Buy a property?

Hello,

I wonder if with the financial crises it's adviceable to buy a propert in Spain.
Do I have to wait? Or are the houses now at the cheapest?

Thanks

Piet

vakantiereizenspanje dot nl

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Hi Piet - that is the question everyone wants the answer to!  If anyone knew for sure when the market has reached it's lowest point then they would make a fortune!

However, I know that our agency has reduced many prices and there are some wonderful bargain properties around.  The market may continue to fall but many properties are so low now that I can't see them going much lower.  

My advice would be to have a good look at the current prices and decide if the time is right for you.  Decide on what you want from the property - holiday, permanent home etc, - and where you want it - near the beach, golf, out in the country, near bars and restaurants etc.  If you need to borrow, I would check that you can obtain the finance.

Hope that helps.

 

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Piet
I think the advice given by Claire is right

You can never hit the bottom of any market unless you are lucky and you only know you have retrospectivley !

If you can afford to buy now then it is worth looking and seeing what you will get for your money
Then you have to balance the enjoyment you are going to get over the next few years with the economic prospects and your own financial situation

The general opinion is that EU, not just Spain, will not start to get back to more normal volumes of sales until mid to late 2010
Some do say mid to late 2009 and lot will depend on interest rates

There is talk of UK rates coming down to 1% or 2% over the next year....some say bring it down asap! and EU rates will follow

If this happens then the ability to buy gets easier for people and then they start to buy
The demand for properties on the Spanish Costas medium to long term will continue to increase [ according to all surveys] but the ' effective demand' [ people who can afford to buy] at any given time  depends on the economic situation in their home country

And Spanish demand is subject to the same economic forces     

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For British buyers only people with cash up front will buy during the next 3 years.

Next year 2009 will see a huge economical crash in the UK and a  crash in Europe much more than any lay person now can anticipate. The pound will drop freefall due to the tax input from Brown and the interest rate drop. There will be massive unemployment .

The rental market in Spain will be very low for the next 3 years at least therefore Return on investment  will be 0 or minus. Many Brits and most Europeans will not go on holiday abroad never mind rent holiday homes in Spain.

The prices of properties because of the crash including crash in Spain (so Brits and Spanish buyers involved = 90% of all buyers) will drop even further.

Therefore because of the negative inflation which will occur nobody will will want to buy until rock bottom time (estimate 2/3 years from now)

Call this gloom i call it reality i follow the economists in the know who have proved the politicians until now that they were wrong, the politicians are trying to keep everyone calm but they know that the doom scenario is on the way, remember this space in Nov 2009!!!!!

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So Sherry the economic world is now coming to it's end!!

Yes recession and further problems to come during 2009 but the general opinion is that the EU economies will start to move again in 2010 and that means the property market

Will the £ drop to 1€...who knows but it will be tempory and again the general opinion seems to be that it will be around 1.32 this time next year

Naturally these are only economic views but are the realistic ones

My experience extends back to the 70's and I can tell you that it was much worse-then we had interest rates of 15% and inflation of 27% plus the 3 day working week....yes in our houses and work places the electric was only on for a few hours a day!

The economy was less flexible due to restrictive practices and and the stock market went even lower in real terms than today

Yet we lived and worked  through it and the recovery came and was followed by increased standard of living for everyone

It seems to me from experience that these recessions area a check and after each one  the economic life and standardf of living moves a step forward to a higher level than before the recession started

You can be all doom and gloom if you want but perhaps even you know that more good times are ahead ...it's just a matter of when

For those of us in our 60's time moves on quickly and it is the time to enjoy it while you can and before you get too old

So if your life style choice is to spend time in Spain, then you can miss out on a lot of good times if you delay finding a property, just because it may not increase in value every year!

Exploit the current market and find the life style home at a goog discount on historic asking prices. OK the overall market value figures may show a drop over the next 12 months but if you are enjoying your life does it matter......all the economic history shows that medium to long term you will be OK ......and if it does concern you then you will probably be able to look back say in 2013 and see that you made a good buy

Clearly only buy what you can afford 

Now for those who want or have to sell: If you are going to bring your money back to UK the 'lucky you' as you get a lot more for your €

But you have to find a buyer:-presentation of your property for sale is important but make sure that the asking price is realistic If you wanted to ask  £150,000 for your property mid 2007 then you can reduce the € asking price by 20% and still end up with the same back in UK!

