Spanish property traps sellers, lures buyers

Its not only Spain Cyprus has the same problems

Spain has some way to go yet before the property market hits the bottom. When you actually look how many houses they have built along the coast, the whole coast of Spain is covered! There just isn't the demand for that many holiday homes. Also, they haven't fallen back in real term to the prices of 10 years ago. They still have to fall by 25% more.

The secondary Spanish banks, who are exposed to the property market, have their bottom out of the window for a cool 500-600 BILLION Euros

Now you know why selling a house in Spain is bad news.

This seems to refer to the dodgy locations in Spain and the overpriced mass appartments more than where I live. You mention a cheapo developer. Quality and location and value as ever survive and prosper.

Property in Spain will sink like a rock in the sea when Spain defaults on its loans after Greece first and Portugal second.

As for us, we shall probably escape the worst by printing ever more pound notes and letting our descendants pay by working as chauffeurs and gardeners for the Chinese and Indians.

I am a Brit ex pat living in Spain for the past ten years. The Spanish are now feeling the result of some appalling design quality and massive over development in prime coastal areas. Also the Banks do not 'mark to market' on their loans - however the market is now doing that for them but it is a long, painful process. They also have to tidy up their act regarding 'land grab' laws, corruption at many levels, lawyers who do little to protect their clients, and a dysfunctional planning system.

Meanwhile the working man - who had no control over this corrupt, ineffectual and self serving bureaucracy - is suffering the pain of massive unemployment. However the climate is great and the average Spaniard is still cheerful.

oh no I wanted a sunny second home I'm effed now aren't I ? 60k stock market or property what should I do? (no pension)

Garth makes a very important point. I too own a house in Spain in Murcia, and am lucky that there are no threats of demolition, land grabs etc. I wrote to the Spanish Ambassador in the UK last year to put to him that if they want their country's construction industry to recover, then Madrd must put controls in to safeguard buyers and owners. He said he passed it on, but I suspect he meant "filed it in the bin" The experience of the Priors could yet be felt by some 1000's of homes in Southern Spain which are still under threat of demolition. On top of this a Spanish Minister is apparently wondering around Europe telling people that Spain is a safe and secure country to buy in, in total disregard to the reality. I would be hard pressed to suggest to anyone to buy in Spain today without being very very cautious

Mr Casandra

Your choice is Proflicacy or Thrift . As that Scot B'stard MP PM ruined pensions (except for the unionised public sector who steal off poor pensioners to get it paid all based on the might of strike - )- I should spend it and rely on the state for your old age. £60 K will buy you nowt much anyhow.......

Alex J

There are some simple rules to buy safe in Spain.

Get a good independent abogado - lawyer - preferably an English one practising in Spain.

Buy on an established Urbanisation, either new build plot or s/h.

If its a new build look to see if there is a bank guarantee from a solvent bank

Do not leave your brains at home Caveat Emptor - Buyer Beware

If it looks too good to be true it probably is.

Don't buy a property in Spain yet, better to rent it out until the property market is correctly valued to reflect the many risks of owning property over threre, i.e. Land Grab, Shoddy build quality, subsidence risks, falling prices etc.

The price should be so low in Spain that you will feel like you can't loose, that's the time to buy, not when a 1 bed flat is like £100k, more like when a 1 bed flat can be bought on your credit card!

Maybe ive missed the point here

If you want an investment why would you buy in Spain with all the problems which i wont list here but there are loads

Why not buy in the UK where you know the rules ect ect

If your going to live in spain and move from the UK I would rent in spain keep my property here rent it out and enjoy both worlds

If you have a problem in spain hand the keys back and move to another rented property if things get bad move back to the UK 1000s of brits are doing it and not just in spain ive been to cyprus a month ago 100s are leaveing every week IF THEY CAN

Spain is not cheap its a con most folks leave there brains in the airoplane when they get off

I dont get it I really dont

Dislexic Landlord, That sounds like great advice, in fact why even go there at all?

It's so expensive now you could go almost anywhere else in the world cheaper, we stopped holidaying there 3 years ago when a cup of coffe was 2.5 euro's, and a meal out at an indian restaurant cost over 40 euro's a head for an 2 course meal with very few drinks! much cheaper to holiday in the uk now, as for the idea of enjoying a cheap retirement out there, no chance!

I know many people who moved out to spain and bought property who would be so much better off if they just rented and handed back the keys when there apartments slid off the side off a cliff into the sea, floating foundations do not work in reality!

I dread to think what will happen when the Spanish banking system implodes under the weight of all this negative equity and bad debt they are sitting on, if you wan't to know what a trillion euro ponzi scheme is like then look no further!

Agree with Red Dragon, Just back from 2 weeks in Majorca, devalued pound makes eating out inline with central london prices... not sustainable for the majority of holiday makers.

Re. property prices, Villa bought 15 yrs ago is still the best investment my folks made, prices might be 5-10% off, but still 5x what was paid in mid 90s.

Question is if they needed to, could they sell it....

Hi Red Dragon

Im glad i have someone else who agrees with my thoughts

I never did get the into buying over seas

Ive been on lots of shot breacks in the early 2000,s £99.00 to have a look at Paloris World ect

It looked lovey on the surface Next to a Golf Course but it was nothing but a con from start to finish Im sorry to say

Perhaps the Spanish market will recover when we run out of electricity here.

