Just my take on the current property market...

"hi all, been reading all of the posts in this tread (good food for thought )i am currently in the buying stage of buying anapartment in cds have 30% on a 2 bed money put down in 2005 off plan total price 198,000 before iva viewed same style apartment 2 weeks ago an viewed another one with a very large terrace plus better views an small yard of the kitchen the builder is looking an extra 20,000 this seems a good deal to me should a go ahead an buy this one at an extra 20,000  with the way the market is going? not buying for short term profit ,thoughts please."


"You keep going on about apartments for 200k that nobody will buy,i am not suprised, that will buy you a nice 3 bed villa around here,i am not sure what area you are in but it must be massively overpriced.
Apartments here are selling for around the 90k mark so why would you pay 200k?
Rixxy works in the CDS where an illusion was created that you MUST pay over the going rate to live there as that was the norm,now the stark realisation has hit that it was all smoke and mirrors."

Enuff said........

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so for future refence your opinions are based on the Costa Del sol and not the rest of Spain,oh at last we agree on something.
The difference with this area is that prices started low reached reasonable and are holding that...........
Remember this thread is titled "just my take on the property market".
"vested" interest suggests everyones opinion is biased and based on lies other than your own,by the way, you are not a rental agent are you..............?

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RIGHT THEN!

Quote TJ: "Don't fall for the "its my home I don't care if it falls in value" line - thats the line used by all these people on here who strangely have a vested interest in you buying - they are agents ffs and desperate for some income."

So, as I used a similar line:

"Property prices will always fluctuate, they cannot continue to rise and rise, but as we plan on living the rest of our lives lives in Spain, what do we care about property prices fluctuating, negative equity, etc - as in a few years time, it WILL be the reverse of what we have now."

Then 'In the world according to TJ' that makes me have a vested interest in SOMEONE ELSE buying property, does it? DOES IT HELL!!! I couldn't give a rats arse about anyone else buying, selling, renting property in Spain. Really couldn't give a toss. However I do care about what people are letting themselves in for, and if I can help them make a more 'educated' decision, then I think it's my spare time well spent!

What I do care about is someone like yourself, who thinks they are the 'Chronicle of Spain', because you have been there ALL of 8 MONTHS, tell someone else not buy a property at €200k when next year it will be only worth, and you will be able to buy it at, €100k. Even I with my limited knowledge and dealings in Spain, for over 2 years now, think that's a load of old tosh. However, it is your opinion, and I respect that, but tell me .....

Where did you get your crystal ball from?

As I also said earlier:

"In a nut shell, there is a world recession. Where ever you look, at whatever country, there's recession. Liken it to the seasons of the year, however they happen over decades, just take a look at 30's America and then look at 80's America."

And that statement is based on available FACTS, not SUPPOSITIONS as to what the future may hold.

I believe, as many others on this forum do, that the worst is here and now, and in the future it will get better, not worse. If I am wrong, which I could be, then I still think that a property losing 50% of its value in 6 months is, quite frankly, ludicrous.




This message was last edited by TechNoApe on 6/13/2008.

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Hope you are right Techno.I've just started the buying process

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Look at the property market as if it was a journey on a train:

The train has to keep moving to reach journeys end, it has many stops along its journey, not always moving forward, sometimes it has to move backwards, sometimes it moves very fast, sometimes it moves very slow.

However, at some point you have to get on it, in order to get to your destination!




This message was last edited by TechNoApe on 6/14/2008.

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Hold on a sec.

I came on here to give my opinion on a question posted here a few posts down about a bloke who wanted to know if he should pay 20k on top of a 200k price for a 2 bed apartment. My response was to question the price of 200k in the first instance and to advise trying to get out of the contract altogether rather than add good money to bad. I think this was a reasonable comment.

Georgia immediately came on and I'm guessing not having seen I was commenting on a post on this very thread about 6 posts down, immediately lauched into me asking my I was talking about 2 bed apartments for 200k saying and I quote

"You keep going on about apartments for 200k that nobody will buy,i am not suprised, that will buy you a nice 3 bed villa around here,i am not sure what area you are in but it must be massively overpriced.
Apartments here are selling for around the 90k mark so why would you pay 200k?
Rixxy works in the CDS where an illusion was created that you MUST pay over the going rate to live there as that was the norm,now the stark realisation has hit that it was all smoke and mirrors."

So it appears that Georgia agrees with me - why pay 200k when you can get one for 90k.

Since I said it would fall by 50% , it seems by Georgia's advice its already got there. Thats how bad the market is.

Georgia is a professional and I'm guessing by now knows her business. Seems to me Technoape that Georgia and I already agree.

Buying a house is nothing like a train journey or if it is why not get on the train when its 100k cheaper. Seems like a very expensive ticket for a very unpleasant journey.

