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Is now the time to buy property in Spain
The question has been asked in various forms for some while.
I have just read this:-
Real estate agencies are reporting that business has shrunk by 75% since 2006 and around 2,000 agencies across Spain have closed over the past six years. Sales by business consultants and real estate agencies again experienced a 'significant' contraction in 2012, reaching around 1,100 million euros, 11% less than in the previous year.
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and here is the other side of the coin.
Thursday, December 13, 2012
Source: Ivan Radford
Foreign buyers are increasingly more attracted to houses on the market in Spain because of the possibility of having a second home in a warmer area that will only cost more or less half or even a third of the original asking prices that were seen in 2008.
The Public Works Ministry stated that 8,803 houses were purchased by foreigners in the third quarter, a jump of 18 percent from a year ago. This is consistent with the growth in this area in the last five quarters.
In the first and second quarters of 2012 we saw an increase of 16.2 and 15.3 percent consecutively. This is great for the market because of the vast quantity of homes sitting around unsold since the crash in 2008, and the government is taking advantage of the situation by promoting sales and tax improvements to non-residents and foreign buyers.
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www.taylorlandandpropertygroup.co.uk
still here after all these years!
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I do think it is the right time. Knowing prices of the Bad Bank the market is adjusting to this. No further decreases.
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Maria L. de Castro, JD, MA
Lawyer
Director www.costaluzlawyers.es
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If you are thinking buy a house in Spain, be careful!
I had a horible experience with ** EDITED - Against forum rules ** from Alahurin, Malaga. I bought a house in Spain and he tried to charge a lot much than he budgeted me. Very disappointed. Don´t use his service. After 1 year I have not could finish my contract with him.
This is a great moment to buy a house in Spain and the price is unbelievable cheap. You will need a good adviser to find a good property.
good luck!
This message was last edited by eos_moderators on 21/02/2013.
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I'm with Tamara on this one. I bought in the last quarter of 2011. Was it a good time? Will the value of my apartment go up or down? I don't know, but I do know that I love the place and the people and that is really what counts.
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Brian
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If you are thinking of buying in Spain, then now is the time to buy as house prices are rock bottom. Will they increase? Only time will tell but property prices always increase over time it is just now long you are willing to wait. The first house I purchased in the UK cost me £8000 about 30 years ago and these are now selling at around £70,000/80,000 took a long time but if I still had it I would be laughing.
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Mo&Bryan www.bryansblinds.com & www.discovercostacalida.info Why not see if can we help
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Mo
then now is the time to buy as house prices are rock bottom
You may be right, but then all of those who have said that over the past few years also thought they were right, but time has proved they were not.
I personally would be very surprised if the bottom has been reached, but I am not on the point of selling nor buying being very happy where I am.
My son has an apartment for sale. A couple of months ago he took it off the market and decided to let a friend live there at no charge, until the market recovers, however long that may take. He is not holding his breath.
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people are stil walking away from apartments and villas
so al these houses will pop onto the market in the next 2 years.
2 years ago people said the market wont go down anymore.
they were clearly idiots at the time and have been proven as idiots.
the market has a long way down to go and more propertys enter the market daily.
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i coldnt stay away from you miserable whining whingers for some reason
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I suspect that we are still a couple of years from "Rock Bottom" but I doubt if you will even know exactly when this is. The gradual bottoming or levelling out will be a slow process, as will the eventual recovery. Expect to see several "False Dawns" before a real recovery becomes established. A larger influence on what you will pay for a property (if you are buying from the UK) is likely to be the £/€ exchange rate. Despite the recent setback, I see an exchange rate approaching 1.4 in the next 18 months or so. This is likely to have a larger effect on the effective price now that we are getting closer to bottoming out. Despite all this waffle, unless you are buying purely for investment, a property that excites you now is unlikely to be a bad purchase. Yes, it may go slightly further down in value, but if you are not planning to sell any time soon, there's no problem.
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4 years and it will be rock bottom.
why do i say 4 years?
i get a feeling in my water and unless its a water infection i wil be spot on i am sure.
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i coldnt stay away from you miserable whining whingers for some reason
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I had one of my two properties on the market three years ago. I decided at the time to "buy" it myself instead, fee/vat-free, and have no regrets. I've been renting both houses out during the spring/summer period and making some extra cash through cheap long-term winter lets. That's more than paid the bills, even during these tough year.
Being the positive thinker that I am, I can see the silver lining in this obscure financial cloud. Yes, prices have dropped (whether and for how long they will continue to do so I don't think anybody knows), but this has not made Spain any less popular as a tourist/retirement destination. Far from it, some areas seem more popular than ever. It is precisely because of the collective fear and pesimism that the current situation has has triggered that there are far more people renting than buying, so perhaps it is time to think more as "landlords/ladies" than as "vendors".
This message was last edited by honeywater on 22/02/2013.
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An Investor said to me "Im goin to wait till the market hits rock bottom before I buy" he kept waiting and waitng then one day he said "its now the right time to buy "he called me up and asked me to bring the forms out tomorrow after 10 years of waiting ,I duly arrived and his wife answered the door " Im sorry she said he died late last night"
The MORAL of the story is his name wasn,t WARREN BUFFET
This message was last edited by rod on 22/02/2013.
