Imogen Calderwood
PRICES of properties in Spain are bottoming out, according to the International Monetary Fund (IMF).
The report claims there are a number of reasons for predicting an end to the slump – besides the observation of real data.
One reason is that analysis of past crises suggests devaluation tends to last between five and seven years.
The IMF report also recommends measures to best deal with the situation in Spain.
These are to reactivate construction through supporting rental activity; undertaking tax reforms to increase purchasing power and making it easier to handle high levels of mortgage debt.
Welcome back Olive Press online!
Whilst I don’t think Spanish property is a good investment when you factor in such high transaction costs, oversupply, and other factors like illegal builds etc, perhaps the seemingly better Sterling/euro exchange rate will help somewhat and may attract more British buyers to buy to keep rather than flip.
On the negative side of this will mean Brits trying to sell will get less sterling for their properties.
Prices are low – add in the fall in fuel prices and a weakening of the Euro, and you’re going to see growth return to many European economies (actually both Ireland and Spain are already there). Draw your own conclusions – the tide always turns at some point.
“The tide always turns” doesn’t sound like a coherant recovery plan, more like a “we haven’t got a clue what we’re doing, so we’ll just have to wait and see” type plan. This is my conclusion.
That has been Frankfurt’s policy for the last 5 years!
The way the UK pound and Euro exchange rates are going it may give a welcome boost to the property markets in Spain.
It may give a small boost to the market in tourist areas but I don’t feel there will be a rush to own there after all the bad publicity. Though you can never tell. Some people still fall for timeshare HaHa.
Looking at websites and even place in the sun that has been on recently it is hard to see properties going much lower otherwise you would be giving them away and with the euro going down I expect you will see many more properties selling but with oversupply and houses being knocking down I don’t think you will see the likes of the past boom. I think the only plans the Spanish have is for the authorities to keep lining their own pockets and hope the problems fix themselves.
Property all over the world is still way overpriced – thanks to Greenspan at the FED in the 90’s and QE since 2008.
This summer here in the Aveyron, I could have bought a well built post WW11 house down a leafy lane with 2000sqm of garden for €75K. Anywhere in S E England in a quiet location but with amenities just down the road it would have been over 350K, oh yes should have mentioned, caste iron legal and no noisy neighbours. I did’nt because I can design and build a superior house precisely to our requirements. I’ll bet if this house had been Spanish it would have been on the market for €150K at today’s prices.
It makes me laugh to see UK property being shilled by so many – the prices are ridiculous and when the economic elephants start larging it the fall will be spectacular, like 1974 & 1990 only far worse – strange how so many have short memories or maybe just the greed factor kicking in – again.
Syriza/Greece – is this the first domino to fall. If it does then Spain/Portugal/Italy will not be long in following. The Euro was flawed from the beginning and Germany was allowed to be too dominant. If the Greeks give the international bankers the finger especially after Draghi (Goldman Sachs bitch) went mental with massive QE – better to be renting methinks.
For the doubters – history does have a way of repeating itself.
‘The tide always turns at some point’ says GiveusaquidEnglishdampsquibEnglishdragon etc etc who has been saying that for years on other forums, this tide has supposed to have been turning for the last 7-8 years so far. However, what can stop tides turning is often beyond anyone’s control, who can predict how the Greek problem will impact on the other Club Med countries? Plus the Eurozone deflation now.
The only good thing for Brits thinking of buying is the strengthening of Stg against the Euro!
Prices couldn’t really go much lower and the falling euro will help but will anyone have the confidence to buy in Spain? It always comes back to the same thing, they need to create workable property laws and until they do, the market will always be stagnant at best. The demolitions mostly affect rural properties in Andalucía but this scares most people off and they don’t bother to look any further and that is why it affects the entire Spanish property market. The more pessimistic buyers will worry that the euro will collapse completely and will want to wait and see what happens before committing their hard earned money.
I think the demolitions have not so much put people off but made them a lot more careful about what and where they buy. The current climate may put investors off if they are looking for a quick euro. If people are looking for somewhere permanent then if what they buy goes up or down in value it does not matter. The house is the same if you bought it for 10 but it s now worth 100 or the other way round you paid 100 but now it is worth 10, it is still the house that you wanted.
I know which position I would prefer. There has been blips in the UK market but nothing so drastic as what has happened in Spain. 12% or more on costs is also a deterrent for Spanish property. I am sure the tide will turn one day but it won’t reach the heady days of 2002. Just a trickle.
