Good News Property on the up!

Dear all.

Firstly Happy New Year.

Some good news for a change, spoke to an estate agent in Calpe yesterday who I have known for a number of years and was informed that they had there busiest Month for years in December with 8 deposits taken on homes.  And the general concensus is that peolpe have started to believe that prices are at there lowest and now is a good time to buy.

Not bad eh!! just goes to prove that people will always follow there dream.

And for the doom mongers I am not selling or buying it was just a general conversation.

Ta Tony

 I can second that,there are a lot of people on the hunt at the moment.

We have just had the busiest six months for three years.....

Had to go back in from my xmas break several times to show clients property.

Mind you, when you see some of the prices at the moment you can understand why..

At last, a positive thread amidst the doom and gloom merchants.

I must agree ref the bargains on the market. There are some fantastic properties to be had at the moment. I only wish that I had a few spare Euros to spend.

I had a chat with a very good friend of mine (and an agent) this morning and he also has already completed on three properties over the past few weeks.  A record for him in a long time.

Perhaps I was right all along then....

Justin

It would be 'Great News' to hear Spains' property sales were on the move. Unfortunately I believe it is a brief 'spurt' created by vendors, desperate to sell, who have drastically reduced their asking prices.

The following webpage makes interesting reading:-

http://www.elliottwave.com/freeupdates/archives/2010/01/07/The-Coming-Housing-Crisis-in-Spain-and-What-It-Means-for-Europe.aspx

And, for followers of Spains  Economy, Edward Hughs' Blog:-

http://spaineconomy.blogspot.com/

is the best place to start. He is also on 'Facebook' and updates it almost daily.

Hi sandra,

I think that article is spot on.  I think the temporary low interest rates are probably also giving a short term boost, as in the UK, but what happens when interest rates start going back up as Germany and France recover?

I wonder if part of the reason for estate agents being busy is because around half of them have gone bust over the last few years, so it's basically less business spread around fewer estate agents... Just a thought....

sandra

steady on!, you will be called a 'gloom and doom' merchant with comments like that!   Yes, I would think that it's a mixture of some who can't hold out for a good price any longer and some who believe the hype that prices wont fall any further, so are getting in now? Thanks for links, will have a look.

Sanchez

about the agents, that would make sense. Let's hope the smaller good guys are getting a look in now?.

sandra

just read articles, and I think they just confirm what many of us thought anyway. Banks keeping prices falsely high? The cat may well not be out of the bag yet!

Talk about buying at the wrong time!! The developer of our urb is selling 2 bed properties on a similar new urb for around 60,000€ less than they were being sold on another not so new new urb. Have they cut corners to cut costs? I don't know the answer to that, but wish I was in the market for buying now, they cost less than our 1 bed did!!

There are many apartments on our urb that have been repo'd and the banks are offering 100% finance on them!! The good news is that once the banks take ownership, they pay outstanding community fees and keep up to date with them, thus those of us still here are reaping the rewards with slightly lower fees next year

Mark.

 I wouldn't overdo it with the optimism, but it should be a better year.  Even though the recovery looks "fragile" (according to the FT today) that at least ensures interest rates will stay on the floor in both the UK and the Euro area.  Besides I would think there is a lot of pent-up demand from people who have the funds to move and do not want to put their lives on hold.  What would help Costa del Property would be a jump in sterling but that seems unlikely until at least the election.

 For an alternative view on the 2010 Spanish property outlook there is this article

http://www.elliottwave.com/freeupdates/archives/2010/01/07/The-Coming-Housing-Crisis-in-Spain-and-What-It-Means-for-Europe.aspx

which repeats a prediction from BBVA that prices will fall more steeply in 2010 (12%) than they did in 2009 (9%).

What!!!

I've just read that report in the two links below (it's the same report) and all I can say about 'the world’s largest market forecasting firm'...

I personally wouldn't trust those guys to make the toast!!!

The report says that in Spain:

"Over the last year, average housing prices dropped a mere 9%."

Rubbish! They dropped much further than that!

And:

"Spanish banks are holding all the properties."

Twaddle!

Why is it people talk about things when they are miles away from ground zero. If people want to talk about Spain and the Spanish property market, then they should come here and see for themselves what things are really like.

