Upturn in Spanish property sales?

Property by us is selling quite well and briskly at the moment although, surprisingly, it is the new builds that are going strong. So-called Eco flats are very popular with the Scandinavians and Eastern Europeans. Also surprisingly, many people are still buying off plan. On another site, people are saying Phase 1 will be ready in May and so on. Considering these have a premium of about 30 to 40 k on top of the resales, they also have nothing there. The gardens are just red earth with a small path leading up to the house. Resales will have extras added such as paving, utility rooms, satellite dishes, toldos and, of course, a lot of furniture to keep you going. The new ones have none of this and go for a bit more. Maybe some of the cheap white goods but that's about it.

We paid €190.000 for our house just before the UK banking crisis. With taxes (lower at the time) and so on it came to exactly £140,000. They are now going for about €150.000 or approx £125,000. Larger houses at the time costing €325.000 are now being offered for just over €200,000 so a larger hit there. 

Considering the amount of resales available, and some streets seem to have every other property with a se vende sign outside, I do wonder why the new build ones are selling so strongly. A penthouse apartment on our community with build area of 180 sq m and 3 bedrooms is up for sale at €140.000 and has all the good things done to it including gazebo on the roof, glassed in balcony at the back and so on. A new one across the road with absolutely nothing is going for €185.000 and that's only 110 sq m with 2 bedrooms. That at least a dozen of the new ones have been sold whilst the penthouse has been up for sale for nearly 2 years is a mystery.

Thanks for your insight,  Mickyfinn. Personally speaking, in all the years I've been reading info on whether to buy a holiday home in Spain, your post really resonated the most. I love Spain but I also like protecting my hard-earned savings. I've long held the desire to buy our own place in Spain but it was always heart versus head. Cheers.

Chris

Never understood why people have the need to own holidays homes except of course to show off to  others how well heeled they are.....

Unbelievably the new urb Mar de Pulpi is going great guns. Nearest small town is San Juan de Los Terreros, Murcia. They are now on fase 3 !!! Prices of a 2 bed are c160€. By a beach but not on a golf complex.... so not cheap.  

According to stats Murcia is doing well re selling property  and know 3 Brits, local to me, who recently sold individual 4bed properties on 5000m plots for c €280.000

is your money better in the bank earning little interest or indeed banks charging you to hold your money, or in bricks and mortar ?

The latter for sure - if it's your home and not a holiday home. In that budget bracket, well-informed investment is the better performer if it's about spare cash.

"is your money better in the bank earning little interest or indeed banks charging you to hold your money, or in bricks and mortar ?" Well, it all depends on timing and crystal balls, doesn't it? If you bought property in Spain 20 years ago and sold 10 years ago, you'd say the latter, but if you bought 10 years ago and tried to sell today, you'd say the former for sure. The next 10 years? Who knows? banks pay virtually no interest, but so far generally don't charge to keep your money. Property on the other hand does come with quite a few costs of ownership. 

As someone else pointed out, buying a home to live in is one thing; buying a second property as an investment is another thing all together, and should be carefully researched, just like any other investment. As I've said before, the buying and selling costs of Spanish property alone probably make it less viable as an investment vehicle than other alternatives (such as stocks & shares for example). And as a place to park some capital destined for inheritance - unless it's a revenge thing I can't think of one good reason. As for leaving Spanish property to charity if nobody else wants it - it happens, of course; the church here in Spain for example often gets left property, but I've heard of cases where they've actually turned down the bequeathal due to the inheritance tax liabilty (payable before obtaining ownership) and the costs / hassles of selling, or of maintaining it if kept.

We are on our third property in Spain.

The two previous ones we broke even on, so we balance the costs of ownership against the time we spent there. We think we got a good deal.

This time we are starting on a loser because property tax has gone up to 10% and Valencia valued the property at twice what we paid for it. So we have effectivly paid 20%.

Lawyer said we may get the overtax back, but pigs might fly. When we can no longer travel back and forth we will sell. Hopefully the market will have improved by then.

Not a financial investment, but we enjoy the different weather and lifestyle, so we get an intangible return. It might be cheaper to let but it is not so convenient, the property unlikely to be fitted out as we want it and we have our own possessions and clothing waiting for us.

If it is a financially rewarding investment you are after you need a place you can let for holidays at a high rental through the season. This means you need to be very close to the sea or some other attraction.

tteedd, perhaps I'm wrong, but I thought you said a while ago that you lost a lot of money on a purchase at Mazarron Country Club?  If you really broke even overall you've done remarkably well.

Given the purchase costs of any property in Spain you have to assume you'll make a loss.  Even if you buy now at current prices you'll probably lose money, but thankfully there's more to it, than an accountant's assessment.

Obviously those who have bought holiday homes in Spain are going to defend their choice. But look at the base facts:

To buy/sell costs a fortune in taxes.fees and if you break even when you sell you are lucky. The government are determined to stamp out buy to (holiday) let as they want hotels full and not private homes, so after even more taxes, magement, maintenance and cleaning fees you will be lucky to make 2% on your investments in a season, according to posters on a well known property forum website.

Why would you buy a second home in Spain and only use it a few weeks each year? Why would you buy a house that is so poorly built that it would not be allowed in 1960's in UK - never mind today. I hope that all of you with the rose tinted specs make your fortune investing in Spain.................  Good Luck!

