What really is the current state of the Spanish market?

Georgia you wrote

"With some of the prices slipping back 5 years we could see a mini revival especially with the legal sysytem finally getting it's act together."

I would be interested to know what evidence you have to suggest that the legal system is getting it's act together.............

Thanks Advisor.

I want to start my european export recently,

spanish market is my first step, so I think this could help me a lot.

-------thanks from savepurs.

The Spanish property market is very similar to our own just now.....lots of over supply for certain types of properties such as apartments , low level of transactions and for some , those properties which are at a bargain price are often  not the ones you want to buy!

Owners who do not have to sell are sitting tight so a lot of really good properties are just not for sale at the current price levels- developers who do not have to sell are just cutting back until times improve

There are some good deals from developers with circa 25% reductions in asking [!] prices compared with original and if you are wanting a nice holiday home with facilities now may perhaps be the time to start looking...Polaris World have some good offers and re sales asking prices from circa 87.500€

The best deals are probaly the distressed sales....a recent example was a 2 bed duplex in Palomares bought for 185.000 € several years ago, the price to sell was 130.000€ to clear mortgage..others similar...but you have to look hard to find the good ones

The prices stated for owner direct sales tend to be set too high and not reflect the market...most agents today will only take on a property if the price is realistic but some owners are still living in the past!

When will it improve?

I think the Uk market looks like improving late 2009 but we have a general election to get out of the way before confidence improves so that means mid to late 2010 before we see a return to a more active market...even though it has not been as cheap to buy for a long time and interest rates should be low for some time

UK buyers are an important part of the second home market in Spain so that means UK buyers will be slack until late 2010 but an exchange rate improvement may quicken this ,as there is certainly a pent up demand for buying in Spain ,just waiting for this to happen

Spain will continue to be very attractive for northern europeans for well known reasons but with it's large over supply I suspect prices will remain level for a couple of years....say Q1 2011 to get back to a more normal market ,and those developments which are currently being mothballed re started

I think the above is a pretty standard view of the situation...if you want to and can afford to buy now then you should be OK medium term.......may not be buying at the bottom but at least close......and if in the right location via the right people then it should turn out a good investment......although to  life style buyers investment returns are not always as important as the enjoyment they will get out of their purchase !

Planning and legal sitaution is now well regulated but as always you need good independant advice.....adopt the same attitude as you would buying in UK

So if you want to buy...no reason not go to Spain and have a look!

We plan on moving to Spain but like many due to the housing market in the UK and the price of the euro we are sadly having to wait. We are hoping its picked up in 2010 so we can move then, along with some friends and their families.

Wise to wait for the £ > € rate to improve and the bets seem to indicate 1.25 this year...may be a while before it gets close to 1.40 +

You have to balance the exchange rate with the potential to make a good buy.....and of course selling in UK at the current market value......and of course life style

The fact is that if you are selective,and the rate goes to 1.25, then 2009 may be OK..I would suggest that if you start looking circa Sept 2009 you may ' just' be getting the balance right

Just my view......no one can call the bottom of one market [ Spain] and the upturn of another [ UK].....but it does look as though on ' supply & demand' [ basic economics] that the UK will ' upturn' before Spain starts to move

In UK there is a shortage of ' stock on the market' for the popular types of houses'....

Maybe a time to start looking.....if you find waht you want.....everyone is flexible in Spain on timimg!  

Many Thanks,

The main problem for us is the UK market, there are tiny signs of this picking up Im seeing more sold signs in our area so Im living in hope that this time next year mine too will have a sold sign.

Don't want to be a doom-monger, and I know there are two sides to every argument, but I just came across this article today, which makes some pretty logical points, albeit rather depressing if you're trying to sell a UK property.

Roberto

not doom and gloom simply fact, bearing in mind that most lenders are now either government owned or are being very careful just in case they need a bail out, they are all singing of the same hymn sheet.

Redundancies in mass still ongoing, GM going in the usa will have an impact over here due ot their mortgage side, LTSB making a further 500 redundancies, all these people have mortgages and will be ok whilst they have their redundancy monies to hand but getting another job in the same industry......unlikely

Me thinks 12 -18 months before anything picks up

I put my house on the market yesterday and was very pleasantly suprised at what the agent suggested i price it at.  I know this is not the same as selling my house but i did do a price comparison on Right move and was again pleasantly suprised by the number of sold properties similar to mine ( in fact there were more sold than available for sale ).

The Estate Agent echoed what i had heard on the news and read on the websites in that he has a shortage of property available for sale.  I actually choose the agent as he has a large number of sold boards around my immediate area.

So fingers crossed the 'For Sale' board should not be around too long.  Then goodbye UK hello Espania

TP

also use www.nethouseprice.co.uk to gain an idea of actual sold prices, the biggest problem is likly to be the mortgage valuation which are coming in extremely low

Just had a quote for bring €s back to UK this week at 1.1598 and the general expectation is that the £ will move into the 1.16-1.21 range over the next cycle

Which is some improvement over the last 5 months when it has been 1.02-1.15

The UK market is suffering from low stocks of good and popular properties.....not for example 2 bed city flats where in most cities outside London there is a massive  over supply!!

So if you can get a good sale now in  UK, the prices in Spain remain depressed [ as they will for the rest of 2009 at least]  and the exchange rate improves as expected, then it is starting to look positive for those who want to buy now for life style reasons 

and of course the 'life style' reasons have not changed...!! 

advisor

Thank you for that site - that's a brilliant site for spying on your neighbours  ... just spent last ten minutes going OMG they paid how much in 2007/2008 !