It’s not just the growth in foreign interest that will raise the Spanish market. The economy is already turning around – worth looking at William Chislett’s analysis. He acknowledges the crash stats but then quotes de Guindos “We have now had growth for six quarters, job growth is faster than expected and tax revenues are on the rise. Spain is outperforming its peers in Europe and, according to the European Commission, we will continue to outperform this year and next”. Of course the lower rate of the Euro and lower cost of fuel will help all countries. I’d like to be agreement with Stuart (based in France but critical of posters here who travel between Spain and the UK) that the UK market is due an almighty correction – but when will it be? Could be many years yet of market manipulation.
Just a fact that confirms the housing market is turning around (and annoys the negative brigade here). The November mortgage numbers for Spain are out – and they rose 14.2%, continuing a six month trend of rises.
@GUAQ,EDS,ED you have been saying this for years on other forums, the law of averages says you might get some of it right one day however you neither own property nor live in Spain as many on here do including me. Perhaps the Spanish propaganda or your pals MS and GH pay you to keep putting out your spin which is often misleading to others.
For some bizarre reason you don’t appear to notice the Greek problem and it’s already huge gathering effect on Podemos which if it escalates could affect the whole of the Eurozone including Spain. Pablo Iglesias is a close ally of Alexis Tsipras and this contagion could spread to more Euro countries. If the worst came to the worst and countries exit the EU and get some or half their debts written off what effect do you think this will have on property and other asset prices, they could further drop considerably.
The UK market is nothing like Spain’s, you don’t understand the simple logic of supply and demand, even if the UK’s has a correction, it will never be in the magnitude of Spain’s because of this. Many EU citizens are moving money into the UK whether in deposits or assets, as are the Chinese and others.
Even Campbell D Ferguson wrote in 2011 of the potential effect on Spanish property prices falling again if Spain exits, however since then the Eurozone has a series of sticking plaster repairs which so far have not stuck for good. How risky is that for buyers from the UK especially?
A property in Spain now, is for life potentially, and not to make profit for years, it cannot be viewed other than to live or to own for holidays.
I would advise others to hold off for a while and see how the Greek tragedy pans out for Europe first. Anyone who bought Spanish property pre boom, and then bust as we did can sit this out if needs be and it makes a for good holiday as and when.
Spain’s economy seen entering a ‘virtuous circle’. That is the headline you’ll see if you look on economic journals for news on the Spanish economy. Export growth up, general economic growth up – and things are destined to get better as the impact of a lower Euro and lower oil prices feed through. Look at the facts – don’t listen to the same old doomsters who told you Brit expats would be evacuated, Spain forced to leave the Euro, Spain’s borrowing costs to go ever higher. They’ll keep denying the facts from now on, but hardly worth listening to them. They may even kid you Tesco was a good buy last summer! ;)
Quidy do you live in Spain? Have you seen the devastation where some pueblos still have over 30% unemployed and all local businesses have closed down. It will be a long time before the situation gets even slightly better. Expats in business on the Costas have lost their life savings.
@GiveusaquidEnglishdampsquibEnglishDragon If I was to list ALL the aliases you post under and ALL the websites you frequent it would likely blow people’s minds, you constantly talk up Spain without mentioning the other important facts. If anyone had believed you years ago they would be seriously losing money, even you with your Spanish/Euro start-ups couldn’t make your little bookshop work in Madrid but now trying it again from a miniscule shop in London. So when the OP was off-line back you went to SPI Jianlin topic didn’t you, you fool no-one!
Stop trying to mislead people into making more mistakes in Spain, oh and what’s Tesco shares got to do with Spain? A Troll is one who tries to hijack threads
I also read the “”virtuous circle” stuff. A bit has been missed out when the IMF added the However. It said high unemployment and the rise of populist parties could threaten recovery. Let’s have the full story pleese.
Another fact the doomsters will never tell you here. Auto exports from Spain in December UP 17% y/y. All analysts (whether pro or anti EU) now accept Spain will be the biggest growing economy in the Eurozone this year, baring a major jolt to the system like a sudden rise in oil prices. And is anyone seriously suggesting tourist numbers are falling? Stick to facts and acknowledged trends, regardless of the ad-hominem attacks that the trolls use when their arguments fail.
Tourist numbers are up but it has made little difference to employment. Many are on 8 hour contracts or EU funded employment schemes.
Auto exports and house prices, can you go off-topic any more than that Squiddy? lol. Spain is nowhere near sorting out its never-ending planning disaster. Meanwhile, demolitions continue, evictions continue. Anyone who tells the truth of Spain is labelled anti-Spain or a “doomster”. Beware astroturfing trolls like the Squid; doublespeak is their dialect.
