Hi all,

I write to advice you all about the dangeraous of buying properties in Spain. All economic indicators point to a severe economic crisis in the next few years.

About half the Spain economy is based on the property market fuelled by low interest rates, a great inmigration and lots of expats. Because of this the property prices have reached scandalous prices so nowdays a mediam class spaniard has to give about 15 years of salary to buy a home meanwhile in the UK is about 5 times the salary and there people is scared. So you can imagine here in Spain!

The BCE is raising the interest rates so every month less people can have the right morgage for their budget, so the property market is at this moment at hard times.

Property developers continue to develop about 1 million properties/year in Spain whereas the demand is less and decreasing, so you can imagine what comes with a strong stock and a low demand. Property price fall.

There are areas where the high prices will give more severe corrections like Madrid, Barcelona, Basque Country and so on. So be very carefull to buy a property if its value is more than 200.000 euros because you can see how your brand new property will have about 30% decrease in its price in the short term.

The good news is that in the next few years the prices will go down letting people interesting to buy in Spain the chance of saving money to buy in the next property market cycle. About 5 or 8 years ahead.

So be careful is this hard years and you will find a good price.

Copied from another board, sick of hearing all this cobblers to be honest.

As an independent Building Surveyor I see a much broader picture of the market, and while some localised estate agents are complaining of a slow down and the share price of a few big developers has dropped, I have seen no change in the overall demand for property in Spain, but instead observed a busy period and change in buying trends. For example while newbuild or off plan purchases in areas like Torrevieja have reduced, there are still many buyer?s snapping up re-sales in the better zones of the same areas (e.g. close to the golf course), generally with the view that an established resale is less likely to have legal issues and it?s ready to use, being bought on a ?what you see is what you get? purchase mentality, provided that the basic structure is sound.

Buyer?s put off by coastal prices have also been flocking inland to the edge of the Valencian border and even into Castilla La Mancha, where a 3 bedroomed basic country house with land can be had for under 150k euros. Another recent trend was caused by a German tax probe which resulted in a rush of sales from German owners in some popular areas of the Costa Blanca, this included significant price drops by desperate vendors, but the buyer?s snapping up the hot property (often with sea views for under ?300k) were generally English, having realised an opportunity to purchase on the coast at very temporary lower prices. While some English agents in these areas noticed a drop in activity, the German agents saw lots of action and the properties I surveyed were generally real bargains.

Less activity is the norm in July and August and should not be mistaken this year for a crash. While undoubtedly the big developers will need to adjust this year (good news for everyone but them and their investors), their products and locations are generally quite different from the rest of the market and hence attract very different buyers. The buyer of the mass-produced newbuild ?Quad? (back to back semi) was never the type to look around extensively, otherwise they would almost certainly have bought bigger and better elsewhere. The overbuilding of town apartments (aimed at Spanish buyers) also has little effect on tourist areas. In my opinion there are still plenty of buyers, and the desire for a better way of life will keep them coming, they are now simply more discerning, taking a wider view of what?s available rather than being taken in by a blinkered inspection trip.

The media have created an overdue wake up call for would be newbuild buyers in Spain such that smart buyers are now shopping around and taking account of the vast property choice available across a much wider area. Long term investors should still do well but buy to let investors should watch out for a current clamp down on rental licensing and tax by the Spansih and UK tax authorities i.e. do it all above board.

While a few vendors have dropped prices to sell quickly, most were simply a little too optimistic in the first place and have still normally doubled their money in the last few years. Most of the panic has been down to a reduction in share value of a few big listed developers which has little relevance to the wider market. It’s like saying no more cars will sell because Ford’s share price drops. If you don’t shop around in Spain you can make a poor investment decision but by doing your homework Spain still represents a great opportunity. Recent moves by the government to control development and stop speculative building are welcome and bode well for the long term 5-10 year future of the market.
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Mark Paddon BSc Hons. ICIOB.

That is a very optimistic view of the real facts.

But the reality is that with the actual interest rate of EURIBOR at 4,5% the spanish families a in a strong throuble with their mortgages and is expected to reach about 6% in the next year. Also the interest rates are rising worlwide so expats will have more difficult to finance their property overseas.

Also with about half the Spanish economy depending on the property market you can imagine what could happen if the sales drop significally.

Spain besides sun and paella is a country with low wages and a corrupted political class (You could see it in Marbella but Spaniards seen this generalized around the country) where several hundred of british have been scammend in Albox (Almeria) buying properties developed in rustic areas.

The famous golf fields are usually developed in dry areas where water is not at all assured and also built in remote areas where the security is very compromised making them good objectives for East Europe criminals.

That is not what a Estate Agent will tell you but is the true in this days.

My advice is to give as much pressure as possible to the developers and the estate agents because they are in a very difficult situation. The developers have strong mortgages to pay their developments and they are finding them now with a decreasing number of sales which give them a lot of pressure to sell so a reduction of the price if you ask is very probable. If not, here we have 1 million properties waiting for their owner.

Do you live here ? I do.
My husband was in the property selling business until a couple of months ago. Houses here are still selling and the only people losing out are greedy investors. If you already own a house here and don’t expect to make huge gains you will sell. We sold ours earlier this year and bought another property after having 2 others we were considering snatched from under our noses. It’s a buyers market here and the coast is flooded with properties but they are not going down in price. If you haven’t bought here already then don’t put it off, they won’t go down in price.

Yes I do. I fact I am Spanish.

The most important developers in Spain like Llanera, Astroc, Urbas, Urbis, Metrovacesa, Colonial, ParqueSol and so on are in this moment in its low level on the stock market since 1 or 2 years.

This week the most important spanish banks (Santander and BBVA) have decided to sell all their properties (offices included) and later rent it because they think we are at the peek of the property market and the following expected move is the fall so is better to make cash than invest on properties.

Also the Banks are declining more finance to property companies because they have already about 250.000 million euro in debt and this is getting dangeraous with the falling on sales that we are experiencing.

So if you want only to be in Spain for several months every year now is by far to rent a house of the hundred of thousands available that buy one. Your money will be more productive on products like bonds or savings with rates of 4% and rising.

But if you want to live in our lovely country and you are not thinking about investment but in making a live, that is another thing. Just find the house you like and if your budget let you do that go ahead!

Also cheers for the one of Hamilton today! I am spanish but I know that Alonso is a bad loser.