The state of the Housing Market - Spain vs UK

[Stravinsky]

Please reply on the new thread now (off topic thread), not this one

[jojo]

I think fairly soon there is going to be a good time to buy in Spain. The UK has more or less stablised after a speedy "hit the bottom", which, in retrospect may have been deliberate, we all knock the UK politicians, financial bosses tec, but hey, surely they MUST know what they´re doing, eventho us mere mortals dont always think they do! Now the UK is having a period of letting the dust settle and then hopefully a slow but sure rise in property and prosperity.

Spain however, has kinda drifted along without appearing to take much notice of whats going on around it. It seems to me that its only recently that the Spanish government have started to admit there is a problem. So there´s still a way to go yet with the property down turn here. There will come a time when it does his rock bottom and that´ll be the time to get in and buy, cos then the prices will turn and things should start to pick up... its predicting when that´ll be thats the hard bit!???? Until then its a time to watch the market carefully and rent rather than buy here?????

There, "Jo´s economic bullitin" on the housing market!!!!!!.... probably wrong, but thats how I see it!!

Jo xx

[SteveHall]

Jojo Spain's situation is massively different in that it in effect has two markets and that such a huge percentage of its GDP hinges on construction and tourism and these have been inextricably linked for many years.

The expat market is in absolute disarray. The prices are in freefall and I think that my fear that they may go another 20/25% may have been optimistic. Talking to a very senior Marbella lawyer last week leads me to believe that there may be another 30/40% to go. Why? Simply that if people are struggling to pay their first mortgages in the UK/Eire etc then the holiday home must go. Punto. You have whole towns built on expat 100% mortgages and now whole urbanisations are in negative equity. Doña Pepa in Rojales is a prime example - 8,000 people with the CAM/EuroMarina and every one willing to do a deal. What can you buy a house there for now? The price of the most desperate vendor. I know a bank manager there very well and he jokes that he feels he should just leave a letter box where people can leave their keys as they flee. It would save his staff spending time on the bad luck stories.

The local market away from expatshire is also unique in Europe for two factors. One is Spain's huge empty house situation. Spain has over one million empty houses and the fact is that Spaniard's have a history of having two homes. In times of crisis, one can go. Whether this is the beach home, the hunting lodge or the cottage in the country this is even more property flooding the market.

With the highest unemployment in W.Europe I fear that the bottom is a long long way away.

[Tallulah]

Originally Posted by SteveHall

Jojo Spain's situation is massively different in that it in effect has two markets and that such a huge percentage of its GDP hinges on construction and tourism and these have been inextricably linked for many years.

The expat market is in absolute disarray. The prices are in freefall and I think that my fear that they may go another 20/25% may have been optimistic. Talking to a very senior Marbella lawyer last week leads me to believe that there may be another 30/40% to go. Why? Simply that if people are struggling to pay their first mortgages in the UK/Eire etc then the holiday home must go. Punto. You have whole towns built on expat 100% mortgages and now whole urbanisations are in negative equity. Doña Pepa in Rojales is a prime example - 8,000 people with the CAM/EuroMarina and every one willing to do a deal. What can you buy a house there for now? The price of the most desperate vendor. I know a bank manager there very well and he jokes that he feels he should just leave a letter box where people can leave their keys as they flee. It would save his staff spending time on the bad luck stories.

The local market away from expatshire is also unique in Europe for two factors. One is Spain's huge empty house situation. Spain has over one million empty houses and the fact is that Spaniard's have a history of having two homes. In times of crisis, one can go. Whether this is the beach home, the hunting lodge or the cottage in the country this is even more property flooding the market.

With the highest unemployment in W.Europe I fear that the bottom is a long long way away.

I believe it is true to say there are two markets currently. One could be deemed "leisure/holiday home market" and the other is the proper "residential" market - I don't think the latter is going to fall much further based on properties currently on the market (proper houses and the larger flats i.e. family appartments). The vendors simply seem to be waiting and are rather stubborn in holding their prices. They obviously don't want to "sell for a song" and so what this will do is simply slow down to a crawl the immobiliaria market. I have seen proof of this with people looking for bargains on chalets/casas with 1000 plus metre plots and they are simply not to be had. Flat by the beach though, dozens of them and well down on a year ago.

