Property Prices!

 I konw that my villa will NOT sell as the agent has sold me a VERY overpriced & poor qualtiy build with no insulation whatsover. It's virtually impossible to keep the heat in to keep me warm without burning off my money in high electricity bills. The govt is trying to conserve enery by introducing solar & it's totally disgusted that the govt allows the builder to build such poor contruction houses.

All I can say is that the villa is VERY OVERPRICED & I'm totally disgusted that the agent sold me such a villa. I will NEVER trust an agent again to buy a house.

 First, I must state that I agree that Spain is NOT for investment purposes - I have never bought a house 'overseas' yet which I considered to be an 'investment'.  Sure, the one in the USA turned out to be a fantastic investment, but we wanted it for a family holiday home.  If you love Spain and want either a holiday home or a place to live, I think NOW (or the next couple of years) IS the time to buy.  And it is certainly not rubbish that is on the market around us (though yes, some of the 50 sq mt apartments which were always poor, will remain so).    If you look at towns, very close to the coast, but which are predominantly Spanish, you can get some fantastic bargains.  These are houses which have sadly been lost by young Spanish families - and they represent fantastic value for money.   A lot of the older golf properties are on the market at around 50% of their original prices, and they are not all rubbish either.  

We are also looking at  property in Madrid itself - and I can tell you that even there there are bargains to be had - again, they may generally be smaller in Madrid, but they are not rubbish.  There is so much to look at, I would just say again, don't rush.  Prices are not going anywhere, and there may be more bank repos to come.    And rod - if I were you I would not be falling into the trap of believing that just because one property sold for x amount - they are all worth that.  I know I am a bore and keep saying it, but property is only worth what someone is willing to pay for it at any given moment.  People will always fall for property and pay over the odds - that is just luck!!!!     

Forhotspot - I would be looking at ways of insulating and making my villa more comfortable rather than writing it off. 

Agree with what Bri has to say.

Unless the right property comes along at what you think is the right price - then it's the right one for you.

Invest in property in Spain - not if you want a return. There are better investments and property markets if that's your bag.

No rush property on the Costas is going nowhere North at the moment. Wait for the Euro fallout to get going later this year and see if the UK keep devaluing Sterling (if you are buying from the UK or going to rely on income from the UK to live).

Banks are not Estate Agents and they can only carry overpriced assets for awhile. They will be forced to discount further or repackage into 'investment vehicals' which they will sell. Either way it will have an effect on the market.

So as others say waiting is a good strategy and if you must move anytime soon rent for a while - advice that's been given many times by EoS members.

David

 Bri,

I have just dusted off my crystal ball so here goes...bearing in mind my crystal ball may have an alterior motive (thought i would say before anyone else did!).

This is my opinion on my area of expertise and not nationally or based on large cities.

I would say that 50% of the property i have on my books is at rock bottom,i say this based on the fact that they have dropped well below what you can actually build one for.

The other 50% need to come down to the same level once the deluded owners realise what they will actually achieve and what "they want" or "they need" has no bearing on the actual price the propery will sell for!

In saying that,now we have nice apartments at 40k+, i think the prices will sit for a year or so as although the mortgage rate is very low at the moment,no bank has the cojones or ability to actually lend anybody anything.

The key for the Brits to buy [previously was equity release for their Home or easy finance here and also the fact that an average UK home was twice the price of the average Spanish equivalent,i think we are nearly back to that point(the house price comparison).

Is it the right time to but??? unfortunately,this is only ever clear after the fact and it would be wonderful to have 20/20 hindsight.

If you can get what you want,for the money you feel comfortable with,it's not a get rich quick decision (which caused a lot of the problems).if it gives you many years of pleasure and you have the opinion that life is too short......then property is far more affordable here than it has been for the last 10 years.

People will buy a Mercedes for 40k knowing that is not an investment,purely for pleasure,i cannot guarantee a timescale,but buying a holiday home or permanent residence for the same money,will make you money in the end,guaranteed,and you can think about that whilst sipping a coktail with your feet in the pool...

 Cheers Georgia - very well put.   

Hi Georgia - you talk a lot of sense!

I wonder if you could PM me your company details/listings.

I have a budget of up to £100k for a full time property and up to £60k for a holiday home.

No mortgage would be required for the above amounts.

As a newbie I hope in asking this that I have not broken any forum rules!

Cheers

Steve

Hi - I find some of the statements made on this thread really difficult to reconcile with my experience.  So here is my tuppence worth:

• I don't know any agent who puts prices up for the summer months - that would be sheer suicide in the current market
• I am a British agent working for a Dutch owned agency and we share properties with agents of all nationalities - I don't see any difference in prices based on the nationality of the agent - well maybe one exception is the Russians!
• prices are all over the place and I agree with Georgia that some sellers either will not, or cannot, drop to the level where they will sell.  It can be hard for agents to refuse to take on these properties, but that would be the sensible route and make the market a bit easier to understand
• in this area (Torrevieja and Orihuela Costa) properties start about 30k€ and I find most buyers now are not looking for an investment, but are wanting a long term home - either holiday or permanent - and understand that they won't be able to sell at a profit anytime in the near future
• some of the banks are already discounting heavily and are able to undercut most private sellers - but not all repos are good value so you need to compare the market (as they say!)
• the one area which is completely bucking the trend here is the new-build sector.  We have a small but growing number of new developments which are selling out off-plan.  Totally unexpected!