When you get a sale you will then be able to exploit the UK market which is as bad as that in Spain! 

Not a lot of buyers about but that applies in UK and the rest of the world at present but they will come back  

If you do not need to sell then no doubt you will do what everyone else is doing......sit tight until it improves

 

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I´m in full agreement with Sherry24 on this.

10 days ago the GBP was worth €1.29 - this week it has been around €1.18. That has made Spanish property prices increase by almost 10% to a UK buyer.

Most of the money people are predicting the Euro going into free-fall by the Spring of 2009. One Bloomberg analyst suggested the Euro could fall so low as to bring about an exchange rate of GBP= €1.77!!.  Many other analysts are quoting more realistic rates of between €1.47 - €1.65.

As Sherry says, before next Spring the GBP with become weaker as the UK economy really does tumble.

So my take is, why not wait until next Spring, not only will Spanish property prices have fallen further, but, by then the Euro could be very weak.  I´m sure that is when we will see real bargains that will be even greater with a weak Euro.

Just my take folks.

Gillespie.

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the good news is the boom is over so it means you can take you time buying a place. Regardless of where prices will go there is one caveat that always applies. Property is about location location and location. So take you time search around put in a few low ball offers and see what comes out.

This applies more to Madrid than the coast the longer the person has owned the property (the key being pre 2000) the more room they have to negotiate the price. Secondly the longer the property has been on the market the more willing the sellers are to accept a lower price.

Unfortunately the one thing you can't predict is the exchange rate. If you budget is based on a strong pound and a weak Euro than don't buy.

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Hi Brian,

 

i agree with some points you mention and i was one of those with candles burning  in the 1970,s lucklily we had slade and john lennon etc to keep the uk spirits high at that time but most people did not know what a credit card was and i don,t know any of my family who had any debt then in fact the total opposite, now the members of family who are alive all have credit cards and huge motgages and the nice car with 3 holidays per year is much more important now than in the 70,s so we have a higher standard of living expectation, watch if this bursts then it will  be just like the candle days.

I was just giving a reality check which the economists in the know are stating (not the ones who are wanting to gain out of house buying or politicians) because the situation now is different more like back to the 30,s than 70,s.

Whilst it is a different situation regarding modernisation etc there are more complications in todays life to counter that. The reality is as a couple of reactions suggest is that buyers should wait  until they buy any property anywhere (look at Dubai, Turkey, Florida etc all going downhill) therefore unless you have cash in hand which is what i mentioned it would be gambling at the highest level to buy property to let or as an investment. I suggest wait until Jan 2010, save your money in high interest savings and see what has happened over the next year and then come back to this forum site, those who buy now or in the coming months may wish they had taken this advice. Gordon Brown is not for nothing pumping billions into the British economy tomorrow i just heard him speak and he never quite admits the "crisis" word because yes he is a politician just like real estate agents are.

 

 

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Hi to you all,

On a positive note interests rates have come down , petrol has come down, food prices have come down and shops are having sales.

Now I know there are some aspects that are bad but there is a flip side and for those of us on Uk tracker mortgages the change in interst rates has put more money in our pockets and we are spending less on petrol etc. I hate to admit it but I have more not less disposable income now.

The world is a complicated place but so is life.

All the best

Tony

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If the experts were actually experts then this could all have been prevented...it wasn't and they are not!

This is like a rollercoaster...none of us have any idea who is goign to vomit...we all just get herded like sheep and get on....just like the property boom...everyone got on. The Banks the politicians and all of us as we were niaive to believe that prices would not go down. Well they have...there are people vomiting everywhere and the policiticans view is throw money at it all and tax the living bejeesus out of us later

I particularly like the comment from Sherry "because yes he is a politician just like real estate agents are"

The bottom line is ... don't listen to any valuation....look at the market in your area...make a decision based on what you think a house is worth...to you...you never know...the sellers just might accept. This is a good time to buy...at the right price...