I've lived here for over a year now and have seen things for myself... the price drops.. people desperate to sell due to high interest rates... Banks selling properties like there is no tomorrow! Now, I see a much more relaxed, stable approach and indeed have seen evidence of some minor price increases.

I think what people are missing here is the simple facts:

Fact: That there are areas in Spain with overbuilds and areas without such.

Fact: That there are various types of properties to be purchased in Spain.

Fact: That some types of properties hold their value more than others.

Given these three simple facts, some properties will de-value further, some won't and some will increase in value. Some will sell with comparative ease, some won't. However, there is much more interest in the Spanish housing market in the last quarter of 2009 and now into 2010 than there has been since the start of the World Wide recession, due to the fact the majority feel that the light is now at the end of the tunnel... a long tunnel may be... but still a light at the end now.

Yes! There is a huge glut of the standard one bed and two bed, small, can't swing a cat in it, holiday ownership, just doss for the night and out all day sort of properties, and those are the ones that will continue to lose money, as those are the type that have been massively overbuilt in a lot of areas.

And Yes! There are the huge, massive, park your yacht in the swimming pool, the mother-in-law can stay in the guest house, and you have more bathrooms than you have bedrooms type of properties. It is these that were massively overpriced and have come crashing down to earth with some as much as 60 - 70% reductions, due to some people trying to own what they couldn't afford by having a mortgage that was much higher than the actual property value in the first place.

However, there are also large, quality two and three bed, nice and roomy, oh! I could imagine living in a house like this, family sized type of properties, of which there is a huge shortage and are in increasing demand. These are the sort of properties that prices have stabilised and are starting to go up in price.

So, there you have it! Three simple facts and three simple definitions.

Oh! And Interest rates will continue to stay low for some considerable time and even when they do rise, it won't be as meteoric as in the way they fell. Don't believe me? Research yourself and read what most EU Economists, Major EU Banks and the ECB think.

.

We have noticed over the last week or so that:

1.   the local estate agents are showing lots of people around the few unsold new flats in our building;

2.   there are more workers on the nearby partially built second phase;

3.   the sales office has re-opened after being closed for 4 months. 

All positive signs that property is on the up here too!

Sue

Spanish property prices are definitely not on the up and won't be for some time to come. There's too many for sale, the Brits cannot afford to buy with current exchange rates, agents' commissions built into the price are still way too high, Spanish completion costs of 11% are way too much.

To buy for investment is to lose money, you'd need to add 20-25% to completion price just to break even, and once the Euro/Pound exchange rate goes back to something more like 1.50 euros to stg, you'd be losing even more in Stg terms if you wanted to return to UK.

Clearly, there's a lot of 'talking things up', people's livelyhoods depend on sales, and yes there are bargains if you just want to live indefinitely in Spain, but 1.5 million + unsold properties speaks volumes.

 I seem to have heard that people from Norway and Sweden are starting to buy. Infact, I know of three properties sold and viewers at another. Maybe it is just pure chance. Don't forget there are other nationalities that buy not just British. Kevin

Kevin, I have seen similar but more Spanish are buying, or at least looking.

There is definitely activity but a couple of friends who are estate agents are saying that they are getting plenty of leads but converting them is very difficult.

I think a lot of people looking at the moment maybe wondering when to jump in.

Justin

There's an interesting article in today's Sur in English (PDF version here if you want to read it) about all the unsold properties in Spain, discussing the fact that developers are not paying community fees on their unsold stock, which is something I've personally come across recently and is going to become a major problem I think. According to this article, there are over 25,000 such unsold properties in the province of Malaga alone.

Justin recently mentioned ( via a newsletter I think?) the bank's property portals. Banks are now the biggest estate agents, with a massive stock of repos, and I've had a look at some of their offers. CAM even have online bidding facilities for auction properties! The offer of Polaris World properties this week via the newsletter was interesting, too, but despite all these seemingly attractive offers, I just don't think many people feel confident enough to dip a toe in the market again just yet.

There's a massive oversupply now of rental properties (people who wanted to sell but couldn't), which makes it hard enough to rent a place out, but coupled with the fact that so many tennants are either getting behind with, or simply not paying their rent (I hear new horror stories every day), I can see more and more people deciding to cut their losses and sell for whatever they can get just to avoid the rentals nightmare - prices will surely come down more?

