Original article: Property blog According to Spain’s national institute of Statistics (INE) the collapse in property sales may be coming to an end. Based on the latest figures from July (link below), there were a total of 37,079 property transactions in the month, of which 33,694 were standard sales and 3,345 were social housing (VPO).
Looking at non-VPO sales for a moment, that is a decrease of 19.6% year on year. Not necessarily a good figure, but compared to earlier in the year there has been a marked improvement in the level of sales with an increase month on month of 5.8%. Finally a positive bit of news!
On another interesting note looking at the figures for Spain, of the total properties sold 18,688 were for newly completed properties and 18,351 were for re-sales. This is the first time in recent years that both of these categories have reached parity. Generally new properties have made up a higher percentage of the total over the last year, due to the off-plan property boom in recent years. But with fewer and fewer off-plan sales from the ‘boom’ left to go to completion, this figure should continue to decrease and re-sales should once again make up the majority.
But this does not mean there will be no more new build sales. There are still many promotions on the market still looking for buyers. So, we can expect the figure to continue to decrease, as the best new build properties will sell first, and the less popular will continue to drop in price until there is demand. Although I could be wrong on this matter and the new build figure might suddenly plunge to next to nothing! Unlikely, but still a possibility.
Now for a bit of positive news for us here in Andalucía. Of the total 37,039 properties sold in Spain, 7,898 were in Andalucía. That 21.1% of the total. Or 1 in 5 of all properties sold in Spain!
So although the figures are better for July than for June, year on year, they are still down. And of course they are lower than the 2007 peeks. But if this trend continues we might soon see the end of this long dark tunnel
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So now that you have planned to have your share too in Spanish properties, here is a good way to go about the entire process of selecting and buying your very own little châteaux in the wonderful country of Spain. You can have a look at various Spanish properties just by sitting in your office or home and select a place where you want to invest.
Having selected the region – a Costa or any city, you can look at the various investment options you have, see the different Spanish properties that are available there and check out the rates and prices of properties in that particular area. But before committing anything, it is always beneficial to have a look at what you are investing in. This gives you a better picture before you invest.
For that you need to go to Spain for a short trip and check the properties and locations with your own eyes. When in Spain, you can hire a car and drive down to the region you are interested in. There are plenty of car rental service providers in all the major cities of Spain. You can book a car from the airport as well.
However, it is advisable that you book your car before you reach Spain. You can book a car through web based car brokers. This helps in different ways – first, you get better deals from online car brokers, secondly, you can go through the fine prints of such services at length and not sign up any document hastily. Also remember, that third party liability insurance is a must when you are booking a car.
Not just booking a car, while you are online, you can also get in touch with online property dealers and agents or sites that would help you meet a professional dealer in Spanish properties. This would help you to get to know your property better and also you have good chances of getting a lucrative deal.
When it comes to popular tourist destinations of the world, Spain ranks among the top five. And not just for holiday purposes, the country experiences a huge surge of people who are interested to buy property here and also stay. Spain can prove to be a wonderful treat for you, in any way you want to experience it.
Spain for Residing Purposes
Every region of Spain has something unique to offer. Every part of the country has its own flavour and you can enjoy it all during your vacations. The weather is lovely round the year and you can lead a relaxed lifestyle in any of the popular Spanish mainland resorts. You can invest in luxurious Spanish villas, apartments or penthouses and lead a comfortable life with all the amenities that will complement your lifestyle.
Spain as Holiday Destination
Make the best use of your holidays by visiting the lovely golden beaches of the Balearic Islands and the Canary Islands. The white sand, the warm sun and the deep blue sea waters are just the ingredients for you to rejuvenate and revive. Added to this are the various water sports that will re-ignite the enthusiasm in you.
Golf in Spain
Not just water sports, Spain has a range of other interesting sports that you can both watch and also play. You can unwind yourself in Polaris World, where there are numerous golf courses and golf resorts. Polaris World, as considered by some serious golf buffs, is a heaven for golf lovers.
Apart from Golf, you can also enjoy the famous Spanish Bull Fight and other interesting sports and other forms of entertainment.