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Ref the experts this is the whole issue there were economists who did state that there would be a bad crisis and that politicians were too slow taking action, there are plenty of books written by English/US/Dutch commentators but of course they were laughed at and which politician is going to promote their advice lets be honest, what i say is take more notice of the people in the know not politicians they just want votes.

vat 15% what a joke so everyone can buy even more useless ipods or pairs of socks for xmas and actually add more to their credit cards so that when the taxes are increased in 2 years time and these people have been unemployed 1 year they feel like drinking even more alcohol,

About the market for buyers wanting to live permanently a note:  Look at the amount of pot bellied tracksuited families arriving at alicante airport 3 times a year, probably earn 20,000 a year but they just received some money because granny left her house or their council house has increased threefold in value since the Thatcher years and they are looking for a cheap appartment in Spain.  I tried to get a spanish meal recently in Murcia but the only food available was steak and kidney pie fish and chips, and everything with peas or baked beans followed by huge washings of beer.

The most British people living in the towns of Spain permanently or for several months per year look more unhealthy than the average person living in Bradford and that says something.

They look as if they are totally lost, after playing endless games of golf, the only thing to do is eat/drink read English newspapers, watch football in spanish bars with other Brits and lie in the sun getting red as a lobster so they can fit into the Spanish culture even less than when they arrive

Twice i was in a bar in Spain just having a quiet drink and was threatened by yes you guess it Brits and their age was about 45-50.

My advice to anyone buying in Spain buy an appartment in the mountains in the North of the country in the middle of nowhere in some small authentic village good investment and you can get real Spanish food

 

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110% agree with you Sherry...whats the point of moving if you don't try integrate into society...having children its a little easier and we have some friends who are now starting to include us in the things they do....the concept is not to bring the little bit of where you are from to Spain, be it the NL, UK or Germany...soak up what you can find...sit in the corner of a spanish bar, listen to the conversations and watch spanish TV...buy a spanish newspaper and read about national items of interest. Go the loca Ayntamiento register for Spanish lessons..go to the fiestas and open up your views....

There are lots of people who just play golf...mix with the expats...not saying its an issue...but there is so much more out there to expand your mind and experience

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Thanks for that i thought i was the only one who thinks this i am expecting rough replies but of course not everyones like that so my apologies if it seems that way!!

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Sherry24,

You could be right about the UK falling into a huge recession, you could also be wrong.

UK house prices falling, I don't know how as 'For Sale' signs are now an endangered specie, and if you do sell at a discount you also buy at a discount.

The UK has 1 million homes too few, Spain has 1 million too many.

Redundencies, well the public sector will expand during a recession, the building industry will get back on track as soon as the banks start lending money. The banks will face making people redundant, but as they got us into this mess in the first place I have little sympathy. The retail sector will have to be careful, we will probably see some household names dissapear. However shopping habits had been changing before the recession, my wife buys a lot of her clothes at Sainsbury along with many other people, they also sell tv's, computers, hi fi's and white goods.

The pound and the euro on parity, never, its more of a case of who will be the first to bail out of euro land. The pound IMHO will strengthen against the euro while it continues to weaken against the dollar. Spain will be in a full blown recession long after the UK has come out of theirs because it is doing something about it, unlike Spain where they are still in denial.

We were about to take over the mortgage of a completed off plan property, it was 33,000 euros less than the purchase price and 93,000 euros less than the later phases top prices. The development is lovely but a little research shows that the indoor pool/spa and gym will never be completed, practically every unit is for sale as new or re sale. We are gambling on finding one later next year at half the the actual off plan purchase price, we would then be in a position to throw in our contribution towards completing the facilities. 

We have seen recession's before but this time we have very little debt, no kids (I am joking, when our 29 year old son was born and the midwife cut the umbilical cord it wafted around for a while before securing itself onto my wallet, where its been ever since) and enough money to see us through it.

Don't worry, Mr Brown will see us through it, bloody heck I am worried now.

 

  

  

 

 

 

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You sound like a person who does his research and I hope I am not trying to teach you to suck eggs [ as they say!]