I pity anyone who unfortunately is fooled by EDS,GUAQ,ED and all his other aliases. Without a doubt someone who has that many aliases on different websites (3 at least on here), plus constantly takes subjects off-topic is the work of a Troll. He has been doing this for years elsewhere.
Back to the subject. The information and warnings given here from those with experience, those who have bought or still own property in Spain in the light of often misleading agent and property website hype is for the benefit of those who are undecided and unaware of the pitfalls and scams.
The troll EDSGUAQED has not owned property in Spain, he snipes at those who warn others from his London hideaway whilst dumbing down UK property and success.
There is still a possibility of repercussions due to the Greek tragedy and their coming together with Podemos in Spain and one should see how this pans out first.
Oh dear, so many can see the truth of the Spanish housing market but not back home.
In 1974 when so many of the secondary banks collapsed, houses dropped by over 50%. On the South Coast in 1990 some prices dropped by over 60%.
The coming ‘drop’ in prices will most definately not be a blip. The fact that not joining the ludicrous introduction of the Euro was so right but it won’t matter if Brussels and the IMF cannot bully Greece into submission. Do not forget that since the fall of the Greek Junta in 1974, only 2 parties have overseen the total corruption and lack of any taxation by the Greek rich (shades of the UK?). Now there is a change and ordinary Greeks have voted not to pay back the German and French banks because they are the ones to take the fall.
The IMF and Brussels knew full well that Goldman Sachs did a number on Greek finances to get them into the Euro and now ordinary Greeks know as well.
Europe is in recession and talk of growth in Spain and the UK is simply shilling, that’s why Draghti, Goldman Sach’s man at the EB is driving that German woman mad. So many possible nightmare scenarios are waiting in the wings – interesting times for those outside the danger zones – property and business.
Anyone who wants to read a balanced analysis of why Spain’s economy is predicted to be the fastest growing in the Eurozone this year, should search for “william chislett spain and greece” to see his latest article. It’s not just de Guindos who says “The recovery in Spain is undeniable” – you only have to search on “Spain enters virtuous circle” to see that Spain now has higher growth than its neighnours like France or Italy. Of course commentators like Stuart in Burgundy France, or Frances in Kent will try and discredit those who try and open your eyes to the facts. But ask yourself this – how has the mortgage market increased for 6 months in a row, if it wasn’t for the fact the economy is clearly turning a corner?
@Stuart The demographics of Spain and the UK are completely different, The UK’s population for a start is 17 million larger yet the land area is less than half. The UK’s population grew the fastest in Europe last year, people from all over Europe know they can get jobs there including the Spanish youngsters and with other economic migrants everyone needs a rook over their heads, and there are not enough roofs, there is a shortage of property in the UK. The complete opposite of Spain where there is a huge glut of properties for sale.
The year 1974 was over 40 years ago and things have changed considerably worldwide not least the UK making the right decision to stay out of the Euro mayhem. The UK has the City of London still reckoned to be the main financial centre.
After the recent worldwide financial crisis the UK’s property market has boomed, and even though it is due for a correction the supply and demand factor will underpin it far more than the Spanish and other Club Med countries’ property markets. The UK is more regulated than Spain, average property transaction costs are infinitely lower than Spain’s, taking matters to Court does not take 5 years or more for the fraudsters to be up and away.
Anyone who wishes to protect their investment and see increases has done far better in UK property and I suspect this will continue, after all, just to break even in Spain you need a price rise of 20% alone.
It’s all about supply and demand!
Everyone does not need a rook over their heads in the UK it would increase the risk of being shat on, there are too many rooks and not enough roofs! Lol
Good post Mike and I would say that pretty much sums it up. Supply and demand does not just fall out of the sky, you must have the right foundations in place in order to create it and that means being business friendly, encouraging inward investment, not taxing people to within an inch of their lives and having workable property/employment laws. A functioning property market creates economic activity and by that I don’t mean very wealthy people spending huge amounts of money but lots of ordinary people spending moderate amounts of money.
Spain’s economic policies have failed because they never learn from past mistakes but instead wheel out the same old policies hoping to get a different result. The euro was a massive mistake and thank God we didn’t join it but that is not the whole story. Their bad economic policies and unworkable properly laws (deterring foreign investors) have led to a shrinking population and this has seriously impacted both the property and employment markets. They need to do far more to encourage multi-national companies (like Carrefour) to expand into Spain which would create some much needed jobs and in turn boost the property market. I think the new reduced self-employed stamp will help and also the lower petrol prices are very welcome but much more needs to be done.