The value of property is in the eye of the beholder and many have been caught as in this country by overpriced property and bad advice

In 1976 I bought an apartment right on the cliff edge in Nerja for £6000. I sold it about 15 years later for 5 times as much. It was on sale two years ago for 150000 euros. Anyone paying that kind of price for it was asking for a severe headache when the bubble burst. So far as I know, it's still for sale......... We still drive down to Nerja most years, and the estate agents and their client are still living in dreamland.

i 100% agree with Dislexic

I cannot imagine why anyone thinks that Spanish property is a good investment

Spain is bankrupt, the economy weak, property there is still massively over-valued. Clearly the Spanish Govt and corrupt local authorities treat British investors with contempt with the land grabs and corruption surrounding planning permission

If you like the lifestyle, rent a place there and keep your assets somewhere safe in the UK...the legal and regulatory regime for property in Spain is not to be trusted

I believe the real fall in Spanish property values has yet to happen and when it does look out - all these holiday flats and villas will be worthless. The latest increase in interest rates in Eurozone will only hasten the collapse of Spain's housing market...

I live in Javea and to a certain extent we seem to be cushioned from most of the property falls. I feel very sorry for those who live in other areas eg. Murcia etc. local agents say they are inundated with time-wasters who think they can pick up distress sales cheaply. You just try to find a "bargain" and you are wasting your time. The old agage of "location, location, location" has never been more true than in Javea. I agree with most of rich banker's comments except I would say that buying new is fraught with possible horrors. Builders going under half-way through the job, incompetent and bent lawyers etc. etc. But s/h with an escritura and you should be safe.

Take no notice of scare stories about prices. Javea & Moraira and surrounding areas are very upmarket but a coffee can range from 1 euro to 1.80. A superb meal in Tosca, for example is 17 euros for 3 courses including a half-bottle of good wine per person. We have literally hundreds of bars and restaurants and competition keeps them on their toes.

Visits to Majorca fill me with dread as their prices are a joke. Oh, by the way, the weather is fantastic.

Dislexic Landlord: I'd certaoinly be far more comfortable with investment props in the UK and renting a home in the sun. Why are 100s of people leaving Cyprus? Cost of living rises?

Nobody has mentioned the effect of money laundering of the mafia in all of this !!!, The year 2000 enter the EURO, Mafia stuck with Billions in various currencies and raking in more millions in cash from rackets across the now "New Euro Zone" they had to get rid of all those defunct currencies some where what better way than create a property boom in cheap as chips CORRUPT SPAIN.

@canucthetrees,

I'd like to know where all the Greeks that are buying property in London got their money from. Actually, I think I can guess.

Red Dragon paying 40 euros a head in an Indian in Spain for 2 courses he must be in a 5 star Indian he must be a realy rich banker and 2.5 euros for coffee must be a Hilton sugest you go to Moraira or Javea and get real! someone has to remark on these daft comments

Patrick Lynch re Tasca in Moraira 17 euros for 3 course with wine, very good food, good service be careful of the free drink and driving. There are lots meal of the days still from 9 euros with wine, Chinese from 9 euros with wine.

Spain is still good value need to get out and check around.

I agree with Ray Hall, but you do get what you pay for, Tosca's food and wine is far superior than the Spanish or Chinese for 9 euros. Anyway, as you say, Red Dragon must be very rich.

Regards

I wish, coffe prices were on Biyuayni beach Nerja and also an Indian restaurant in Nerja town!

Rich bankers don't go to the costa del sol!

"Their situation is made worse by the fact that sterling has fallen against the euro by around 25% since the credit crunch".

What a ridiculous statement.

Say someone bought a house in Spain exactly 4 years ago. Value was €300,00. That cost £204,081 using €1.47:£1.

Their house is now worth 25% less =.€225,000.

Sell it and covert it back to Sterling at todays rate (€1.13) you get £254,250.

You have made £50,169 profit.

The comment was made in terms of what it has done to their income's spending power and nothing to do with the value of their house.

@Cornwall Cameron,

Good point.

Small issue with Cornwall's point.... €225,000 isn't £254k.

Its more like £200k, so not a disaster.. but not a £50k profit either.

Thanks james t.

I was so wound up by the comment of the so called double whammy.

Lets hope it doesn't get to £1 for 88 Euro cents. It may have it it wasn't for our Greek friends.

Here on the Costa Blanca _Not Sol as someone alluded to I know lots of rich people bankers, oligarchs, Germans, and the French have just moved in big-time.

The fact is like the UK and elsewhere there are many property markets in Spain. The top end in good locations is holding up OK especially if you bought/built a few years ago. I have just taken advantage of the ease of employing builders to build a new tower on my villa that is worth approximately 5 x what I paid for it in 1999/2000.

As for the cost of living, yes it has gone up but so it has in the UK. But you can still dine out well for 10€'s per head including wine. You need to know your way around and as ever do the research. Tradesman now respond on the same day and locals charge reasonable rates and do a good job.

Those at the bottom end who paid too much just before the crash, especially for overpriced flats have as in the UK caught a cold. But if you do not want / need to sell it is no problema.

The weather comes free!

Of course for really cheapo property they tell me Brazil is the place but its a long way away and quite Wild West I gather.

I believe the greed of the Spanish developer has left the country less beautiful - every bit of coast complete with tower block, & all for foreigners - how can you explain this but extreme greed.

I have never visited Spain for this particular reason - if they are prepared to go to this length to facilitate foreigners, how can you trust them to care about anything worthwhile?

They have spoilt their entire coastline so that Germans, Brits, & Johnny Foreigner can lie on their deck chairs & get a sea view.

I do respect the Welsh though, they have left large parts of their coastline as wild as I like it, with not a development in sight - hope they do not get bitten by the Spanish bug!!

In Spain the holiday homes are repossesed, fall into the sea, leveled for illeagal building etc the Welsh burn them!