But if the development you like very much does not have finished facilities, then to buy in anticipation of getting all the owners to contribute to finishing them is a risky business and may prove very difficult 

However you may consider that the low price you will pay will reflect these problems...but not many people will be advised to buy into this sort of situation.........his may affect any future sale if in the end facilities are not completed

Re mortgages may be difficult but this clearly will depend on the existing state of the facilities

And at a time in the property cycle, when you can buy at a very good price into a development where facilities are completed and few for sale , it may be a risk you do not have to take to get a good deal

Anyway, I do not know the full details and if you decide to proceed good luck 

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I agree with Brian totally on this and would add that if you do buy off plan get a bank guarantee and check the sales contract for delivery dates etc.

on the economy Britain should take a look at the Netherlands:

For example,  no panic, still very low unemployment, 20% of women have a credit card compared to 70% of British woman, most people therefore have saved over many years so have backup, social seciurity you get 70% last wage if you lose your job and any companies laying off staff at this moment can send these employees into this scheme until the crisis gets better (no VAT cut for xmas hampers) hospitals look like shopping malls, sports facilities in every viillage there is a floodlit football and tennis pitch for local people subsidised buy local government, today in press voted most content people in Europe even at this moment. (and yes the dutch actually have less drugs problem than the UK because just like sex they do not hide from the fact that it exists.

Reason:  They are conservative with money, do everything themselves (don,t hire people very much for odd jobs),are well organised, look after their houses and don,t worship the car and appreciate the family and children.

Money is for them structural and not a lust object (in general there are exceptions)  Taxes may be higher but the structure is safer when things go wrong there is no disaster.

Looking at the Germans, Belgium, Scandinavia yes there are credit crisis probs but i firmly believe that Britain is entering pay back time and most people will not buy abroad due to financial reasons.(which is the topic)

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Thanks for that rowlandsbb,

You are right of course, but this is a very strange one, my mate has a villa 5 minutes walk away from this development of 82 luxury (and I mean luxury) apartments. We have seen it from the start of the ground works to its now nearly completed state, all the apartments are completed, the outdoor pools are up and running and the common parts are first class.

But the place is devoid of human life other than the reception staff and a pool man/gardener, a lot of the apartments are unfurnished. It is set up on an Aparthotel basis but I have looked into costs and restrictions and the pros outweigh the cons. It was originally advertised as having a shop, hairdresser, medical center, restaurant, pool bar and indoor pool/spa with gym. There appears to be a total deficiency in respect to the first three, the following two were complete but closed and the indoor facilities have the main building completed but just with the pool shape in concrete and first fix plumbing and plastering.

This development won the Daily Telegraph award as the best development of 2006 (I think) and with a few quid thrown at it it would live up to the award. Why are there no people there though? It doesn't make any sense, you will have to take my word for it, IMHO this is the finest development that I have seen, it's in the best possible position and has magnificent sea views. There are only 4 permanent residents, I found out that one guy had bought 4 off plan to sell on and was trying to get his money back by selling at cost plus taxes etc, perhaps everyone other than the 4 residents were in it for a quick buck and have got their fingers burnt. The people who bought to put their apartments into the letting pool will only receive 25% of the gross rent after charges and taxes, had they left their brains at home when they signed on the dotted line?

All that I can do is to keep an eye on proceedings, we don't want to rent out so the abysmal rent is not an issue so long as we don't want to sell, buying is hard enough, we want something for keeps, we are in our early 60's and know what we can handle. The lack of the retail outlets don't worry us but the heated indoor pool deficiency does, we don't fancy swimming in the outdoor pools in winter. The agent is never off the phone to me so I don't think he's got a queue for the property, IMHO the waiting game is the only game to play.

 

 

This message was last edited by crookesey on 11/24/2008.

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Are you saying that it is an Aparthotel development which has failed?

Aparthotel developments set up, sales marketing and the design [ like hotels suites] are different to 'apartments' and buyers often tend to be investors instead of people buying to use as a holiday or full time home

May be the reason why most are vacant and now for sale due to failure of the Aparthotel [ possibly  could not get a major hotel operator to run it, which normally happens]

Anyway seems interesting and good luck to you

I'm in my 60's but have taken a more conservative route for a home in the sun[ part time living to start with] ....also cheaper by going to Almeria , between Aguilas and Mojacar

Again good luck

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Crookesey

I know someone who may be interested in an Aparthotel- I know the one you are interested in is in a mess but can you let me know the location and agent dealing with the sales

PM me and I will give you my direct e-mail or send me an e-mail via my web site.....As you would expect my marketing policy allows for rewarding  productive introductions!!

Brian

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