Will the property market ever recover

No, it isn't me that is retired, its my sister who lives in Eire.  She is a cancer survivor and has to pay to fly in and out of  UK for treatment as they didnt have the expertise in Eire to embark on treatment.  And all this comes out of a state pension, which is very low as she didn't have full stamps.  She doesn't live life on the hog and neither do other pensioners as far as I am aware and i think this is the very last group they should penalise, as most have like my sister worked hard all their lives and now need to be able to relax and enjoy life a little, so yes shame on the Irish Government for hitting a vulnerable group.  Perhaps some pensioners are lucky to be able to draw a pension, but remember it isn't free!  It's what we get promised in a welfare state!  And then greedy corrupt politicians rip them off royally!  And lets face it Irish politicians are not exactly known for their honesty either.  As my ole mum would say "shower of b'stards"!

I agree with what ojosazul88 is staying, but to put in more simple terms,

It is a tricky problem to find the particular calibration in timing that would be appropriate to stem the acceleration in housing premiums created by falling incomes without prematurely aborting the decline in the inflation-generated housing premiums.

This should be clear to everyone.

We escaped - just in time. A big loss on the apatment's  stand in price, but enough to buy a modest semi in a cheap part of the UK.

Are we glad - yes - it is nice to be in a country, which for all its faults, actually functions, more or less OK.

We miss our friends (and the sun) and feel for those who wnat to return to the UK, but are now totally trapped.

Well done in selling Landsker.  I agree it is nice to be in a country where most things function well and its very much black and white, which leaves no-one in any doubt etc.  And it is for this reason we vascillate about buying in Spain.  We already got badly burnt in Ireland with its over spending/borrowing back in early 2000.  We moved back to Ireland in 1997 and by 2000 we could see the writing on the wall.  Spains problems weren't as home grown as Irelands in that Spain had a massive influx of buyers from abroad and Irelands problems were brought about by its own over spending largely.  But of course the end result is somewhat similar.  When the property bubbles burst, this house of cards fell in on itself. Banks in the two countries faced massive losses and in some cases were pushed to insolvency, while in the real economy unemployment spiked as construction activity ground to a halt.

Figures published today showed the Irish deficit was the highest in the EU, after the State invested €16.5 billion net into Irish financial institutions in July last year.

It will be interesting to see now which countries remain in the EZ over the next year wont it?

The property market IS recovering.  Recovering back to where it should be after being greatly overvalued..

The Spanish bureaucracy never seem to understand their problem.  I own a 3 bed 3 bath with pool  villa well built but unable to sell of course.

 Murcia council  have prpared a drawing showing the area I am in, will be a legal area in the future  I have written to them three time to get something in writing to make it a littlebetter proposition for a purcheser  but  Murcia council never answer anything in writing!

Their illegal system they seem to delight in operating must as there are about 40,000 illegal properties in Spain,  have detremental 

impact , but most of the councils do nothing to improove the situation

I totally agree startmeup

Where I live in Sevilla province house prices are affordable for the locals

On our development the locals have always bought at a discount. They laugh when they learn how much the Ingleses have paid.

I was stupid and beleived what my English agent told me. However, hindsight is 20/20 and it is my fault for being lazy and not bothering to check.

Spanish wages are low and that does affect house prices. If wages rise then so will house prices as the cost of building them will rise. Would anybody be better off? or would we just revert to the same madness again?

potblack wrote: <<"It is a tricky problem to find the particular calibration in timing that would be appropriate to stem the acceleration in housing premiums created by falling incomes without prematurely aborting the decline in the inflation-generated housing premiums. This should be clear to everyone.">>

Unfortunately it isn't - because many only want to hear that which supports their bias - and most still don't know the full scale of the problem we face. This isn't a bog-standard cyclical event like the 90's, as someone mentioned, or indeed like any bubble situation we've ever faced.

House price bubbles, like all bubbles are only ever created by one thing - easy credit. The 'boom' effects of available land, population size etc. are comparatively small.

e.g. Densely populated Japan's property market suffered as much as 90% price drops in some places. That collapse was only supposed to last for 10 years - their so-called 'lost decade'. We are now entering their third 'lost decade' but their property market is still on its knees  - and that was before the tsunami and Fukhushima! The situation in the West now is much worse than when Japan first topped out.

The flip side of that scarce-landed country is the USA and Australia, both of which are virtually empty - even in most of their major cities - yet prices multiplied many-fold. So, the common-denominator in all cases is NOT land availability or population density but ridiculously easy credit and, as is now being revealed, fraud' on a scale never before seen. 

The only way that there isn't a total collapse in property prices now, is via inflation. That is going to take decades, initially by hiding the losses with creative accounting by the banks (as they are doing now) just to keep prices at their current levels. The only quicker route is hyperinflation. In both cases, house prices might remain the same on a nominal basis but with a loaf of bread between €5 - €10 they will have crashed in reality.