I do smile when people come onto this forum to tell us Spanish Property Owners that we have made a bad decision, we wear rose-tinted glasses and that we have somehow ended up with a sub-standard property that will not make us rich.

Not all investments can be counted in pennies, I have a place in the sun that I can pop over to for £30. I bought in January and already been over 8 times, I'm going tomorrow for 2 weeks. My health and well being has improved massively from sunshine, sports, healthy foods and a new-found challenge of learning Spanish.

How can you put a value on that?

Woodbug. 

Not sure what 'Spain' you are referring to.  Probably not the real Spain where I have lived very happily for around 30 years,

@tricia5, spot on. same here.

I bought my place in 2013. I have the most amazing bunch of neighbours you can imagine. I have a beatutiful garden and can pick my own fruit, heaps of it. I can walk to the beach in 5 minutes. Within my own four walls I can do exactly as I want. Just arriving here makes me more happy than winning the lottery. There is no price you can put to that. 

The "investment" discussion here is referring to financial investment - that is, something that is expected to (or hoped to) give a financial return or grow to be worth more. Personal gratification is another thing altogether, which naturally you cannot put a price on. Each to their own, and if someone gets a lot of personal satisfaction out of spending their money on a holiday home in Spain (or anywhere), then there's no reason why they shouldn't do it, anymore than someone else choosing to spend their hard earned on a sports car. What gets the debate heated is people who for whatever reason are disillusioned with their purchase, now desperately trying to defend themselves & justify their choices by claiming it was a brilliant investment. Tteedd put it perfectly: "Not a financial investment, but we enjoy the different weather and lifestyle, so we get an intangible return."

Woodbug, sorry but I reckon Tricia5 and a bit reluctantly Johnzx have got it right.  It seems a common failing but it's not good to base everyone's assessment on your own situation.  I forget but I think I've made 6 trips in the last 12 months with a total stay of 4 months, I don't rent out, but I still reckon I've had my money's worth.  

I wouldn't want to stay in hotels for that period of time, never mind the cost.

And agree with Roberto - unashamedly into personal gratification  . On paper I've lost a serious amount of money, but I expect to be using the place for many years to come and possibly by then the amount will be less.  

No rose coloured specs perching on my nose.  The important thing for me is to treat the "loss" as water under the bridge.  Last month we had our grandchildren staying with us and they loved the place - could hardly drag them out of the pool, they absolutely loved the place and the environment, as the expression goes "that is priceless".

Thats your view Acer and you are entitled to that. If John and others choose to spend 30 years in their house that's their choice and good luck to them. Choice depends on whether you want to make money, lose or break even and finally, the need to be mobile. One thing is for certian here - you won't make money dabbling in property and there is a big difference with those who live here and those who holiday here both in terms of requirement and expectation.

Well, actaully, a great many people made a lot of money "dabbling" in property in Spain - when EOS started, that's virtually the only thing we were all talking about! But times have changed, and without the benefit of the aforementioned crystal ball, I'd hazard a guess that those circumstances aren't likely to return in our lifetimes. As for the need to be mobile, that's a very valid point I think. Spanish property as an investment is a very non-liquid asset, hence my previous comment about leaving it as an inheritance. In many (probably most) cases, your heirs will not thank you for it.

We also made money in the old days with property deals in Spain but this all came to an end when our development near Marbella was stopped along with all others in the town in 2002 when the Mayor was arrested for the second time on corruption charges.

It took us 5 years in and out of court to prove that we had bought the land legally and had full planning for the 26 apartments and where the money had come from to fund the project. We had sunk around €350k into it at this stage and by the time we got the all clear to continue – our funders had lost their appetite for the project.

We still have 2 two of 6 floors standing but the project, like thousands of others had to be moth-balled.

One of our development partners has since passed away and to be quite frank, we don’t particularly care if it falls down now as the two of us left have no heart to continue with this fiasco.  We were victims, like many other developers in the town, of a corrupt and selective ruling system.

It's perfectly possible to obtain 'personal gratification' from successful investments. It depends on the individual. Making money in the financial markets is hugely rewarding and greatly improves your self-confidence and esteem. Not for everyone I realise that but as I have said earlier a holiday home is just that, for a holiday. It's not an investment just an indulgent burden. Of course many people would disagree and some in the past have made money myself included. However the market has changed utterly in Spain and if you don’t take that into account you’re in trouble.

An investment is something that does not come with any costs attached to it and produces gainful financial rewards. Spanish property comes with many such attached costs which you are unlikely ever to bring you financial rewards. 

British people unused to Spain rarely understand in their hearts that Spain is not Britain. It's basically a fairly lawless place. There are laws but they are usually either ignored or manipulated to meet the needs of financial interests. Corruption permeates every faction of the society and it's deeply engrained in its culture. It will never change because too many powerful vested interests would lose.

If you accept these arguments then, buying a holiday indulgence that you know is going to cost you money in a corrupt society where the rule of law is weak, seems on the face of it rather a reckless step. However each to their own.

It's basically a fairly lawless place. There are laws but they are usually either ignored or manipulated to meet the needs of financial interests. Corruption permeates every faction of the society and it's deeply engrained in its culture. It will never change because too many powerful vested interests would lose.

Mickyfinn that's a good descrition of investment bankers at their worst....UK based!

Investments in health & wellbeing are also productive. I have a varied portfolio and this pot is marked 'fun'. Not indulgent ( that would be a £10k cruise thats over in a flash ) nor burden.  I'm not a fool, I researched for years before buying this apartment.