 per month tops now.  Which only gives a rental yield of 4.8% assuming no voids (unlikely).

When I was back in the UK in April, I was checking my local market and you could buy good quality property on 7% rental yields.  So why is Spain so expensive still compared to the UK.  Spain has 1.6 million unsold properties, so why are yields better in the UK, which has no oversupply of property?

I still think prices could fall another 50% in Spain, especially as we have wage deflation now in Spain.

 Hi Sanchez,

We are based in Algorfa, 15 mins inland from Guardamar and approximately 45 mins south of  Alicante City (30 mins from El Altet Airport).

When i first moved up here (originally was based in Granada area) you could not buy a property in the village, there was literally nothing for sale!!

Then they started to build for both the locals and the foreign buyers.

On the outskirts of the town they built approximately 16 blocks of apartments in 2 locations.

These were all sold off plan from approximately 80,000 to 142,000€

the cheapest one we have sold recently was for 37,000€

They rent for anywhere between 250€ and 350€ per month depending on floor and orientation, some of them have beautiful views of the mountains.

They are in a gated community with communal pool and gardens.

I think most landlords look for at least 7% yield, especially in the UK.

The people that are buying these are not neccesarily investors, they are people that want a little bothole or retirment home that is very inexpensive.

Don't forget these are not properties that are stuck out in the middle of nowhere, like some new urbs, these are within a Spanish village with town square,church, 21 bars and restarants, sports facilities, banks,bakers,butchers and on and on....so you don't have to compromise on location or wait for the facilities to be built.

The reason people are coming back now is that they can sell their property in the UK, buy a retirement place,stick the rest in the bank and suffer no harsh winters again.

Anyway,enough of the sales speel........

We have noticed a drop off in the last 2 weeks also, although we did sell a 3 bed 2 bath villa yesterday for 90,000€!!! (sorry,last bit of speel!!)

i think this has a lot to do with the forthcoming World cup as people do not want to come looking at properties as they are all looking forward to the looming dissapointment of our National side under performing once again.

The Euro/Sterling looks stuck at 1.21 at the mo but i can see it galloping on very soon, maybe this is another reason for the stall, maybe people think that they will wait and see what happens.

It would be interesting iof there are any potential buyers out there that could let us in on the secret.

Hi Georgia.

Thanks for your reply.  Interesting stuff.

the cheapest one we have sold recently was for 37,000€

They rent for anywhere between 250€ and 350€ per month depending on floor and orientation, some of them have beautiful views of the mountains.

Taking the lower figure of 250/month, based on the 37K purchase price, that's a yield of over 8%!  A bit of a bargain by the looks of it.  I don't know why the Costa del Sol is still so overvalued.  There's a huge oversupply of properties here.  It doesn't add up.

The people that are buying these are not neccesarily investors, they are people that want a little bothole or retirment home that is very inexpensive.

I like to use rental yield as a way of comparing whether property is cheap/expensive relative to the rate you would get in the bank and the dividend yield available on the stock market.  It looks like the Alicante area is very cheap now, and the Costa del Sol very expensive.

 In all honesty i think both the CDS and the CB were well overpriced in the past.

The supply and Demand simply inflated the bubble untill the well publicised pop!

I think reality has hit far quicker here and propbably the price drops have kicked in a lot quicker, that's why i feel we have hit bottom a lot quicker.

You can now get a 3 bed 2 bath detached villa with pool for just over the 100k mark, this will give a monthly rental of around the 600€ mark, so the figures are starting to come back in line.

I have recently moved myself and picked up a property for the same price as it was purchased 10 years ago.

This is the only reason the market is stuttering into life.(around here)

If we get an increase in the pound/Euro, the world settles down financially i could see a half decent return to the market.

It will take a little convincing as i think a lot of people think that every house in Spain is illegal and comes with the a bulldozer looming....

I would prefer a blanced view and a settled moderate housing market.

10 years ago the TV told us we couldn't go wrong and now the it tells us that it is inevitable that we will be landed with problems.....the truth is somewhere in the middle.

Hi Georgia,

Have you read the Evening Standard today . The money page saying Brits are looking to buy in Spain because of the euro!!!! 

Survey by Rightmove

Pat 

Our viewings are increasing slightly, but customers know that they can get a bargain now! Their 'wish lists' are very exact. We are finding that village houses under 40k seem to be selling well. Also rentals are picking up especially ones under 250 euros a month.

Caz

Is the backlog of 1.6 million unsold new homes being cleared first and who is buying them?

Thought it was interesting that Fred, an agent was sent the article from Taylor Woodrow a developer with problems worldwide and then posted the header, the two don't sit comfortably.

Anyone know the figures for those Brits who can't sell their properties on the Costas? 

There will be better bargains to come later in the year or next methinks! 

A lot of the unsold new properties here on the Costa Blanca are being repossessed by the banks and they can be very difficult to deal with.  It has taken a whole week for Bancaja to get me a set of keys for a property on their books and 6 weeks to give me an answer to an offer!

Some builders who have managed to hang onto their stock are discounting and hence selling, but others are still way overpriced so they won't sell. 

The biggest problem here for owners trying to sell is that the prices are too low - they cannot clear their mortgages if they reduce their asking price to current market values, and any unpaid debt would pass to the buyer, so they are stuck.  Their only choice is to hang on and try to pay the mortgage or hand the keys back.

Many properties here are about 50% of the peak price, when many Brits bought, so I don't see them reducing much more.  There are still properties on the market way over price so this makes generalisations impossible - eg I have a 3 bed quad for 116,000€ and the one next door is with another agent for 195,000€.  Which price is quoted when people say the market still has further to fall?