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I guess most people have read the recent media reports about the imminent crash in the Spanish property market does anybody have any views on this my thoughts as I am going to complete on mine this month is if you ar ein it short term you might lose out but long should be okay.
Any views on this?
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Hi rclarke,
Welcome to the forum. I notice this is your first post and you asked if anyone had any views on the subject. I'm quite new to the buying in spain game, so I think if I was in your position when reading things like market crashing etc. it would start the worries setting in. We completed in January and are very pleased and happy with our new place. As you are so near to completion it's obvious that yours is already built so no off plan worries there. You are spot on with what you're saying about the short term being a bit iffy. But if you are looking at long term then I would say yes go for it. You are so close now. If it is in a place you are happy with then trust your instincts. We are so happy with ours and just wish we could get enough leave to spend more time there. Whereabouts have you bought? The market in the UK was said to be crashing 2 years ago, it hasn't, it has just stabilised and become more realistic. I am in the business myself so can vouch for that. I know many peole on the forum have the same views on this so enjoy your new home as we are doing.
Gina
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With regards to the crash.... the good properties are not crashing..... there are still legitimate buyers around with the purpose of having a home in the sun within the Spanish society as they welcome them quite well I think. Perhaps there is over supply of 2nd rate properties.... they will be eventually sold once the Bulgarian Dream goes.... and yes, only the fittest agents will survive, and that means a serious re-thinking of their busines model. NO more "glorified drivers posing as agents".... and "processing people"...
In the event of a crash...... you stil have bricks and mortar left...... the last "buble" exploding was the stock market as I recall.... the .com´s... Real State in Spain is still not only a good option but also a good long term investment, provided that you are properly advised.....as I said, bricks and mortar instead of ENRON shares, or Parmalat.... or being "ironic" to myself ( due to my background) Argentine treasury bonds.....
Cheers,
Juan.
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SORRY, REPEATED !!!! This message was last edited by Juan Pánzon on 5/3/2007.
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"I knew a lad that went to sea and left the shore behind him, I kne...
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Crash - what Crash?!?
Ive been forcasting a slowdown for the last 4 years and the signs were there around 5 years ago, oversupply and overinflated prices, rental incomes dropping etc.
Its a natural culling which can and does happen anywhere and Spain is and always be the best place to buy - probably in the world.
There is no-where to compare the facilities, the infrastruture and the way of life. Oh and the sun is ok too.
So at the right price it would be daft to miss out
If you are a speculator then yes you will have your fingers burned, in some cases very badly, but a true investor will look at the longer picture, mid to long term property is always a good bet. It always has been and will never change.
And here endeth the sermon!
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Quite frankly m'dear, I don't give a damn!
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Bored with this topic now. I agree (for once!!! ) with Janice - go read all the other threads where this has been done to death.
Sr.Panzon, where have you been? Good to have you back, haven't seen you posting for a while. Always good to read your informative comments.
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Having effectively stopped this thread in it's tracks with my last post on it, I feel I have to start it up again due to a ridiculous article published in today's Mail on Sunday titled Costa Catastrophe. It really got me going! I wonder if anyone else saw it?
Basically, it's yet another bit of sensational scare-mongering by a British press desperate for some disaster stories to sell papers. It tells of a respectable hard working couple in their early 50s who chose to pay £2500 to attend a seminar in the UK on investing in overseas property. Hoping to find a way to pay off their mortgage before retiring, they were persuaded that the Spanish property market was expected to increase in value by 30% a year. They decided to re-mortgage their UK home (to the tune of an extra £100k) to raise the deposit on an off-plan house on the Costa del Sol, and then were encouraged to invest in another one as well. Despite assurances that they would be able to sell before completion and make a profit, this did not happen, and now they are saddled with the property and mortgage commitments they can't meet, and are being forced to sell their UK home to re-pay their debts.
Whilst I feel sorry for them for the position they now find themselves in, I found the article irritating because of the clear implication that a) they are in no way responsible for their own careless decisions and that the company that ran the seminar should be held accountable for their predicament, and b) the suggestion that contrary to the advice they were given about the Spanish property market, it has in fact crashed disastrously, leaving decent, honest intelligent people like them financially ruined.