House price to wage ratios are the most expensive in the world in Spain, its an accident waiting to finish. In the most advanced country in the world ie the US avg. house prices are now 180kUS or 90K GBP.  Or to put it a better way around 4-5 time wages.

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Just one small point TJ--Georgia  is a bloke.Confusing isn't it?   just like the property market.

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Georgia also live on the Costa Blanca and the person who was asking the question you were supposedly answering is looking to buy on the Costa Del Sol.

Different regions, different price structures.

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TJ,

Georgia HAD read what you had posted, as had I. Did you read MY post to the SAME question, methinks not.

If you had simply stated what you have below:

"I came on here to give my opinion on a question posted here a few posts down about a bloke who wanted to know if he should pay 20k on top of a 200k price for a 2 bed apartment. My response was to question the price of 200k in the first instance and to advise trying to get out of the contract altogether rather than add good money to bad. I think this was a reasonable comment."

Then I would have not have posted as below. Indeed did I not say a similar thing, in saying that €20k for the extra seems to much!

However, your posts were a direct attack on anyone and everyone who posted in a 'positive' manner, stating that they must have some vested interest in the Spanish property market. Further, it seemed that your knowledge was supreme, and everyone else was talking rubbish, and therefore just listen to what you had to say.

In other words, you came over very, very heavy handed.

Further, as Semijubilada said below, Georgia is in the Costa Blanca, NOT the CDS, and property prices are much cheaper for like-to-like in theses different areas. And as Georgia said, there's and artificial inflation on properties in the CDS, which is MUCH higher than anywhere else in, but the premium is because of the area itself, it's been heavily anglicised and we brits keep soaking it up!

I am buying a 2nd property in the area as we speak, and I have seen that there are an awful lot of properties on the market, however a 2 bed apartment can come in various guises, ground floor, mid floor, penthouse, duplex, duplex penthouse, and therefore attract low prices for ground floor, and get higher until you get to penthouse duplex. How do you know what type Martin is buying?

In Duquesa, Princesa Kristina to be exact,, which is on the western most tip of the CDS,  2 bed duplexes are on the market for between €225 -  €265, in the SAME complex as my 1st property, which I paid MUCH less for 2 years ago, for the same type of property! We are talking 90sqm build with 45sqm total terrace, and they ARE attracting those sort of prices, the will of course sell for less, by how much is anybody’s guess, but certainly not 50% less!!!

PS. Purchasing a property is EXACTLY like a train journey. At what point you get on the train, is up to you, however different stations will charge different prices for the same destination. Sometimes you can get on further down the line, and not have the same 'discount' you got further up the line! (and that IS fact)

This message was last edited by TechNoApe on 6/14/2008.

This message was last edited by TechNoApe on 6/14/2008.

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This sort of bickering is ultimately self defeating and is not what this forum is all about.

TJ,

If I have upset you in what I said, then I apologise.

However, you did upset not just myself, but many others in this forum. for saying that we had a 'vested' interest, when LIKE YOU, we are ALL trying to help.

Martin, my advice, for what it is worth, I know the development you are buying into, and I think you will ber very happy for years to come with your purchase.

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just to clear up a point of confusion, when i stated that you can get a 2 bed apartment here for 90k i was stating that prices have RISEN to that figure not fallen by 50% TO that figure,which in essence keeps the prices at approximately 5 times the local earning power allowing the economy to function correctly.
My knopwledge of the CDS is limited and from my position on the CB prices do seem over inflated slightly there but people will pay for the area.

In the past i have sold a 2 bed 1 bath beach apartment in Guardamar for 265k,so people will pay for the location.

TJ- your argument with rental against buying only works when you get silly prices,in this area rent can be more than the actual price of the mortgage,my only gripe with rental is that i don't like paying somebody's mortgage for them.

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I'm trying to follow this thread but it appears that's somethings been removed, who's bickering?

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Technoape

Fair enough, you make soem good points and I accept that I'm heavy handed. I feel great compassion for those that have had and are having their lives ruined by this property bubble in Spain. I think its unfortunately fair to say that for every person that has had a good experience there are a couple that have had or are having a nightmare. There simply would not be all the desperate resales on the market if this was not true.

Sadly there is a lot of vested interest on this board, but I'm not going to point the finger at anyone in particular. Infact the few people that I have had chats with as regulars on this board have been very p[leasant and welcoming even when I have had quite controversial views. Its good that we can share views of a differing nature and sometimes agree to differ. I also apologise for getting Georgia's sex wrong

You are quite correct in saying that the term apartment is no indication of its value and depends upon a lot of things of which I have no knowledge. It does however seem like an awful lot of money and presumably given the FX difference between now and 05 its got a fair bit more expensive. However I would still be confident in my guess that it will lose value dramatically over the next few years. 