Spanish Villas
If you intend to buy Spanish Villas, the best way to deal with this is by approaching a professional agent. Now you can get the services of honest and efficient property agents at the click of a mouse.
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A large number of people from the UK have purchased Spanish Property and Spain is a very popular location for the British. The climate is wonderful, the food beautiful and Spanish apartments and villas can be bought at very reasonable rates. Popular destinations include Ibiza, Majorca and the Costa Del Sol.
There is a large ex-pat community across Spain, and many Brits have chosen to sell up and live in Spain permanently to escape from the UK. This is because the lifestyle and quality of life is so much better than in the UK. With rising energy, food, car and petrol prices, life in Spain also offers a cheaper alternative as the cost of living is generally lower than in the UK.
There is a wide range of quality homes that can be bought, with many developers and housing organisations offering property for sale in Spain at reasonable prices compared to the UK. Homes and houses in Spain are built to a high standard, and some have pools, verandas, outside social and barbeque areas and cool, spacious living areas with high quality finishes such as marble floors and tiled rooms.
Throughout the media there have been horror stories about Developers who have left unfinished properties and developments, or those who have disappeared after receiving deposits from buyers. Buyers can protect themselves by taking a few simple and sensible measures.
- Do your research about the developer, ask people and get in touch with other purchasers about their buying experiences.
- Don’t part with your money or purchase off plan unless you have met with the seller or the Developer and visited to view the development yourself.
- Don’t feel pushed ito buying or paying a deposit until you have had the opportunity to research the Spanish property and developer and wait until you feel comfortable with the purchase.
- You may also want to go via agents in the UK who specialise in Spain property and who will act as a broker between yourself and the developer or seller. They can also negotiate deals on your behalf and arrange legal and financial issues too resulting in a much smoother process.
Most Brits though have had no problems and buy Spanish property as their second home or main home in their thousands. Although other European property markets have been emerging recently, including Bulgaria and Portugal, Spain remains a very popular destination and there is still a wide, affordable range of property for sale in Spain. There is also a wide range of luxury Spanish apartments and villas for sale at the top end of the market for the discerning buyer with a larger budget to spare. Spain continues to offer a great choice and availability for Brits who want to escape the UK and take advantage of Spain and all it offers.
If you want a lifestyle full of warmth and colour, there’s no need to travel halfway across the globe. Just hop on a plane to Spain and in under three hours you’re in a new world of great weather, a vibrant culture and a matchless variety of things to do and places to go. Spain offers the ultimate lifestyle – a rich blend of a balmy climate, stunning scenery, and a relaxed and sensuous way of life. Here’s why Spain is such a special place.
First, there’s the sheer beauty of the country. Spain has a varied topography from the rugged mountains of the north to the glorious stretches of coast on the Atlantic and Mediterranean. There are timeless monuments, solitary castles looming on hilltops, medieval towns with winding cobbled streets, and chic cities such as Madrid and Barcelona offering grand shopping, art galleries and restaurants.
While Spain’s inland cities such as Granada, Seville and the capital Madrid are a must visit, it’s the coastline that attracts most visitors and offers the real Spanish lifestyle. For one thing, the weather is better along the coast. True, it does occasionally rain even in the summer months, but compared to the oppressive heat of the hinterland, temperatures along the coast are generally pleasant.
Southeast Spain is one of the country’s choice areas and is home to lovely cities, towns and fishing villages nestled between the mountains and the harbours and beaches on the Mediterranean. Holidays in this part of Spain give every day the feeling of a fiesta. Then there’s the matter of the weather.
Natural beauty always looks much better under sunny skies and that’s where Spain wins out. Spain has the warmest, sunniest and driest winter climate of all Europe. And if you visit in summer, the long swathe of Mediterranean coast will bask to temperatures of over 20C for most of the time.
A great benefit of the balmy weather is the outdoor lifestyle. Being able to spend most of the day outdoors makes for a much more socially connected community. Here you can live the village life, the beach life and the leisure life. One thing’s for sure, life in Spain is never dull.