Tallulah.x

[Tallulah]

Originally Posted by My_Name_is_Tallulah

I believe it is true to say there are two markets currently. One could be deemed "leisure/holiday home market" and the other is the proper "residential" market - I don't think the latter is going to fall much further based on properties currently on the market (proper houses and the larger flats i.e. family appartments). The vendors simply seem to be waiting and are rather stubborn in holding their prices. They obviously don't want to "sell for a song" and so what this will do is simply slow down to a crawl the immobiliaria market. I have seen proof of this with people looking for bargains on chalets/casas with 1000 plus metre plots and they are simply not to be had. Flat by the beach though, dozens of them and well down on a year ago.

Tallulah.x

ps - I think Spain has realised that the days of using more than 50% of all of Europe's cement to keep it's economy going are gone. Things like energia renovable appear to be its focus point and hopefully this will see an end to the very old reliance on construction and a newer, stronger Spanish economy base.

[SunnySpain]

Originally Posted by My_Name_is_Tallulah

I believe it is true to say there are two markets currently. One could be deemed "leisure/holiday home market" and the other is the proper "residential" market - I don't think the latter is going to fall much further based on properties currently on the market (proper houses and the larger flats i.e. family appartments). The vendors simply seem to be waiting and are rather stubborn in holding their prices. Flat by the beach though, dozens of them and well down on a year ago.

Tallulah.x

True that, but its also interesting that property prices have hardly budged an inch in certain parts of the North of Spain. Rentals however are certainly down on last year and this is definitely the case in the towns and villages.

The difference between the North and South is quite extreme both in terms of the quality and price fluctuation of properties.

I personally think property prices must be reduced considerably in Spain before any recovery will happen, although maybe its the touristy areas where this must happen first i.e. Costa del Sol

Dave

[Tallulah]

Originally Posted by SunnySpain

True that, but its also interesting that property prices have hardly budged an inch in certain parts of the North of Spain. Rentals however are certainly down on last year and this is definitely the case in the towns and villages.

The difference between the North and South is quite extreme both in terms of the quality and price fluctuation of properties.

I personally think property prices must be reduced considerably in Spain before any recovery will happen, although maybe its the touristy areas where this must happen first i.e. Costa del Sol

Dave

Dave,
Definitely supply is way outstripping demand in the Costas. Here in Galicia and the more remote parts of Cantabria have long since had ghost villages where kids do not want to follow in family footsteps of working the land, morning til night, and move to cities. Spain has the kind of square footage space that allows this to happen with property markets not being impacted at all. It wouldn't surprise me if these mega flat builds/zones by the Costas don't end up with a similar fate.

Tallulah.x

[jojo]

Originally Posted by SunnySpain

True that, but its also interesting that property prices have hardly budged an inch in certain parts of the North of Spain. Rentals however are certainly down on last year and this is definitely the case in the towns and villages.

The difference between the North and South is quite extreme both in terms of the quality and price fluctuation of properties.

I personally think property prices must be reduced considerably in Spain before any recovery will happen, although maybe its the touristy areas where this must happen first i.e. Costa del Sol

Dave

Property prices are definately falling around my area - inland costa del sol. Places we looked at over a year ago are still on the market and most have dropped their prices significantly a couple by as much as 150.000€. Yes, they were over priced before, still riding on the dream, but now there is an air of desperation. Its hard to see where it will end for some of these properties???

Jo

[Tallulah]

I'm sure there's a huge buy-to-let market in the South, fuelled by the Expatshires. These owners, as with the UK will be the ones deciding what to do with their portfolios and many will face repossessions, I'm sure. At the end of the day, that side of the housing market is pure business and as with other businesses driven by bank loans, some over-stretched, will suffer hardest in the current climate.


Tallulah.x

[jojo]

Originally Posted by My_Name_is_Tallulah

I'm sure there's a huge buy-to-let market in the South, fuelled by the Expatshires. These owners, as with the UK will be the ones deciding what to do with their portfolios and many will face repossessions, I'm sure. At the end of the day, that side of the housing market is pure business and as with other businesses driven by bank loans, some over-stretched, will suffer hardest in the current climate.


Tallulah.x

Oddly enough there seems to be a shortage of rental properties around here. I would have thought the opposite. I´m looking at the moment for a possible move to another rented place, so I´ve been looking and apart from one or two rather shabby places, there isnt much out there!!?? why is that??

Jo xxx