PROPERTY FOR SALE GANDIA
I saw an interesting article in the Euro Weekly News today, the contents of which deserve comment. The article revolves around the Spanish property crash and the number of properties for sale in Spain.
According to the Spanish economist Ricardo Verges, there are some 2,320,000 new houses for sale in Spain – a number that is nothing less than breathtaking. Indeed, as Ricardo Verges points out, Spain’s economic problems pretty much centre on property debt and the lunacies of that self-inflicted debt, which accumulated during the boom years. There is no secret there, but the sheer scale of the problem is truly astonishing.
What makes Verges’ calculation important is that it has been done on the basis of what appears to be sound maths. In short, he has subtracted the property purchases from 2004 to now – from the building permits granted since 2002. The two year gap between the granting of the building permits (2002) and the purchases (2004) is no doubt an allowance of two years to complete the building process of the initial permits. This, it seems to me, is a sound assumption.
Of course, no-one knows exactly how many properties in Spain are for sale – least of all, I fear, the Spanish government. The latter’s figures, when it comes to housing matters, are notoriously unreliable and their claim that there are only(!) 688,000 new houses for sale in Spain needs to be taken with a ‘shoveful of salt’ and are, I suspect, firmly trounced by Ricardo Verges’ new calculations.
The worrying thing is that articles about the Spanish property crash often only restrict themselves to the amount of new properties in Spain that are for sale – when this factor does not take into account how many re-sales are also on the market. Certainly, no-one (including myself) has the remotest notion but this has got to be a million or more and is probably rising daily as the economic crisis takes its toll.
So, are we looking at potentially 3,300,000 + properties for sale in Spain? Probably.
That said, most commentators, subscribe to the view that the Spanish property market is far too complicated to paint it all as a 100% bad place to buy property. There are segments to the marketplace that are in demand and that will continue to be ‘good’ buys – on anyone’s account.
Equally, there are large parts of the market that are viable but that need to be looked at very carefully (if you are a buyer). Finally, there is a sizeable part of the overall Spanish property market (particularly some new builds and astonishingly stupid new developments) that I doubt will ever sell…
RELEVANT INFORMATION:
Spanish property and the economy in Spain
HOW TO BUY SPANISH PROPERTY AND MOVE TO SPAIN – SAFELY
(80,000 words, 327 pages, 26 sections and 9 expert contributors – e-book 14.96 euros)
Another surperbly informative hypothesis by author, Nick Snellling.
What surprises me in Spain (when compared to North European countreies) is that therte is a drought of quality Government and Private Markert Research available in what was and still is a key component of the Spanish economy.
The Spanish statistical office information is one source for some market information but its not enough to plan a serious market campaign.
It occured to me that maybe the imeasurable ‘Black Economy’ here has some bearing on this?
The result of the previous crazy property boom in Spain and the escalting prices and desires to have a slice of Spain is all too prevalent now in the number of properties, both new developments and resales, on the market. Those that are stuck and can’t move, I have a relative who has tried to sell them house in Spain for over two years with no buyer in site. Makes me wonder how they (Spain) going to get themselves out of this stagnant property situation?