STUNNING PROPERTY FOR SALE WITH WONDERFUL VIEWS OVER THE LA SAFOR MOUNTAINS, VALENCIA
Recently, I have seen a flock of articles about buying Spanish property – many of which, frankly, look like barely concealed press releases from parties with vested interests in ‘talking’ the Spanish property market ‘up’.
Meanwhile, there have been continued reports about the considerable problems of the debt laden Spanish banks, who are deeply troubled, not lending and now the biggest holders of property in Spain. To compound matters, some international commentators have been saying that Spanish property is due to fall significantly more in value, with some talking of a further drop of 30% or more.
What is the truth to all of this?
Well, firstly, I think it is vital (once and for all) to ‘put to bed’ any illusions about how much Spanish property has dropped in value since the heady days of the 2007 boom – because this is clearly confounding many doom-laden international commentators.
In fact, I suspect that some international commentators have not done their research properly. They seem to be relying upon Spanish government figures, which state that Spanish property prices have dropped by only some 18% since the height of the boom. This is palpably daft and a crass and irresponsible fiction, maintained (probably) by the Spanish government to protect the balance sheets of Spain’s banks and their lunatic exposure to property related debts.
The truth is that Spanish property has already dropped some 35% – 45% in value since 2007, with some property values having fallen even further than that. Indeed, average prices may now equate to those of around 2003/04 and are probably bumping along at, more or less, the lowest they are likely to fall.
Does this mean that buying Spanish property now is advisable?
Well, there are, undeniably, some astonishing bargains on the market at the moment. Indeed, the prices of some genuinely fine properties are now unimaginably low. These have clearly brought international buyers back into the Spanish property market and these have been ‘snapping’ up property in a way not seen for some years. Indeed, 2011 saw a 27% increase in foreign buyers compared to 2010. This is a significant rise, albeit from a very low base, and indicates that property in Spain is now finally providing value for money – in a way that was well and truly lost during the latter years of the absurd property boom.
Of course, low prices do not, by any means, always indicate a bargain and great care still has to be taken, if you want to buy property in Spain.
Indeed, a significant number of the approximate 3 million properties for sale in Spain should not be touched by foreign buyers with the proverbial ‘barge pole’, for a number of reasons. In particular, care should be taken with some poorly constructed, new build properties situated in clueless locations, inappropriate to both foreign and native buyers. Some of these are virtually valueless and will remain so, possibly, until they collapse (never inhabited).
However, ‘defective’ properties aside, a wise and careful buyer of Spanish property (particularly one with cash) now has tremendous bargaining power and the opportunity to negotiate hard for a fully legal and excellent home in a prime location. In truth, tough negotiating should lead to a purchase price low enough to absorb any possible further 5-10% drop in Spanish house prices.
Cutting to the ‘chase’ – would I come and buy a property in Spain now, if I was back in the UK?
The truth is that I probably would, for two principal reasons:
Firstly, without doubt, I know that I could find a superb, genuinely sound property in Spain, for a bargain price, in a situation that suited me. Of that, I am completely confident.
Secondly, I recognise that time, for all of us, is unkind! It disappears fast and there is only so long that any of us can live in limbo and put off doing what we really want to do. So, with life getting ever shorter, I would balance financial caution with maximising my life’s experience and ‘make the move’ and buy in Spain.
After all, most people do not buy property in Spain to make money (or to lose it) but to improve their overall quality of life, as soon as possible. That should be uppermost in anyone’s decision to buy property in Spain and the driving force (as it was for me) – unless they are professional investors!
The only ‘spanner’ lying close to the ‘works’, needless to say, is whether the Eurozone will collapse, with Spain being forced to re-embrace the Peseta. This, of course, would massively devalue property in Spain (and could devastate any investment).
However, I doubt that the Eurozone will collapse. It is just too big and far too important for that to happen, with the whole Eurozone now so deeply intertwined. Amidst this, of course, lies the Spanish economy, which is a significant part of the whole.
So – is now the right time to be buying Spanish property?
I am not sure that it is the ‘right’ time necessarily and I think it is probably wrong to stress that too enthusiastically – but I think it is probably about as good a time, for the cautious buyer, as any…
Nick Snelling – Culture Spain
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Excellent property for sale Gandia and Valencia region
Nick, that’s a sensible and measured conclusion, m’thinks. As yer old china GH has it, “find something you like at a price you are happy to pay – buy it.” That’s the stage it seems to be at, now.
As for the Eurozone not collapsing – I’m not convinced that there might not be a partial collapse, a Eurozone of the core countries that have been wearing the white hats and the banishing to the abomination of peseta, punt and drachma desolation of those which have been wearing the black hats.
I think that those who are minded to retire to Spain, those for whom Spain represents an easing down through the gears in a congenial setting + golf – I’d sit on my hands. Tho’ the bargains are doubtless out there, the macro-economics are too scary.
The Greeks are umming and ahhing as we speak. The abyss awaits. The Greeks had a military junta into the ’70s. The present moderate version of that political p.o.v. is standing out against bending both knees to the finger-waggers of northern Europe and the IMF. “We’ll take Hell and the drachma over your Euroslavery.” Spain and Portugal will see the same if they are pushed to the brink.
As for those who have A Plan and see Spain as another, more attractive milieu in which to engage in their schtick, I agree that now may be the time to take a mallet to the piggy-bank. I’m of that mind, as it happens.
ADDENDUM
I went from this to a story out of Bristol on BBCi. The City of Bristol is launching it’s own currency.
This is no Totnes-style hippy-dippy number. In Totnes, the currency is in the form of barter tokens – I mend your dripping tap: you give me two shiatsu sessions.
It is underwritten by Bristol Credit Union, which is a bank regulated by the FSA [one of my present lodgers raised funds to move here from BCU] and has the approval and cooperation of Bristol City Council, to the extent that business rates can be paid in Bristol Pounds, so no trader need worry about being stuck with Brsl£ that his suppliers will not take.
The idea is to keep local money circulating locally.
There’s something about this scheme that appeals to me. But perhaps there already is such a scheme in Spain as a whole – the black economy. It just happens to run on the same currency as the legit economy
My personal experience of buying an off plan property in Spain and the corrupt relationship between developers and the courts that allows them to deliver nearly two years after the completion date in the contract without any comeback means that I would advise all UK citizens to find another country to buy in. Under no circumstances in any market buy in Spain!
We followed all of the advice provided in this guide – Contract with specific delivery dates, Bank Guarantees etc our barristers believed we had a very strong case – the developers didn’t bother to turn up for the first hearing and yet the courts still rule in their favour …..my view of the Spanish being genuine honest people has been totally tarnished.