One thing I do know a fair deal about and that is economics and markets in general. We are heading for a Japan type depression which is going to wreak havoc with asset prices be that property stocks or bonds. Inflation is going to run out of control and the only eventual solution will be to do what Volker was forced to do in teh US in the 1980's and move interest rates to 20% to flush out all the debt and speculation. If you think that sounds a bit drastic then you need to read a bit of history. The debt crisis we are entaering is a lot worse than the 80's. Altho Japan is a tiny island and very very crowded, property values have yet to recover 25 yrs on.

It won't take much imagination to wonder what people with mortgages will feel like when rates go to high double digits or to imagine what this is going to do to prices. Once inflation gets out of control history shows that this is the only solution.

Anyway I too aplogise if I have offended you, don't worry on my behalf I'm not too easy to offend. If prices go up in Spain thats fine with me, I just don't see it as very likely. I would appreciate an update from Rixxy as to how things are developing and how she sees things going forward. Atleast I know she is a she lol

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after reading this thread i have to agree with TJ, there is a masiive difference now to the early 90s in that property prices to what wages were then was still small when the bubble burst, now prices are simply out of reach to people who are not on the ladder already ie 1st time buyers etc and i can only see very worrying times ahead for all over the world not only Spain, its fasten yourself in time and hold on to the edge as bubble is well and truly about to burst again and i dont know if well see price rises in property for a long time to come

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the most negative report to date warns that the crisis may last seven years and that prices may fall 20-30% in spain
soitu.es, tuesday 10 jun 08
	consulting company r.r. de acuña & asociados has prepared the most pessimistic report to date on the real estate sector. it warns of a "process of contraction" lasting between seven and eight years, huge losses for real estate companies, a reduction of 49% and 66% in housing construction for 2008 and 2009, of a real price fall of 20-30%, a negative gnp for spain in 2009 and an unemployment rate of almost 12% for the next financial year

Most negative report? 20-30% price drops. Someone hasn't been following this forum!!

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I get busy and miss all the fun!

TJ - I just checked...and yup....female!!

Interesting posts but nothing has changed a lot - not much to report expect there are a ferw people out there looking but they are wary of overpaying and that stops them placing an offer unless its quite a daft one.

The Spanish are out looking, my colleague is out all day showing and if its a deal its snapped up quickly - as an example a small complex of townhouses on the beach just past San Pedro - next to Costalita. 15 yr old urb with well apportioned houses. Private gardens and integrated garages. The 3 bedders are sized 235 sqm utilized, 3 bed 3 bath. Need some updating and they sold for 205,000 euros very quickly.

2 beds same design but 180sqm built for 200k, and a i bed 2 bath that can have the garage converted to make a 2 bed is on at 180k. Direct access to the lovely beach as well and low community fees.

When prices get this good then they sell - to all natinalities, but the valuations from the banks as they are are much higher. The 2 bed valued at 335,000 euros - sold at 170,000!

Many having to sell and I agree this will be a very long cycle but there are people who want to buy and will buy as they want it now.

Luckily!!!

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Hello everyone this is my first time on this forum. I am currently in the process of buying a property on Mijas costa, its 3 bed and in excess of 200,000 euro. It is on a development that is still selling new build for over 300,000 euro so seems like a good deal. What are your thoughts? Should i buy now or wait?

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Depends what it is, where it is and the size location etc. Hard to tell from your posting.

Are they actually selling at 300k or are they asking 300k - big difference.

BTW welcome to EOS

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Thanks for the update Rixxy, glad your still the same sex

The problems never seem to end, but its seems inflation is now the markets biggest concern. The problem is that the US is now so weak it needs lower rates still, but global inflation is preventing it from further easing. The ECB's stance of higher rates to come is putting severe strain on relations as it worsens the US's already prcarious situation. The ECB however is not without problems, its apparent thatits now a very much two speed block, with the club med countries suffering and likely to get worse as rate hikes weaken an already damaged houseing market that has kept these economies afloat.

My guess is one of more Club med countries will be forced to leave the union as theri economies crumble under higher rates and riseing unemployment.

Morgan Stanley warns of 'catastrophic event' as ECB fights Federal Reserve

By Ambrose Evans-Pritchard, International Business Editor

 

The clash between the European Central Bank and the US Federal Reserve over monetary strategy is causing serious strains in the global financial system and could lead to a replay of Europe's exchange rate crisis in the 1990s, a team of bankers has warned.

"We see striking similarities between the transatlantic tensions that built up in the early 1990s and those that are accumulating again today. The outcome of the 1992 deadlock was a major currency crisis and a recession in Europe," said a report by Morgan Stanley's European experts.

