How many in the same boat?????

Dear All,

My comments on mine and Goodstitch's actual financial losses were not well received earlier.

They were even described as sick.

The post below is recent and sums up the position..............

Given the usual denial of real values, the likely losses are far worse in fact.

The losses at Casares Del Sol certainly are.

I wonder how many are in the same position?

Regards

Norman

Sorry Justin if you can clean up my clumsy cut and paste I will be obliged

Thanks Norman

 I would say our property has dropped by around 50% (if you include the 7% purchase tax). Others in our area will have lost more as the new developments that were completed and sold were even more expensive. We were in it for the long haul, but maybe an even longer haul than first envisaged.

Mark

Here in the campo of Albatera I would say  the price we would reasonably expect to get for our property is about 20% lower than we paid for it 4 years ago, ironicaly, it would be the same as the purchase price minus the black money.

That said, in pound sterling terms, allowing for the reduction in the exchange rate, we would be in profit if we sold and took the proceeds back to the UK.

After spending some time in the UK before xmas and looking at general high street prices (not offers), taxes, council tax, fuel etc, it is obvious we are much better off staying put here in Spain and soaking up the sun. I would have to work full time in the UK just to pay our way, that is not an option.

The main problem is if you have say a 200k house and it drops 50% in value its then worth 100k it then has to make 100% return to get back to the original value

Fortunately most people i speak too brought their home overseas not as an investment but to enjoy for themselves and their families.so to them thecurrent values are irrelevant.

Rod

www.ournextholiday.co.uk

 At the end of 2003 start of 2004 our property cost around 160,000 euros.  It went up to about 215,000 euros.  Today it's worth around 100,000 euros.

But surely if the reason for buying was to enjoy and spend time in Spain then value or unrealised gains or losses do not really matter.

An individual who paid a deposits of EUR100+k and got nothing has absolutely nothing to show for it. Life savings gone and still stuck in UK.

Whereas an individual who bought a unit might well be sitting on a loss but at least he can enjoy the property and spend time in Spain and hope that one day the market will recover.

[of course there are those in limbo who got half what they paid for on some half finished urbanisation]

In my opinion it was very much the property investor that fueled the property boom. Spain with its high acquisition and disposal cost, even in the good days, would have been hard to make a profit. A few managed but as Sir James Goldsmith once said if you can see a bandwagon you are too late to get on it and this is what happened with the second (or third) wave of investors who bought multiple units in the hope/promise of being able to sell on pre-completion ..... and make that big profit. These so called investors were putty in the hand of Spanish estate agents believing the sun would never set and there simply would not be enough property built to meet demand as plane loads of buyers landed ........

Even in the good days there was plenty of re-sale properties so no real need to buy off-plan but the agents would only sell off-plan because that was where the big commissions were.

Dear Faro,

unfortunately you are missing the point somewhat, perhaps you are judging this from an advantaged position.

using life savings as a deposit relies on the prospects unless you have a large disposable income to keep the place empty but serviced for all and every year.

if you are not in that happy position then you are relying on whatever reserves you have in place plus whatever prospects have been factored in.

as the original poster says funding all costs with zero prospects is disastrous in the extreme, hence the reason for the post.

Regards

Norman

 faro buy in an established area with spanish neighbours then all wil be fine

normansands

maybe I am missing the point?

but why were these people buying in Spain in the first place - for investment or enjoyment?

those who could not afford should not have been investing.

and if for enjoyment then does current value really matter? Spain is still Spain and the sun is still shining!

You arguement is flawed?

You could say anyone in Spain holding GBP suffered a big loss when the could have converted to EUR at 1.45

Anyone with a pension/investment portfolio should have got into cash before world markets collapsed.

Anyone with a property should have sold up before the crash and put the money in the bank and rented.

Many people are less wealthy on paper now than they were 4 years ago.

But that can only be changed with the benefit of hindsight.

amep75 - that is exactly what I did and I did not buy off-plan or from any agent!

 hi faro and its great isnt it

It's a house and the more time one spends in Spain the less one seems to enjoy the tourist side really.

There are good and bad things about life in Spain.