Scambuster,

Have you ever actually purchased a property in Spain or ever tried to do so?

I assume by your 'user name' that you have!

Quote "To buy for investment is to lose money, you'd need to add 20-25% to completion price just to break even, and once the Euro/Pound exchange rate goes back to something more like 1.50 euros to stg, you'd be losing even more in Stg terms if you wanted to return to UK.."

Having purchased two properties in Spain myself, without a hitch I might add, as I spent some considerable time conducting research into purchasing property abroad, and then spent some considerable time viewing properties before I purchased, I feel that I have a valid opinion that negates two of your points...

1) you'd need to add 20-25% to completion price just to break even.

Why?

As completion costs are between 12-14% dependant on purchase type.

2)  and once the Euro/Pound exchange rate goes back to something more like 1.50 euros to stg, you'd be losing even more in Stg terms if you wanted to return to UK.

Impossible!

It is deemed by financial experts around the world, that the exchange rate between the Euro and Sterling is to reach its highest level at around 1.20 to 1.30 during the next five to ten years, and that Sterling will more than likely never reach much above 1.35€ to the £1.00 in the foreseeable future, due to the UK Government allowing Sterling to devalue at the rate in which it did.

Why did the UK Government allow Sterling to devalue at such a rate? In order to allow exports to flourish during an economic crisis!

Why did they do such? In order to artificially expedite an artificial economic recovery. 

I can see where he is coming from , Technoape. If you buy a property for100,000e + 12% costs =112,000e.@ todays rate = 101,818 pounds. If the pound does revert to 1,50 = 1 pound then you've got to sell for 152,727 +costs just to get your money back.

When the euro was introduced in 1999  1 pound = 1,74e; when everyone adopted the euro , 1 pound = 1,62 & I had that exc. rate right across all my company invoices as the rate that would always be used for exc. in the event that the gov. decided to go in at a lower rate.I saw all this coming when the UK said it probably wasn't going in to the euro when everyone else did, long before bliar mentioned that they wanted to go in @ 1 pound = 1,20e.  Fortunately We brought most of our money over varying between 1,62 & 1,49.

Ever since I moved here I've always checked anything I've wanted to buy against costs in the UK & @ an exc. rate of circa 1'50= 1pound it was always cheaper to buy here, even though the UK prices were cheaper. All prices are still based on 1,50 = 1 pound, cars, spares, pumps, you name it it's 1,50=1 pound. It's 30+% cheaper to order a new lhd car in the UK, bring it over, pay all the registration costs here than to buy it here. I buy all my car spares in the UK & have them shipped here,  oe parts are 30+% cheaper & copy parts up to 90%, even including shipping & are here in 3/4days.New batteries for mobile phones 28e here , 3-5 pound in the UK, spare parts for agricultural equip. far cheaper shipped from the UK. I have bought parts from the UK that are from the same manufacturer,in the same boxes for 25 pounds, that the cheapest I could get here was 118euros. Identical.

I've never been able to understand how , if we are all in europe you can elect to not be in the currency & as you say this is what the "recovery" in the UK is based upon @ present. It's all smoke & mirrors.

You are right Gus Lopez. What techno is missing is that, say a property priced at 100k in an agent's window, would have a probable 5-7.5% commission built in therefore it's worth 5-7.5% less actually, then to complete at say 11% then this property worth 92.5k euros has actually cost 111k euros. Then to resell it, in order to get the 111k back it would have to be marketed for in excess of that to cover new agents' comm and a possible offer coming in, which means even if exchange rate stayed the same you'd need to add 20-25% at least just to break even.

Yes, I've bought several over the years in Spain, but at 1.60 and 1.64 euros to the pound, those were the days, so I don't see why 1.50 rate would never come back which if it did, as Gus says, you'd need to add maybe up to 50% to recoup your stg equivalent if you'd bought at 1.10 or less.

True it's not a problem for eurozone purchasers, but Brits were a very big market for Spain and most of those either cannot buy at these rates, nor can they now remortgage their UK homes to do so, so those who do buy at these rates have to be in for the long term. Many Brits are stuck in Spain, France etc because they cannot resell , and many are pensioners whose pensions have dropped 25-30% in euro value so they're on hard times!!!