The right way to deal with this involves immense pain for a very short period of time followed by a return to the rule of law regarding the banks and the way they operate. Sadly, neither the bought-and-paid-for politicians and media have the stones to take that position. However, in their defense, that's only because (the vast majority of) the general public have become accustomed to living champagne lifestyles on beer salaries and demand that their something-for-nothing dream is maintained by the those same politicians and lacky press. So that option seems to be off the table and a very, very long rebalancing process is inevitable.  

This isn't doom and gloom. It's mathematics. The numbers never supported recent booms in Stock and Property prices and there isn't a hope in hell they will do so in the future without enormous bouts of inflation.     

This message was last edited by JD01 on 12/05/2012.

We bought our apartment in Spain in 2004 (height of the property market) with a mortgage on our UK home, as an investment for our retirement against a failing pension and other investments.   We have since retired last year and attempted to sell our apartment at 50% of its original price without success.    We considered renting but after calculations realised that we would nett approx. £30 per week after agency costs/maintenance and payment of things like community fees so decided this was a non-runner unless we are unable to sell at any price.   Where in the UK can you rent a 2 bed nearly new apartment with a communal pool and direct access to the Town Centre, 15 minutes from a beach for £30 per week?   Answer, nowhere in the UK which only goes to show what a bad situation Spain is in.   I feel for the Spanish people but we have our own problems.   We have subsequently had to sell our house to pay off our mortage and managed to buy a housing association bungalow for the over 60's with the residue of the sale proceeds.   I consider we are lucky to have escaped complete ruin but we are still left with a property that we have to sell as we cannot afford costs on two homes !

I blame the situation much more on the Eurozone than just on Spain and its construction industry (which as stated has malfunctioned on every front!) but the Eurozone which in my opinion was a non-starter to begin with, allowing countries like Greece to enter whose economy was in no state with little or no tax regulation on its people and unable to function properly within the Eurozone.   However, more recently the Eurozone has been affected badly by the incompetent, non-regulated banking sector.    Greed has been at the route of most of the problems with what has happened both in Spain through their greedy developers and council officials and in the Eurozone with politicians less interested in the people they are elected to serve and more interested in political ambition and setting the world on fire with idealogical ideas of becoming a super-power.

Will we get out of this mess ?    I don't think so, the problems both in the Eurozone and in Spain can only be solved by a complete change of direction.   Greece should opt out and go back to the drachma, so should Spain get out and everyone else.   Countries are being strangled by the Euro debt/regulations etc. and there is no obvious solution other than wringing more money out of the people in these countries who are now being busted down to third world economies by their governments including the UK, mostly working for minimum wage (that's if they can even get a job, which for the most part they can't in Spain), with spiralling utility costs (again by greedy corporate organisations bleeding people dry for huge profits) and therefore the people have no ability to purchase a car let alone a house !

We have enjoyed our holiday home in Spain but on reflection, it has all but ruined us.   I don't see a way out of the mess for Spain under about 20 yrs when all other countries return to employment and properties are at an acceptable price for the Spanish to buy.  Pity because Spain is a lovely country along with the people and they don't deserve the bad reputation that their government and their corrupt council leaders and builders have inflicted on their country.

The only people to blame are ourselves.

The banks did not force people to borrow more than they could afford. Governments were happy to let things continue because people seemed happy and it made them look good. Gordon Brown stole peoples pensions but few people noticed because it did not immediately affect them. If people had taken more notice then they would have thrown the Labour Party into the dustbin long ago. The present coalition are just as bad as they continue to make unaffordable promises. The so called cuts do not exist.

Public sector workers were promised and given unaffordable pay and working conditions but did not ask where the money was coming from.

Now the bills have come in all over Europe and there is no money left.

Pay and working conditions will have to decline until Europe is once more competitive with the rest of the world.

Apathy has got us where we are. In future use your vote.

Meanwhile enjoy living in Spain where you can still live a quality life on much less money than you need in the UK.

It is sad to hear about  people who've been ripped off, robbed of their life time savings, etc. Without intending to offer this as "consolation", people have also been ripped off in other parts of the world. Unfortunately the doom and gloom so prevalent in this  thread is a good prescription to make them feel worse.

I have no regrets about having bought my villa 8 years ago. I love the location (Pilar de la Horadada, Costa Blanca South) and hopefully should be retiring there in a few years' time. Despite the tough times, rental money is still coming in and this helps pay the bills - plus the fact we and our families use it a few weeks a year. 

I'm not part of the "get-rich-quick" brigade .My time frame is my children's life time. Perhaps it is this approach that makes me immune to the pervasive feel emanating from the maistream media, always keen to make a buck out of people's miseryt. The truth is that different minds can interpret the same fenomenon differently. Yes, the market is depressed, Europe is on a knife edge, but life must go on. If you're life has been reduced to worrying about what's happening (and I know that this is the case for some people whose livelihoods have been badly affected by this crisis) I sincerely feel sorry for you. But I always try to see through the thick cloud that doom times tend to cast on the present. This is something I've always done in the face of crisis (believe me, i've been in the eye of the storm many a time) and have ALWAYS been able to catch a glimpe of the future. 

