Property price 'increase' reports - fact or fiction?

After reading several of these 'reports', I am appalled at how the authors obtain their figures. They are so misleading!

Reasons are :-

1. The asking price tends to be pulled out of the air by owners and agents. Based usually on what they want plus costs and commissions.

2. The bank valuation is based on euros per square metre, not a comparable of the sales price and takes factors such as build quality and location into consideration - not gold plated taps!

3. The actual selling price is agreed between vendor and buyer - no one knows this except them and the agent!

4. The declared price on the escritura (title deeds), which with 'b' money can be ?????% lower than said sales price AND bank valuation

So HOW do they base ANY facts on this at all??????????????????????????????

Answers on a postcard please!

Hi Rixxy

What you are saying is of course true however if that is the case how can anyone tell if/when or how a crash in prices will occur or indeed mointor any rebound,

Regards

Jim

The current Spanish Gov Stats show that prices have increased in the first 6 months but at a much lower rate than previous

Same as UK!!!

But no 'crash' but in all property markets there are pockets of over supply.....one example may be in Manchester City Centre with the buy to let properties

So in Spain there will be similar locations of over supply

But again  even in Manchester if you are selective you can get good buys.....same in Spain

I am positive with Spain on selected locations!!!!

Hi

Yep me to.

Just that on some reports they are predicting 30% drop in property values in Spain but as Rixxy pointed out from what point do you START either upwards or downwards

As she rightly points out its perhaps rash to predict at the moment until such time as the market sorts its self out

Regards

Jim

Hi Justin, one of the reports was on another of your threads and is on the spi page. I often see these come into my inbox, they are based on kyero (a web that owners place their properties onto!!!) and the info taken from that

The banks here have a curious way of 'increasing' their valuations and I know this from fact. Their valuations go up by a given percentage each year. Also developers just decide they will increase by inflation or more and so the market is deemed to have increased!!

I can say from my end of things, sellers are far more flexible and will now listen to what I tell them - my advise is only suitable to a small percentage of them at the moment, but I foresee AND ITS ONLY MY OWN OPINION BASED ON PAST EXPERIENCE that more and more repos will come onto the market - not in the good locations ie marbella/banus/nueva andalucia and city cebtres, but on the outskirts where prices have tried to compete with proven locations and where land is in good supply - these are going for cost price ie mortgage plus related selling fees at the moment.

A time will come, possibly within 18 months, when the pressure on the banks who will have keys handed back to them by sellers uping and offing, when the banks themselves will have to wipe the debts and auction them for whatever they can get (ie early 90's UK) to clear debts. At the moment they are trying to shore the whole things up, but its easy to see whats going to happen.

However, the properties available may not be in the best location or have the best aspect - if they did then they would be sold! So, hard investors (mianly the Spanish) will buy these, sit on them, rent them out on nominal rents and then sell them on in a few years time when the market starts to recover.

If buyers want a specific property, then they will have to pay the asking price or the best deal they can get from the seller.

Not an easy choice to make, but buyers have to define what they want - they are NOT going to get an absolute bargain at 40% of bank valuation in the centre of Marbella with a sea view - the Notary would get it first!!

With regards to pricing, as the b money is phased out - even the spanish now are insisting on declaring everything and the banks certainly are now, then finally the escritura price will I think become the norm against which valuations will eventually be based, the comparable system is the best and fairest.

Very Intrigued !!!!

Just interested in the fact that over valuing, by whoever, vendors or agents. If a lot of people are having mortgages and surveys are the properties actually valuing up on survey?  I guess if they are cash buyers then anything goes, but if the spanish market is slowing down surely the lenders are getting twitchy about loan to value? Just interested that's all. 

P.S. Have just valued my own property in Spain and I think it has increased in value by 50k since January

Hi Candyfloss,

Yes the banks are getting twitchy to say the least. A while ago a non resident could obtain 80% of bank valuation, now its 70% with a maximum of 100% of the actual purchase price. This means if anyone wants to buy on full finance with purchase price and costs included, then naughties have to be done with the purchase contract stating the purchase price is higher than it actually is!

This has been going on here and some people caught and arrested over it.

There can also be huge discrepancies between valuers on the same property and some are starting to use the sales prices advertised on estate agents websites to bring their valuations down.

The Bank of Spain have requested valuations to decrease! Some evidence of it with some valuers, others are valuing as before but no real increases.

A wondrous time!