So I think it is really hard to generalise about the market because there are actually many markets at play here.  My advice for this area is to have a good look around and take your time if you are wanting to buy.  If you want to sell then be prepared to drop your asking price to about half of the 2006 / 7 level to have a good chance of selling quickly.

Hi Bri,

   Thanks for your advice about insualtion.

I came here looking for the hotspot to retire comfortably. I did a lot of research before I move over. Unfortunately I didn't find out that this part of Spain has a very cold winter that I can't survive on it without a properly built house with insulation which I'm so used to.      

I trusted a highly recommended agent to find me a reasonably priced & good quality built/constructed villa & I would expect he should have told me that I need an insulated villa & NOT have sold me a VERY OVERPRICED & BADLY constructed villa, trying to squeeze out as much as he could for his commission, not forgetting that NONE of his promises have been fulfilled. He knew that this would be my retirement home.

I would like to have a cavity wall insulation & also on the roof & floor but I dare not spend anymore money on this OVERPRICED villa as I can't get my money back to sell it. This is certainly not going to be my dream home as I've been "frozen to death" for 2 winters. 

For the money I spent on this villa, buyers can get a bigger house build & plot with a pool too. So you see why I can't spend anymore money on it as loosing money to sell this house is not my intention.

 Forhotspot - I am really sorry about the position you feel you are in - but you must have bought the house because you loved it and wanted to spend your time there.  Spanish houses in the south generally are not well insulated - in fact, in the winter they are often very cold.   Whether or not you were ripped off is another question - but you aren't going to be able to sell at the moment anyway, so why not remember why you wanted to be there, and make the house as comfortable as you can for yourself.  I hope you feel more postive once the summer weather arrives. 

 This is a blog i read regulary from a middle aged UK agent that is dissalusioned with the market and the world in general.

he writes for several National papers and i am not sure that i only find it funny because i have experienced evrything he has in my 23 years but......try it yourself,its a bit long but if anyone is interested i will post his blog link..

This could be any Real estate office in the world (not just mine!!)

I enjoyed that, thanks Georgia!

Thinking aloud, so to speak....all you ever seem to hear lately is that there are too many sellers with unrealistic ambitions about how much their property is worth. I think it's fair to say that it's a two-way thing, with a resulting impasse - there are also far too many "buyers" who actually probably will never buy anything, because they're convinced that unless they get a new Ferrari for the price of a used Dacia, they're getting ripped off. Of course, there are those who simply don't have the cash and can't get a mortgage for love nor money, but just because you can't afford something, doesn't necessarily mean it's overpriced. It just means you can't afford it.

Roberto and Georgia fully agree too many TYRE KICKERS who have suddenly become property experts

LIVE THE DREAM and just stop DREAMING

Personally paid to much for our place MAYBE but can’t wait to RETURN in MARCH to the place which soothes my SANITY

HAPPINESS IS A CIGAR CALLED HAMLET

Rod

 Hi Bri,

   Yes I bought as I want to live a a warmer climate & I trusted the agent to sell me a reasonably priced, good quality villa. I'd so much trust that I even let him talked me into using his lawyer which forum members ALWAYS advise using an independent lawyer. 

I've been ripped off by the agent & his lawyer too, charging me 375 euros for the NIEs when I could have done it myself for 30 euros   if the agent has not messed me up. I'll NEVER trust an agent again, NOT EVEN when reccomended by members of the forum. 

Now I end up in having an OVERPRICED villa which I can't sell without loosing money. I'm talking about a big loss - 50K euros.

Property prices are not helped by the very high agents fees - 3% or 5k. On an apartment of say 70k that means you´ll be paying around 7% of your final price to an agent.

It seems to be a bit of a closed shop as every agent I have spoken to has given me the same fee quotation.

Am I right or wrong?

We were asked if we´d take a low offer on our apartment but the agent was very reluctant to reduce their fees.

We were then mucked about for 6 months waiting for the 'buyer' to get a mortgage which never materialised and so we´re back to square 1. Strange thing is we had to relinquish the 5k deposit we put on the house we intended to buy but it´s not working the other way around - we´re still trying to prize the deposit from our defaulting buyers.

Lessons learned: Only accept a buyer who had a guaranteed amount of money to spend. Overprice your property because everyone´s gonna try and knock 20% off anyway. If you can, wait until you have the cash in your bank account before you make an offer on another property. Don´t be fooled by 'a man of god' : the one we encountered was far more unethical than any of my friends or aquaintances.

Irene

"Overprice your property because everyone´s gonna try and knock 20% off anyway". Yes, I think you're right, and it's stupid (pretend?) buyers who are as much to blame for this ridiculous market as "unrealistic" sellers.