	Jean-Claude Trichet is taking a hard line on rates

Just as then, Washington has slashed rates to bail out the banks and prevent an economic hard-landing, while Frankfurt has stuck to its hawkish line - ignoring angry protests from politicians and squeals of pain from Europe's export industry.

Indeed, the ECB has let the de facto interest rate - Euribor - rise by over 100 basis points since the credit crisis began.

Just as then, the dollar has plummeted far enough to cause worldwide alarm. In August 1992 it fell to 1.35 against the Deutsche Mark: this time it has fallen even further to the equivalent of 1.25. It is potentially worse for Europe this time because the yen and yuan have also fallen to near record lows. So has sterling.

  Morgan Stanley doubts that Europe's monetary union will break up under pressure, but it warns that corked pressures will have to find release one way or another. This will most likely occur through property slumps and banking purges in the vulnerable countries of the Club Med region and the euro-satellite states of Eastern Europe."The tensions will not disappear into thin air. They will find fault lines on the periphery of Europe. Painful macro adjustments are likely to take place. Pegs to the euro could be questioned," said the report, written by Eric Chaney, Carlos Caceres, and Pasquale Diana.The point of maximum stress could occur in coming months if the ECB carries out the threat this month by Jean-Claude Trichet to raise rates. It will be worse yet - for Europe - if the Fed backs away from expected tightening. "This could trigger another 'catastrophic' event," warned Morgan Stanley.

The markets have priced in two US rates rises later this year following a series of "hawkish" comments by Fed chief Ben Bernanke and other US officials, but this may have been a misjudgment.

An article in the Washington Post by veteran columnist Robert Novak suggested that Mr Bernanke is concerned that runaway oil costs will cause a slump in growth, viewing inflation as the lesser threat. He is irked by the ECB's talk of further monetary tightening at such a dangerous juncture.

	Ben Bernanke is reported to be irked by the ECB's approach

The contrasting approaches in Washington and Frankfurt make some sense. America's flexible structure allows it to adjust quickly to shocks. Europe's more rigid system leaves it with "sticky" prices that take longer to fall back as growth slows.

Morgan Stanley says the current account deficits of Spain (10.5pc of GDP), Portugal (10.5pc), and Greece (14pc) would never have been able to reach such extreme levels before the launch of the euro.

EMU has shielded them from punishment by the markets, but this has allowed them to store up serious trouble. By contrast, Germany now has a huge surplus of 7.7pc of GDP.

The imbalances appear to be getting worse. The latest food and oil spike has pushed eurozone inflation to a record 3.7pc, with big variations by country. Spanish inflation is rising at 4.7pc even though the country is now in the grip of a full-blown property crash. It is still falling further behind Germany. The squeeze required to claw back lost competitiveness will be "politically unpalatable".

Morgan Stanley said the biggest risk lies in the arc of countries from the Baltics to the Black Sea where credit growth has been roaring at 40pc to 50pc a year. Current account deficits have reached 23pc of GDP in Latvia, and 22pc in Bulgaria. In Hungary and Romania, over 55pc of household debt is in euros or Swiss francs.

Swedish, Austrian, Greek and Italian banks have provided much of the funding for the credit booms. A crunch is looming in 2009 when a wave of maturities fall due. "Could the funding dry up? We think it could," said the bank.

This message was last edited by TJ222 on 6/17/2008.

This message was last edited by TJ222 on 6/17/2008.

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John

Welcome to EOS. My advice for what is worth is to hold fire and use time to do some more research. Property cycles last 10 yrs typically, so once houseing starts to head down, its not going to turn up anytime soon. There is alot more pain to come as developers and owners stuck with property become more desperate paying finance on property they can't shift. On the down cycle prices tend to gather speed so that most bargains will come towards the end, just as property posted the best gains jsut before the top.

There is so much spare inventory you as a buyer never need to feel under pressure. Make incredible low ball offers and just walk away, there is always 100 thousand more going spare. Now is the time to turn the tables, during the last decade sellers held all the cards and were able to mercilessly hold out for higher and higher prices. Buyers had to like it or lump it. Now is the time to grab a real bargin if you must buy, which incidently I would not advise currently.

The western world is walking into a 1930 style depression, with riseing inflation for real goods and services and a possible oil shock in 2009. Once inflation gets a hold its nigh on impossible to stop, the remedy is unpleasant - a return to high double digit interest rates.

Imagine what your bargain property will be worth when interest rates are 18% or more, the flood of property for sale will make the current sales look like a trikle. Could you afford the finance at 18%?

Look bacvk in history and see how the last great inflation was cured. Trust me now is the time to have savings, not debt, that era has passed.

Take your time, the reason the hard pro's that deal with Rixxy are driving such a hard bargain, is that they have been here before, they can see what is coming and what to pay accordingly.

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