Spanish Property

Martin.Dye · #1 (**permalink**) 19th May 2007, 10:50 AM

Hello Forum,
I'm Martin from Bedfordshire in the UK.

I am retiring next year, selling up in the UK and looking out for property in the Costa Blanca part of Spain. We have holidayed lots in Denia and Alicante.

We are pretty much set on doing this and have started looking for our small retirement villa already. I am getting a bit worried about the recent news in the papers on the Spanish property colling in price.

Should we wait? Or should we continue looking? What would be the wise thing to do. I really dont want to pay £300k for a villa now that may be worth £200k next year...

Martin

Goldberg · #2 (**permalink**) 27th May 2007, 10:02 PM

The truth is no one knows the future.

The second truth is, that markets are cyclical, ie. they go up and down

The third truth is each day we get older.

So in answer to your question. Buy now and worry if there is a crash around the corner when you are enjoying the sun and going down the beach. Then it goes down 10% or 15%, but it is not in my opinion going to go down 50%, that is not going to happen.

200k sterling to be on the beach in denia a villa, well that is pretty tough, 300k sterling, to be on the beach will not happen either, if you have a million euro, you can be on the beach, apartments on the beach are 200 250k euros, so villas front line, forget it.

200k buys you a plot euros in denia, maybe you can get one at 150k further out.

The truth is, if someone wants to sell they may drop the price, but no one other than that wants to. People today will want more money tomorrow, if they get it it is another thing. Spain and the uk are very tightly correlated, and sales may go down, but prices, have dropped off about 10% over the last year, but will they go down, probably level off, maybe go down 5% more, maybe at a push 10% but people will just hold the property and give it to family etc, there is no point unless you are strapped for cash to sell.

New financial products arrive in Spain as well so people can release equity in house etc and continue to live in it, so 50% crash, we shall see, I see a gentle downward glide then it will gain wind again. This is probably one of the best places in the world to permanently live. Why sell cheap?

The more people who come and see how nice it is, the more people will come and see how nice it is? maybe in Torrevieja the prices can go down, but here, Denia. Cant see it personally. It is too nice.

atlast · #3 (**permalink**) 29th May 2007, 02:25 PM

We didn't buy because we wanted to be sure we would be happy first. All the articles about the 'crash' seem to be about a reduction in the rate of increase. However, having seen a couple of real crashes in the US, I know what happens to some people.

It doesn't matter very much if you are happy with your home and intend to keep living there, and can afford to. It only becomes an immediate problem if you are forced to sell because of a new job, losing a job, or some other external problem.

If you don't have much equity in the house, you are trapped. Instead of just losing equity, you actually acquire debt as the house value falls. I know more than one couple who had to pay money at closing to get out of their house, because they had to sell for less than they owed.

If you have a lot of equity, you can take your losses and run, but only if you haven't been counting on that equity to fund your retirement or your next house.

Rents tend to fall, as people with houses they can't get out of try and get some income from them while they downscale. The number of places for rent goes up.

So if you want to buy, go ahead. I think you should rent for a year, then buy. Once you are sure you will stay long term, buy, and don't worry about the ups and downs unless you end up in a place you can't afford.

Grania · #4 (**permalink**) 30th May 2007, 05:26 AM

Hi, I have been to Spain for quite a few times on travel and I think living in Spain must be a fine life. When I was there I have heard of some property related sites, spanish property and buy property spain (preparing for my own moving to Spain

) . I hope these could help you a little. Have a good life in Spain!
Good luck!

atlast · #5 (**permalink**) 6th June 2007, 04:11 PM

Even if there is a crash, it doesn't matter if you don't need to sell the house. As was pointed out, if you are doing your worrying on the beach or sitting on a terrace with a nice tall drink, it may not seem so important to you.

Fay · #6 (**permalink**) 15th June 2007, 12:33 PM

My advice would be to buy now. In truth, property prices may level out, as we are seeing more and more new builds and constructions popping up, well here in the south anyway. I cannot really see a dramatic decrease in property prices coming, however it is a buyers market, with a good choice of properties, to suit all tastes and almost all budgets. Saying that, renting first is always a good option, until you get a feel for a certain area, because living in a place is certainly very different to holidaying there.

atlast · #7 (**permalink**) 15th June 2007, 05:49 PM

I guess, though, I'm still glad we decided to rent first, considering the way I've been feeling about the place.

ellenjoan · #8 (**permalink**) 17th June 2007, 08:27 AM

I can only advice you to rent first...as you want it to be the place where you are going to stay for the rest of your life.

Spain has a lot to offer (sun,sea,...) but has also some....
Too many British expats have lost all their money on bying land and houses that were illegal...

I ve been living here for 4 years and it took me about 18 months before I signed at the Notary's because the papers weren't in order (it's a relief I studied and checked all the papers in advance (= my profession) otherwise I too would have bought a cat in a bag.

Come and stay for a while and check where you would like to live before buying any property...Prices will be getting down in some time...

Wish you all the best !

Ellenjoan

atlast · #9 (**permalink**) 19th June 2007, 05:45 PM

I've heard of people being more or less trapped here, even when they have clear title to the land. They overpay, because the prices are so much lower than at home. Then, when they want to sell, they are limited to the new expat market, because they are the only ones that might be foolish enough to pay so much.

This problem goes away over time as property values increase. Then it becomes possible to get your money back even selling on the local market.

Destination Spain · #10 (**permalink**) 21st June 2007, 04:32 PM

Best advice so far is rent for 6 months or so and get yourself a good independant Abogado/Solicitor. Check with the Law Society in the UK for one nearest to where you are planning to buy.