I have been reading this thread with interest.   Advice from Georgia would be appreciated.

We bought our 2 bed apartment in Algorfa in Dec 2004 and paid 91340 euros for it, it has been up for sale for 2 years and we have reduced it 3 times and now is up for 49,950, still no buyers.   One two bed apartment sold last year in our block for 29,950 euros !!!    So the estimate given here of 50% of the sale price based on 2006 seems not right somehow as prices were still rising then.   However I think 29,950 is absurd and am not prepared unless desperate to reduce to that level as we would have estate agent and solicitor fees to find out of that and with the exchange rate would end up with virtually nothing left.

We are now retired and living on a UK pension, no mortgage as we have been forced to sell our UK house to pay off the mortgage we took out to finance our apartment, so have no mortgage to worry about but running costs of the apartment will be unaffordable in a year or two when our savings run out.

We have considered renting but locally our key holder does not seem to be getting anywhere by just putting the word round.  

Georgia what rent do you think we should be looking at long term if possible, we are just off the town centre in Cecilia if you know it ?   Also what agents should we use, local or further afield in Torrevieja ?

Any advice you could give would be appreciated.  

 I would add that we have never regretted our purchase, we have had some lovely holidays in Algorfa and touring the surrounding area even though the market has turned against us.

Hi Brian,

That's re-assuring that you like where you are but you don't say where? Go on, what area are you in?

 I've been looking on and off for two years around Valencia, which I love and also just above Marbella because I have friends there but am now cooling off on.  I like to use public transport and especially trains where possible though so that's limiting my search criteria. I  wil say the market dicates a price, if it's not selling it's too expensive, even if it is just £5,000 for a two bed apartment.  I am looking for a villa though, when times are tough apartments the world over are always the most difficult to shift and if there is a cold hard recession and owners stop paying their fees then it's awful how quickly a well maintained development becomes an undesirable waste land!!!

Two years ago I offered €499K for a villa that I looked very closely at and made the offer very carefully.  The asking price was €599K and they point blank refused. It was "Built to a very high standard" which means it is way below UK building standards but quite a nice quality for Spain.   It recently was remarketed and I looked again and was shocked how tatty the (golf) development had become.  It was now on at €435K but by now I have changed my mind on it.  However it sold for €370K which is a good price but in the current market not one I'd sell my gold to buy.  But priced right everything will sell. I'm not in a rush as I still think prices are getting lower but if you buy anything "near" the bottom or sell "near" the top then that's not too bad.  So if I see the perfect villa I will buy it.  One thing I have always been aware of wherever you are (I used to be an estate agent in UK but have lived in US; Australia and Asia as well as Spain and France) there are different price bands for different areas where you don't want to be in. A good agent, Spanish or otherwise, will know and tell you that, "in this area we simply can't sell the properties between X and Y", so take his advice and buy in a range that is more competitive.  You may need to be on the ball because it may be that villas between €280K and €350K offer just what you want but sell quickly in that area, to me that sounds like a buying signal. I found that  visiting a couple of agents personally rather than indirectly and talking to them face to face helped a lot and I lowered the price I was asking them to look for me and have now been sent some very promising particulars. One thing is for sure though, I won't rush and one thing about this awful market is that as a buyer you know you can be more careful and therefore you are more likel;y to find a property you'll be happy in for many years to come.

People have to accept that when they bought their property they paid too much by getting caught up in the boom.  Either sell at what you can get and take a loss or hang on until the proprty recovers it's value.  Many bought at 1.60 to the pound and it is now 1.20 or so, so they are 40% roughly in pocket.  Great time to be buying and with Paramount and the new airport at Corvera, take a look around Mazarron, prices and climate are superb.  DM me for any advice.

Hi

I am surprised that no one has mentioned just walking round places looking for for sale (vende) signs and mobile phone numbers.  There are a lot of people (at least in Fuengirola) who have bill boards on their property and offers are invited.  You deal direct with the person and, as has been said, look in the Spanish Estate Agents windows to get a true value of the price of surrounding apartments and properties. 

We bought a second home (2bed 2bath 200 metres from sea front)  from English people direct in 2009 for about 134,000 euros in centro Fuengirola, a very old building admittedly, but we refurbished and are just enjoying coming out here as and when, but when we walk the front, we are amazed at all the for sale signs and think there are some reasonably priced places on offer if you take the time to pound the streets and ring the numbers.    Calahonda is nice although its like moving from Britain to Britain - much the same for La Cala but even in Fuengirola there are pockets of English - Dona Sofia apartments come to mind if you wish to live amongst the British.    Solicitors - refer to the British Embassy's website in Malaga for recommendations.  Our Abagado was brilliant and did everything exactly as we hoped and he said he would.  Cannot say that for many English Solicitors - let alone in a different country.

We do not know if we bought cheap or bought overpriced, do we care? no, not really, as we bought it for our retirement and it is proving to be the best thing we could have done.