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A few items on the check list, (which have Regional variations)
Property is licenced for the type of letting, short, vacational, long etc.
Community have no rules against it,
Town Hall approval,
You have a licence to let, from the Junta (with regular, charged for, inspections)
You have the safety checks before each let for the gas and electric.
If you use an agent you almost certainly must add IVA,
You must have properly registered letting contracts,
Depending on your legal advice, you may finish up paying 24.75% tax on the gross income, with no allowances for
even the utility bills, maintenance, wear and tear, cleaning etc.
If you have a cleaner, mantenance man etc you must pay (some of their) social security, insurance etc.
To comply you would be wise to use a lawyer, tax specialist, accountant etc.
I have almost certainly missed a other few items too !
Letting legally ? Probably not worth it.
This message was last edited by johnzx on 22/02/2013.
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Well said johnzx. A lot of expats who go on about the mess Spain is in, completely ignore the tax liabitlity they have even if they just have 'cheap winter lets' or a few summer lets.
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Johnzx, if I had the same concerns as you I'd have most certainly lost my property to the bank. I'll try to address some of them:
Property is licenced for the type of letting, short, vacational, long etc.
This depends on the region. I have a good "gestor" who takes care of all that.
Community have no rules against it.
None whatsoever. I don't think it would be lagal, anyway.
Town Hall approval,
You have a licence to let, from the Junta (with regular, charged for, inspections)
As above.
You have the safety checks before each let for the gas and electric.
This would apply to long-term winter rentals only. I have good contacts for checks and emergencie repairs. My other half is Spanis, so we employ mainly Spanish folks and that works out cheaper.
If you use an agent you almost certainly must add IVA,
No, we don't.
You must have properly registered letting contracts,
These are standard contracts. We don't register them adn have had no problems so far (touch wood!).
Depending on your legal advice, you may finish up paying 24.75% tax on the gross income, with no allowances for
even the utility bills, maintenance, wear and tear, cleaning etc.
My gestor takes care of that. Even with tax priced in all the bills get paid.
If you have a cleaner, mantenance man etc you must pay (some of their) social security, insurance etc.
I agree with you, though, that this isn't everybody's cup of tea. You need to know what you're doing and, above all, you need to enjoy doing it, which we do. Perhaps I should see this a good business opportunity - helping other owners generate some cash through letting their properties.
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Honeywater
I was not commenting on your situation, so I was not seeking any justification from you, but as you demonstrate, 'blissful ignorance' is a blessing.
As I said earlier, when my son (an accountant specialising in property in UK) researched the Spanish law, with an accountant here, "My son has an apartment for sale. A couple of months ago he took it off the market and decided to let a friend live there at no charge, until the market recovers, however long that may take. He is not holding his breath. “
My son used the accountant, although expensive, as the information I had obtained from a gestor, who also runs a business letting customers properties, was, as she later admitted, woefully inaccurate.
Had it been straightforward and cost effective, my son would of course have let.
This message was last edited by johnzx on 23/02/2013.
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Is it time to buy ?
It appears not. Prices continue to fall.
This from an article in 'El mundo'
The average price of housing continues in almost free-fall, although the decline seems to be slowing down slightly. During the month of March, the house-prices fell 10.7% year on year, against February figures of a fall of 11.6% year on year, as reported by the real-estate valuer and appraiser 'Tinsa'. Discounts driven, above all, by the finalisation of the period of tax benefits for purchases made before January 1st.
The adjustment accumulated in the fall of the average price of housing has now reached 36.3% from the maximum amounts achieved in December 2007, before the crisis began... The adjustment of prices since December 2007 reached 41.9% in the Mediterranean coast, 40.3% in the capitals and large cities, 39.5% in metropolitan areas, 29.6% in the rest of the municipalities, and 29% in the Balearic and Canary Islands, based on data from Tinsa.
Seems, as a non expert, my comment on 21st Feb was closer to reality, when I said,
"I personally would be very surprised if the bottom has been reached, but I am not on the point of selling nor buying being very happy where I am.
My son has an apartment for sale. A couple of months ago he took it off the market and decided to let a friend live there at no charge, until the market recovers, however long that may take. He is not holding his breath."
This message was last edited by johnzx on 11/04/2013.
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Yes johnzx - I remember the discussion. I was (and still am) looking for a bigger property, but I have been in no hurry and over the Christmas/Easter period I pretty much let it go as I have been really busy. I decided to pick up the trail again last week, and using Kyero to start going over some of the properties I was interested in last autumn, I was struck by how much further the asking prices have fallen in that 5 or 6 month period. Now it may be that the sellers will not go below that asking price, meaning in effect the price has not fallen, since when I was looking it was a case of make an offer - but the indications are very much that properties are continuing to fall in price. Over the past couple of months, I have had mailings from La Manga, offering apartments at 70000, and a mailing from Roda Golf Club offering 2 bed apartments at 62000. Now, I have friends on both of these resorts, and I know what they paid. I would say that is pretty frightening, and what people assumed would be a nice little bonus for familiy when they have gone, is now looking like a real liability for family left behind.
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Having said all of that - if you want a place in Spain because you love Spain - then clearly it is a very good time to buy. But don't hold your breath that it will turn into a worthwhile investment.
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