There’s always something happening in Spain and if you’re lucky, you can witness one of the many fiestas and religious celebrations that pepper the Spanish calendar. Many of these festivals are real extravaganzas in which the people dress in exotic costumes and parade through the town. Fireworks, burning effigies and such endeavours such as creating the world’s largest paella are also popular at festival time.
And another great thing about living in Spain is the cost of living. Though Spain isn’t the bargain it was in the 1970s, you can still live around two thirds of what you’d spend in the UK. Rents and property are cheaper and you can eat well for very reasonable prices. For example, you could dine on freshly caught and grilled seafood every day if you wished. And of course the wine is plentiful and reasonably priced.
Finally, Spain offers the opportunity to partake an unparalleled range of activities, especially outdoor ones. In southeastern Spain, you can enjoy water sports virtually every day of the year and if golf is your thing, you can tee off on some of Europe’s finest courses.
So if you’d like to spend your days playing golf or relaxing on long sandy beaches, the Almeria coast (Costa de Almeria) in Andalusia is your place. After a strenuous day, you can spend your evenings nibbling on tapas and drinking a few glasses of wine or just relax on the terrace of your hotel or villa.
If you decide to make the smart move and relocate or get a second home in Spain, property is still a great investment. You can acquire villas, cottages, apartments or townhouses at reasonable prices.
All the infrastructure you need for modern life is there, too – international schools, first-class medical facilities, and English-speaking doctors and lawyers. It’s little wonder that southern Spain is the most popular country for Europeans seeking a home overseas.
When investing in overseas property you need experts to help you. So it makes sense to buy into an established resort where you get the professionalism, stability and security you need for your perfect new home. for Spanish properties and golf holidays, Almanzora is the place to go. Check online for holidays in Spain or facts on Spain property.
Although all I can see is continuing property pain in Spain, I keep reading suggestions that now is the time to snap up a bargain. In fact at every stage of the crash there has been no shortage of property insiders talking up the market:
“We have again an increased demand, we do not have an oversupply . . those buying today will be judged to have been the smartest buyers”. [Viva Estates April 2007]
“It is an exciting time in Spain, it’s a buyer’s market and quite frankly, it’s never been better.” [Mediter Real Estate February 2008]
“it is currently a good time to buy in Spain” [Beatriz Corredor, Spanish Housing Minister June 2008]
“now is a very favourable time to purchase in Spain” [spanishpropertyclub.org.uk September 2008]
“Experts say this is a good time to buy in Spain because property prices have dropped on average by 20 per cent” [Sunday Mail January 2009]
“Now is the time to buy in Spain . . . I predict that the overall market in Spain and in its coastal provinces will recover in due course to even greater values, undreamed-of at the height of the previous boom.” [Almanzora, developer May 2009]
So after years of false and dangerous optimism is now the time to buy? Here are my 10 reasons to doubt it.
1. The backlog of unsold or unfinished homes in Spain
UK house prices are seeing a tentative recovery but the UK’s strict planning laws have kept the supply of new property tight whereas in Spain the opposite is true. There are estimated to be 900,000 unsold completed dwellings weighing down the market with many more unfinished constructions. The problem is growing: during the first of the year twice as many new builds were completed as were sold.
2. Repossessions
As in the UK repossessed properties are adding to market woes and this drag on prices is set to worsen. The Spanish paper Expansion reported recently that “one in five households are at a high risk of default” and that banks are “preparing a for a second wave of defaults from the Autumn” because of unemployment. Repossessed properties are often sold cheaply at auction or using websites owned by the banks like Caixa Catalunya’s www.procam-inmobiliaria.com.
3. Unemployment
High unemployment is likely to weigh on both the Spanish and UK housing markets for a while. It’s hard to see the market for Spanish property rising to “undreamed of” levels with unemployment approaching 20%. Spain’s unemployed are paying the price for an economy overly geared towards construction and many jobs lost in construction and estate agency will never return. It’s hard to see unemployment falling sharply with tourism suffering and a social security system that actively discourages job creation.