If you read between the lines (which I have attempted to illustrate by highlighting certain terms in my first paragraph) it is apparent that at no time were they given any guarantees, nor were they brain washed or hypnotized into making reckless decisions. They simply fell for the idea that by getting themselves heavily in to debt to finance investments that they could not afford, they would solve all their financial problems. I am personally a very cautious (some would say over-cautious) investor, but their strategy certainly seemed flawed to me. But you make your bed, you lie in it. At the end of the day, anyone who charges you £2500 for a two day seminar to tell you stuff you can easily find out by logging on to the Eye On Spain forum for free, is clearly not in business to make friends. The article stated that this company holds about 50 such seminars a year, attended by approx. 600 people each. I make that about 75 million quid a year!!! Nice work if you can get it. The same goes for lawyers and estate agents. I'm not saying that none of them can be trusted, but some people really do leave their brain on the plane. You simply cannot afford to place your trust 100% in someone who is basically only there to make money out of you. You MUST take some responsibility for your own actions. When things go wrong, it's not always someone else's fault.
As for the state of the Spanish property market, suffice to say that these unfortunate people were persuaded to buy two properties in the well known property hot spot of Rincon de la Victoria. I'll probably get all sorts of complaints from the Rincon faithful, but a little research would surely have told them that this was not the most obvious place to buy property with a view to re-selling. How many people have even heard of Rincon?
Costa Catastrophe? More like a Momentary Lapse of Reason.
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"Get your facts first, then you can distort them as you please"
Mark Twain
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Hi Roberto Well its bad enough buying into a scary market but to pay to be ripped off they must be really green as you say they had there heads in the clouds and blindfolds on too, they must have seen that program on TV last year when Amanda Lamb said the prices in Spain were going up 30 % in the next few years, as you know Rincon is just outside Malaga ( east ) and prices are high as its close to town, and lots of new builds going on but mostly Spanish buyers, people are still sucked into this big profit next year thing. as you say there is so much info out there if you spend a little time looking and work out the sums . they have themselves to blame for the situation there in . Rincon is not far from our area but not my choice to live. Rgds Rosi n 
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Go easy guys, as this is the first time I felt the urge to add my thoughts.
The article yesterday was typical as you describe. It is incredible how many people get carried along with the thought of a quick win. Of course there will be incredible success stories but they will be more than cancelled out by not so happy stories. My friend has just bought a 2nd apartment on Polaris World after purchasing his first off-plan last year (completing this month, finally!). The 2nd to be finished the end of next year.
He will be depending on some rental income and thats the part that concerns me. having purchased our modest house on SDR last year (following years of planning) we are delighted and are expecting a few surprises still to come. Our friends have a great Spanish mortgage deal (2% fixed for 2 years). My concerns may prove unjustifyed but these are my thoughts,
They have released equity from their English home to cover both deposits. Not unusual, The fixed deal in Spain is only 2 years (what happens then!) and with interest rates in the UK increasing ( 2 more rises expected this year). They will need a certain amount of rental when 2nd apartment complete to cover all their costs. My research tells me that could prove difficult with the competition around. He said he would sell one if needed hopfully showing a profit. Again my thoughts are that it can prove difficult to sell quickly especially with the amount of new builds around.
Am I being too concerned?
Saying that we are very close to giving up our 2 reasonably piad jobs in the UK to take a couple of years in Spain to see if we can carve out a living (way outside my comfort zone!).
I would welcome any feedback or thoughts.
Thank you,
Paul
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Hello
I see property like any other form of investment (if you read the small print, they always warn that markets can go down as well as up and nothing is guaranteed!) or gamble (don't spend more than you can afford to lose!) I read the article, and the company that this British couple were trying to blame make it clear that property has to be a medium to long term investment. I think the problem is that there have been so many stories about short-term gains that people are hoping for a quick buck. Luckily we don't have that sort of money to lose, and we are buying an off-plan home with the idea of relocating in two years' time. We decided not to buy the most expensive property we could afford either, just because you never know how markets are going to change and if our house in the UK increases in value more than expected, it will supplement our pensions and give us more spending money for holidays etc! I would rather have that than be worrying about making ends meet.