Wish i had sold back then but Que Sera Sera

At least i am not in negative equity like some poor people and at least I have not got one of the many oversupplied two bed city centre apartments like Rowlandsbb points out.

I really do believe that now is a very good time to cash in on your UK property and take advantage of the supressed Spanish market if you wish to make a lifestyle change.  Thats my plan anywayz .    Fortunately (or unfortunately!!!) I will be retiring and I am glad that I do not have to rely on getting a Spanish job as that would be a whole new bull game!
 

TP1

if i were selling in the UK today I would

a) get a private survey done by a rics registered surveyor, cost woul dbe circa £2-250 for a basic deal anything else not needed unless your property is listed/thatched/weird and winderful!

b) this will show what a mortgage lender survey is likely to be as currently many deals are being blown out of the water due to low valuations and currently most of these are "free" meaning the potential purchaser doesnt even get to see it or the comparables used in it

good luck

I guess it all depends on what type of property and where. From the comments of TP1 and Rowland, one would have to assume that Milton Keynes and Macclesfield are OK. Here's another interesting website to see what's going on in your area: http://www.propertysnake.co.uk/  You can find out exactly how long individual properties have been on the market, and how much the price has been reduced - with still no sale to date! Paints a slightly different picture, if you ask me.

The Spanish property market is depressed, yes. I'm seeing (some) prices here in Torremolinos perhaps 30% lower than this time last year - but even so, for the price of a studio here, I could probably buy a 3 bed semi in Macclesfield. Where's the better value?

3 bed  small semi  near me in Macclesfield  fully modernised built circa 1940 is  £250,000 [ circa 289.950 € at todays rate] but there are some cheaper older ones

Here as it turns out in the Macclesfield area, the average house price is one of the highest in the country.....not unusual for a house in the area to be bought for £1.5 m and knocked down for  a re build...!!..

Whilst I do think Spain is a good long term investment, for life style buyers where the investment  increase in real capital values is not the prime motivation...UK is hard to beat £ for € in the best locations overall...even city for city

Life style Spain is ...the best!!

I suspect you do not know Macclesfield !!...touch different around here although we are in a downturn.

Couldn't even point to it on a map - although I almost certainly was there once, in a previous life.

Hi All. There's been some really interesting posts in this thread and it makes facinating reading. What I find particularly interesting is that although this started out as a question about the state of the Spanish market, it now seems to have shifted round and everyone is discussing the state of the UK market. This is an indication of just how reliant the Spanish market is on the UK housing market and wider economy. While we are all struggling to sell our properties here and worrying about whether we are still going to have a job in six months time, we are not going to commit to buying in Spain.

Thus, the UK economy must improve and property prices/sales get back to some sort of normality before the Spanish market will start to see British buyers in any sort of number again. The first signs might be there that we have reached the bottom but it is going to be a good few months yet before we can be certain that things are on an upward path, however slight.

Spain has its own problems that are significantly worse than the UK and latest opinion seems to suggest that Spain has another 12 to 18 months in recession. Only today I read that BBVA, Spain's second biggest bank, has said that property prices in Spain will fall by 10% this year and 12% next year. And it gets worse, I quote: "In a new report on European property markets the American bank Citigroup says that it is “only a matter of time” before price falls of between 20% and 30% hit Spain, begging the question ‘but haven’t they already fallen by that much?’ Citigroup expects the European property market slump to last 5 to 6 years, and to hit Spain harder than most, thanks to excesses of Spain’s boom."

Spain has clearly still got a long way to go before things start to improve there and in fact things are likely to get worse before they get better. House prices are likely to keep falling for the next 2 years and the recession there is likely to be deeper and longer lasting than in the UK. At the beginning of this year I said I would consider buying in Spain in Q4 of this year. Now I am putting that back and will probably not be buying before Q2 or Q3 NEXT year at the earliest.

".....everyone is discussing the state of the UK market. This is an indication of just how reliant the Spanish market is on the UK housing market"

In the context of a British forum about Spain, it's inevitable that comparisons will be made.

There's no question that the Costas and other areas where foreigners and Spaniards alike have traditionally bought second homes are affected by economic factors elsewhere, but looking at the bigger picture, I wouldn't have thought that the state of the UK housing market has too much of a direct impact on Spains own problems, other than the fact that both countries are caught up in the same worldwide slump.

Just my thoughts on it. I would find it interesting if someone could come up with some stats (although I never trust stats) on what percentage of total property transactions in Spain in a given period were carried out by foreigners, versus those by Spaniards.

I believe factually the largest purchasers in Spain aside of the spanish are/were

germans-english-scandanavians

a few years ago the german side declined due to their own economy as is currently happening with the brits, peopel are on about the exchange rate which obviously plays a part however seem to overlook that the brits currently dont have the money to exchange!

Corrallation is simpl ein that whatever affects one european country will have a knock on effect in other european countries and less of an effect outside of europe.

whilst the base rate is extremely low in the UK lenders are now stiffing the public with the fact tha tunless one has 60% loan to value the rates are on average 3.5% above base rate-so the banks which got us into the mess in the first place due to lending of up to 125% of the value (n rock) are now penalising us and making more % profit than at any other time in their history.

Commerical lending is a dead duck with the average loan to value being approvied of only 50% ltv-meaning there is no stimulus on the market as if the commericals arent happening  then work is not filtering down to the man in the street.

Not  good and likely to get worse before it gets better.