4. The “Credit crunch” is not over
As in the UK mortgages remain hard to come by as banks rebuild their balance sheets and remain wary of lending to all but those with perfect credit. It’s hard to see a sustained recovery without the return of the “normal” buyers who don’t have 30% deposits to put down. Would-be buyers often fall foul of highly conservative valuations by the banks. Under the headline “Tricks and Mortar” The Economist described how the Bank of Spain has allowed the banks to hide €22bn of bad loans suggesting that they are not about to return to full health any time soon.
5. Tarnished reputations
Even with normal credit conditions there are other reasons to doubt that Spain can shrug off the property crash at least in coastal areas popular with foreign buyers. The perception that owning a property in Spain is a sun-drenched dream has been buried by:
>Estate agents’ hype prior to the crash (see above). Who will ever believe that Spanish property is a rock-solid investment again?
>Illegal build scandals in Andalucia and Murcia may be resolved without all the affected homes being bulldozed but the damage to reputation has been done.
>Valencia’s “Land Grab” laws which have tainted all Costas by association.
>Bankrupt promotors have left a trail of broken promises to those that bought offplan, not to mention many half-built and badly maintained developments
6. The weak pound
As I write sterling is at €1.17, much better than its nadir of than €1.03 in January, but a far cry from the €1.40 to €1.50 range that used to make Spanish property seem so attractive. Can the pound recover further? I don’t know but I wouldn’t bet on it while UK government borrowing is spiralling out of control.
7. Prices have fallen everywhere
Many of the industry’s boosters say that because Spanish prices have fallen they must now be bargains. This is not necessarily true because prices in most countries that attract British buyers have also fallen. For example in Dubai the investment bank EFG-Hermes said recently that they expect a drop of 50-60% from the 2008 peak. As for Florida prices have been falling steadily for 3 years; Irish broker Jack French has 2 bed condos in Orlando from 50,000€, a 75% discount. Prices in former hotspots in Eastern Europe such as Bulgaria are described as being in meltdown.
8. Murky figures
It might help us see light at the end of the tunnel if we could rely on reported statistics but the old cliché “lies, damned lies . ..” rings all too true in the world of Spanish property. The main government (INE) and private (TINSA) indices show prices falling 7-10% from the peak but property writer Mark Stucklin says “in reality, the index has to be taken with a pinch of salt”. A further problem is promotors and other sellers failing to reduce their advertised prices putting the onus on buyers to negotiate “discounts” which does little for market transparency or confidence.
9. Buyers returning?
Some agents have reported increasing numbers of enquiries latterly but these claims should be treated with caution for a number of reasons:
>they are made by Estate Agents! Is it really true, as Dreamhomes Worldwide claim on their website that “there is definitely no shortage of clients in search of properties on the Costa del Sol”?
>the crash has forced many agents out of business so the surviving agents should be getting more enquiries, other things being equal
>how many “buyers” are actually just looking? Completed transactions are the real test and these are still showing double digit year on year falls in most areas.
10. The end of a super boom
The industry is able to get away with its propaganda about “bargains” and “undreamed of” price rises in the future because the property boom mentality is deeply ingrained in the British and Spanish collective psyches. We have become used to a cyclical pattern with higher and higher peaks following periodic busts with seeming inevitability. There is every reason to believe that this time will be different and that we have reached the end of a super boom in property and asset values generally.
To understand why you have to look at the reason previous busts have rebounded to begin new booms. The pattern has always been the same – governments have slashed interest rates to boost consumer demand, reflate asset prices and end the recession. The trouble is that this policy has left households more and more indebted to the point where they can’t afford to take on any more debt even with very low interest rates. I believe we have reached the limit of debt-fueled growth in Spain, Britain and most of the Western economies. Any recovery we see this year will be artificial or phoney, built on the back of public sector debt which is not a sustainable source of growth nor likely to trigger a new private sector boom.
CONCLUSION
If you are being tempted by all the talk of recovery and bargains I would advise caution. There is no rush. Take time to observe the market making sure that you are reading unbiased opinion and facts not manipulative propaganda from industry insiders posing as experts. A good place to look is spanishpropertyinsight.com which I have found to be a rare source of independent information on the Spanish property market. My site focuses more on Spanish law and Spain property laws than property prices as such.
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