Sue
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Sue Walker
Author of "Retiring the Ole Way", now available on Amazon
See my blog about our life in Spain: www.spainuncovered.com
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Hi colettepaul. I can understand your concern regarding rental / selling , the problem is the rental market all along the the coast is really hard going even before all the new builds come on stream in a few years, Its not anything I would like to rely on for mortgage payments as you say interest rates are still on the way up both in the UK and Spain so rental return is no good , if I had a spare £ 100 k it would go in the UK bank and get 6% + gross and its in your hand and you still have the £ 100k safe. We have some friends on the Costa Calida they have tried to sell their town house now for 2years but no luck as loads of new builds going up around. If you are going to Spain to live or have loads of spare cash and dont need to rent its no problem but if your funds are tight its really dodgy as most rental returns will be on the low side but rental agents will tell you many stories about how good renting is just to get your fee. This is only my view it might not be what you would like to hear its just my feelings about buy to let. Best of luck Regds Rosi n
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Yes that was very well said Roberto, we get a lot of invitations to different seminars and I am sorry but they go straight in the recycling bin. I do not need anyone to tell me what to do with my hard earned money. But I do think some people are on a different planet to me when I read things like that no one held a gun to their head and made them sign, they were obviously carried away with it all . As far as renting your place out to pay for the morgage that is something I would not have even considered it's just as well with the market like it is. But it's not all doom and gloom their is still plenty of people buying. The Daily Mail is talking about the property crash in Florida today so it's their turn now they are leaving Spain alone. Well as they say you live and learn. Regards Pat
This message was last edited by Pat and Roy on 5/28/2007.
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Once again Gillespie and Roberto you are right on the Button, keep up the good work, Let the doom and gloom brigade "Wollow "(That's a good word) in their own mud, and the "Mugs" who have fallen for the less than honest agents spiel and trickery, consider " Mea Culpa, Mea Maxima Culpa"
John
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Absolutely agree!! Might not necessarily call anybody who has lost or suffered through fraud, especially, "mugs" but, yes, others who invested for short term profit take responsibility for your error in judgment - especially with such a major investment, as investment in property is anywhere in the world!
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Cant really add anything to Robs words of wisdom - should be a government health warning emblazoned across these companies warning that property markets like everything else are cyclical and what can go up can also go down - trick is to be buying and picking up the deals from the poor unfortunates who are unable to complete - that may seem very harsh but there a lot of proper investors as opposed to speculators out there who are making a very respectable living doing this - and ensuring that when the market recovers as it assuredly will they will show handsome capital growth as well. Didnt know they charged a fee for the seminar as well as get an agents commissionn for selling the property - sorry havent had a chance to read the article yet - seems incredible anyone would pay it.
For the person who mentioned the 2% mortgage deal that is something that is being subsidised by the developer or promoter and is in fact built into the price paid for the property - you should enquire now as to what the deal reverts to at the end of the subsidy - remortgage here is not like the UK and typically costs 5 to 6% of the size of the mortgage in terms of costs - there is one product currently being trialled that covers a lot of these but there is no guarantee that this will be common and no guarantee yet this will be a fixture.
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What was more worrying for me regarding this article wasn't the cheap easy piece of journalism it was but the fact that this guy was a policeman!!!! jeez ho ...
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Regards
John
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I'm more worried about a crash in the UK. We are in the process of buying an off plan Polaris World appartment. We re mortgaged to beging the process and to cover the first two major payments. As soon as we took out the remortgage the interest rates began to increase.
We planned to sell our UK home next year to complete the purchase, if we can ever find out when the completion is to be expected. I was aiming at £250,000 for a 4 bedroomed house in Dorset. The plan was to give us about £100K to invest in something to give us an income. We planed to use the appartment as a base with the intent to let it out in a couple of years. The £100K was for property investment and development, although I have no experience in this minefield.
Would people generally advise against this plan as a means of making a living. The other option was to open a photographic studio.
One final question. Does anyone know anything about bringing Guinae Pigs over?
Thanks....Mel
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