Getting simple things done can be hard and frustrating.

I do not like funcionarios or the little people as I call them.

It's certainly not a country I would choose to make my permanent home.

 if youspeak spanish it is so much easier

Dear Faro,

I am afraid your whole post declares advantage both in knowledge and finance.

there was no either or for the poster it was a mix of both as indeed it was for me, though on an inheritance long term basis.

I suppose you could say that investing with a mortgage is a form of leverage which introduces some considerable risk and that risk for the poster has been realised.

A risk that few thought would be so very high where property is considered.

I and others have been spared that realisation since we have not completed and lost more than our deposits.

It really is that simple, I am better off financially if I only have to bear one loss, rather than an ever growing loss.

The boom may have been artificial but so is the slump, the pendulum has swung a long way in the other direction, perhaps too far.

The best prospect for the poster would be to let his UK property and occupy his Spanish property, if his employment is transferable, but that of course brings other considerations/risks.

Regards

Norman

I speak enough!

But the problem is you cannot do things by telephone. You need to go to some office at specified times, take a ticket and wait for hours .....

I can sit in Spain and do business freely in any other jurisdiction. Not so in Spain. eg if I have a tax problem in UK I pick up the phone. In Spain you have to go in person armed with documentation and then they will still not deal with the case and say they are backlogged and to come back in a month - all this leads to increased cost. They refuse to deal with refund queries by phone!

The Spanish tax authorities steal from foreign buyers/sellers trying to impose artificial values refusing to accept the market is where it is - all this leaves a very bad taste in the mouth.

I have been coming to Spain for over 20 years - my children are Spanish - attend Spanish university/schools .....

It is very hard for non Spanish to work in this country other than in the ex-pat community. Our ways of conducting business are very different. It is not only language!

 i think possiblty the problem is the locals are a bit fed up with the brits who wont join in i do everything by phone or email except the very odd thing of not being able to order on the web or by phone you always have to go the the shop maybe they dont need my money??

oh and did you know uk hmrc only answer half the phone calls i think it is universal pen pushers diesease

Dear Faro,

you have the knowledge and it is both valuable and appreciated by all I am sure, so much so that I think you should have a blog or contribution in Spain Uncut.

Please keep telling us like it is.

Thanks

Norman

Norman

Sorry - I still do not understand the point you are trying to make.

Are you saying someone like goodstich is actually better off not having bought and instead of enjoying a property in Spain has spent 8 years at war and that really he should be grateful his loss was only what it is?

Many people were buying because they wanted a little place in the sun where they could escape to and if they did not get that then they have a valid complaint.

The nature of any investment is that is can go up or down but whilst holding that investment the loss is unrealised and the asset can still be enjoyed.

Have I totally mis-understood your point?

Dear Faro,

yes indeed, excepting that Goodstitch may not have been in the exact financial position of the poster who posted on the newsletter article, copied by me.

the poster clearly has a large mortgage on a seriously devalued property, i.e. he is in serious negative equity.

he is having difficulty meeting mortgage and community commitments.

he would therefore be better off financially if he could hand back the keys and walk away.

Goodstitch has been at war as you put it and I am extremely reluctant to join that war without some prospect of success and affordability. From your other posts it seems that you concur with my view.

I am therefore finacially better off by accepting the deposit loss and also walking away, unless you have a better solution.

There is no prospect of anyone enjoying a place anywhere if they cannot maintain it, they are in fact in misery, the sun is irrelevant, don't you agree?

Regards

Norman

I look at many situations and there are some who could not afford to complete or whose cases are weak and for them drawing a line under the whole affair and moving on may be the best alternative rather than funding one legal battle after the next and them paying lawyers annual fees to monitor developers in receivorship with little hope of ever seeing a cent back.

I sometimes say this to people but others will say they have a very good case and great prospects of a payout from the administrator or receiver - of course only time will tell.

I would be hesitant on cases that depend to some extent on external forces or change in law/practice.

For many whose circumstances also changed in the UK need to plug the hole of the Spanish mortgage and community fee and in that example walking away is the only alternative even if ultimately chased in the UK.

It's all about drawing a line and moving on.