Is Spain the Place to Go?

Hi, i am looking at buying an overseas property. What is the spainsh housing market like currently? is it worth investing in the spanish housing market or is there somewhere else i can make more money?

 You might like to dip into some of the threads - you will see that there are two responses to this and at the end of the day, my view would be that you only buy an overseas home in a country in which:  you are interested in the lifestyle or culture, speak or be prepared to learn the language, you actually LIKE and would be prepared to commit to many years of property ownership.  You will find through these threads that there are people who are delighted with their purchases (I am one of them), and people who have been caught up in various legal irregularities.  Buying overseas is not really for the faint hearted, but if you like Spain, then there are some very good bargains around as the result of the economic situation in Spain.  I would go for something on an established development, with residents as well as holiday homes, or go for a village property.  If you are buying for personal use, I would rent and look around - again, loads of tips on these forums.  Have a dip into the various discussions - you will find a lot of useful stuff. 

Spain was never a good country for investment as it has both high acquisition and disposal cost and it is not easy to sell in Spain should your circumstances change and you wish to withdraw from the market.

Furthermore the annual cost of maintaining a property in Spain can also be quite high.

Rental yeilds have also fallen.

You should also consider inheritance tax because if you own property in Spain your beneficiaries will have to pay Spanish inheritance tax and any claim for credit in the UK will be very limited if at all.

But by all means buy for enjoyment.

I endorse Faro's wise words below.

The buy/sells costs (approx 16%) equate to about 4 years rental costs or you require 16% cap appreciation just to break even. I see the general market falling a further 15% - 25% (depending on quality/region etc) over the coming 24 months & then remaining flat for some time. We will rent initially & only seek to do a deal for cash when we start seeing  evidence of price increases.

Cheers,

Jon

 We have just come back from Spain. A number of properties that have been up for sale for a long time seem to be selling. We bought ours just over 3 years ago and believe that the value has increased both in Euro and Sterling terms. I do not think the market will fall another 25% on resale properties. New ones seem to asking high prices and they may have to fall to sell. If you see something you like make a low offer, you might just be lucky. Kevin

Well done !

Its interesting that you bought 3 years ago & the price has increased in Euro terms i.e. against the backgroung of general market falling anyway between 25% - 50%. How did you manage this ?

Cheers,

Jon

 The property we saw was up for 149,000 Euros and we offered a cheeky 95,000 Euros, we were cash buyer. After a week they agreed. We got an exchange rate of 1.24 euros to the pound. Total purchase price with costs came to 103,500 Euros at 1.24 = £83467

A similar one to ours, not as nice has just sold for 112,000 euros. If we were to convert that back @ 1.13 to £ that would = £99115. Of course there are selling costs to be paid. Not a fortune in profit terms. However, we have loved having our own place in Spain and spend a lot of time there. 

That is excellent, Kev, and it shows that one can do well on a property transaction.   IMO the secret is not to rush into anything and just take some time to look around.  There will always be properties like the one Kevin purchased, where the owner is very keen to sell and will accept a lower price.

Patricia

 Yes Patricia, you are right. No rush, take time, keep in touch with Estate Agent and tell them about the others you've seen with another agent. We felt it worked wonders. We've not made a fortune but at least we are not regretting it. Kevin