Jeffsears wrote: “The only people to blame are ourselves. The banks did not force people to borrow more than they could afford………..”

That’s a bold statement and, in my opinion, incorrect. Every player in this mess bears some responsibility but the most culpable, by far, are the banks.

It is too simplistic to say that the banks did not force people to borrow money. In a way they did by knowingly and deliberately cultivating an environment where to just get on the property ladder in a bed-sit, a young couple had to borrow many multiples of their combined salary that the banks have ALWAYS hitherto known was imprudent lending.

Is the rape victim the ‘only’ person to blame because of what she was wearing in ‘that’ part of town during ‘that’ part of the night’? Is the abused child the ‘only’ person to blame because it knew better than to take sweets from a stranger? While I agree that the victims could and should have made better choices, their mistake could never, ever exonerate the person who knowingly set out to commit the crime. To even equate blame is not even close – much less make the victim the ONLY person to blame. 

Even if one accepts the false premise that no one forced people to borrow money, then BEFORE that happened, who forced the banks to lend money to people that the banks themselves knew could never repay it? Whichever came first is where the majority of the blame should lay.

The banks simply took the age-old adage that:

“If I owe the bank a million, I have a problem but if I owe the bank a billion, the bank has a problem” and turned it around to:

“If we have exposure to un-payable debts and fraudulent derivatives bets in the billions that we can never hope to cover, we have a problem but if we have that exposure in the trillions, the nation has a problem and they’ll HAVE to bail us out or we’ll crash the whole system”.

If you don’t think the banks knew exactly what they were doing over the past 10-20 years, you need to do much more research. I’m saddened by the fact that we have so quickly accepted entire populations’ ‘austerity’ as the only solution and so quickly ignored the real culprits at the root of the problem thereby letting them get away with it so easily without anyone being held accountable and/or prosecuted.   

William K. Black: “"If you go back to the savings and loan debacle, we got more than a thousand felony convictions of the elite. These are not, you know, tellers or something. We today have zero convictions, zero indictments, zero arrests of any of the elite, non-prime lenders that, through their fraud, drove this crisis."

www.pbs.org/moyers/journal/04232010/watch.html

It virtually ensures that their fraud will continue and probably escalate. Why wouldn’t it? After all, the whole point of never paying a blackmailer is to ensure that you aren’t held hostage to his demands in perpetuity.  For allowing ourselves to become their victims so easily and with barely a whimper - we do indeed “only have ourselves to blame.”               

The property market will continueto drop to a very low level which in my opinion will be a realistic price level for holiday homes because they increased to almost double the price a few years aogo, which were far too artificially high. 

So take my advice expect Spanish property to become quite reasonable and people ,In time, will start to buy again. 

I,m a lucky guy on two counts after enjoying ten years in Spain I sold my holiday villa within two months, for a reasonable price, and got my money back to UK before the Euro deteriorated and then I won the lottery so money and prices don't bother me any more. Now I sail and jet off to exclusive places but I'll still be watching the Spanish market

Good stuff,

great, isn't there something about better to be born lucky than rich. what do they say about having both???

Regards

Norman

JD01-

I agree with all you say, people cannot be held accountable for the conditions they find themselves in care of their guardians (the government), so I lay most of the blame for people's austerity in Europe firmly at their door for lack of regulation and poor decision making based purely on their political ambition and greed.   If there were any justice politicians should go to jail for bankrupting the entire population through lack of measures taken to ensure the protection of their country's people.

I also agree that people are tool complacent in not voting parties out when it is obvious they are making promises they cannot possibly keep, but to a certain extent we can be excused from not knowing the consequences of their policies when they are experts in covering up the truth of where this money will come from and let's face it all politicians are born liars.   How they sleep at night is beyond me, although I would hazard a guess they have no conscience or ethical stance, otherwise they would not be in politics.

Honeywater -

It is easy not to fall prey to negative thoughts when your future is not completely bleak, as ours isn't.   Yes we have lost a lot of money but I have always regarded life as a gamble in any event and you have to speculate to accumulate.   The fact that we didn't but in fact lost around £56,000 that we are currently aware of (without taking into account any further drop and expenses in selling) we have had to take on the chin, but let's face it, some people have lost literally everything, not the least of which are those poor people who have had their houses bulldozed and lost their entire savings and for which I believe all those involved in selling the land and the development to these people, should have been thrown in jail and throw away the key !!

Forgot to add to my earlier note I have given £2 million to charity

i too agree with you JD01 but it is a complicated subject for sure.

Here in UK we dont have a choice re voting, labour and tory are exactly the same!  Ukip are a 1 party policy and i will vote them next time as i cannot vote for labour or tory anymore.  Maybe the green party though.

The banks of course are crooks, and politicians are now career seekers and psychopaths which hasn't helped!

As the Chinese proverb and curse goes   "may you live in interesting times" eh?

This shall sure be an interesting year and we should get a better idea of which way things are heading.