Marion, the dead town you refer to is yet another victim of poor economic policy and the brain dead actions of the Junta de Andalucía and their program of demolitions. The whole place is going in the wrong direction and people are leaving, nobody is replacing them, new business start up figures are too low and people are going abroad for work, it is a road to nowhere.
You can only have a functioning property market if you have a functioning economy.
Latest retail figures for Spain in December are out – UP 5.4% year on year. Whichever figure you look at – mortgage approvals, creation of jobs, numbers of foreigners investing in property, exports – the figures are showing stronger growth. Sorry doomsters – your narrative is out of date. You can whinge all you like – the facts tell the true story.
How is it you missed the most important. Unemployment in Spain rose in the 4th quarter. Do you think there is only you who can read.
Seasonally adjusted unemployment fell in the last quarter – from the Wall street Journal “However, the number of people employed rose by 65,100—the first increase in any fourth quarter since 2006.”, and overall it fell throughout 2014. The fall is expected to be far greater (great news for Spanish jobseekers) in 2015. Again the facts!
The Sur in English this week published an in-depth article about the massive foreign exodus from Spain in 2014. Tells you all you need to know, namely that Spain has lost its attraction to foreign buyers, bo doubt because of its continuing planning disasters, corrupt ways, non-existent justice system, draconian laws and its continuing bleak outlook.
It’s best to ignore the EDS,GUAQ,ED,DBM,SDL,RN,MN, ETC ETC posts as he continually takes topics off-piste, whilst calling those who post what he considers negative as doomsters. He’s well known on other forums for this, he needs feeding as trolls do and deliberately leads others to enter into argument. This topic was about property not what he chooses.
Possible Grexit mixed with Podemos hoping to follow suit, huge glut of properties in Spain, too little demand, illegal builds, exorbitant transaction costs, unregulated market, land grab, crooked mayors and town halls, even many poorly built, same properties on at different prices with different agents,
etc plus the knowledge of many on here, should be a warning to those thinking of buying for investment as opposed to buying to live in Spain.
For a while I thought of buying a cave house (the only decent property in Spain) in Guadix to spend the winters in as my partner Angela has developing arthritis and osteo problems, knowing how healthy and dry the winter climate is but all the legal problems soon put an end to that idea.
I think it is the legality question that deters many. There are other factors too. The coastal areas aren’t what they were. There are many more nice places in the world where you don’t risk your life savings.
What is it with all this propaganda from Quiddy. Does he really think people are going to rush out to invest in property because of retail figures increasing or a few cars sold. Expats are probably better off living there in a recession, unless they want to sell or are a sales agent.
I think that Spain may well show positive figures in certain areas of its’ economy but I would suggest that even if we believe them (Spanish economists/politicians manipulating the figures for their own gain? Surely not!) they are not representative of the country as a whole. The good times may be returning to Madrid and Barcelona but certainly not to Malaga and Seville.
The Euro should have been at 1.40 ages ago but was falsely held up by Brussels/Germany et al. If they suffer another blow they won’t be able to hold it steady and tourism might be their only economy then.
Suits me as I am a renter in Spain and an earner in sterling. I’m alright Jack!
@ squidgy. You say it is good news for jobseekers in Spain…why? Unemployment rose in the 4th quarter from 25.98% to 26.03%. Figures from the Office of National Statistics. However much the Spanish media trims it up as seasonal it is still dire and still an increase. Just google “Unemployment rises 4th Quarter Spain” all the fist page seems to be saying what I am saying.
Sorry, I got the wrong figures there. I forgot we had moved on a year HaHa. But they are UP.
Why can’t we edit on here?
Most of the talk up Spain sites seem to have missed this one.
According to JP Morgan investors don’t think Spain will exit the crisis until 2018. 57% of investors think the same. Only 16.8% think unemployment will improve in the next few months.
The figures for 2014 show that in fact foreign investment in Spain surged in the first 9 months ($6 billion, up from £4.7 billion for the same period in the previous year – we don’t have the full years’ figures quite yet). Major investors like Wang Jianlin, Carlos Slim and Zara’s Ortega have also decided to buy in Spain. Based on this, and the weakening euro, we can expect to see investment rise still further in 2015. Probably best for an informed observer to get the facts from websites like SPI or IbexSalad2 to see what is actually happening – rather than the doomsters’ wild claims here that inevitably prove to be mistaken or based on figures 1 or 2 years ago.
Here he goes again Give Us A Quid English Damp Squib English Dragon DBMarcos99 and all his other aliases, now trolling suggesting websites as above, the first of which the site owner self confesses he makes his money from agents and advertisers so somewhat biased there. If anyone had acted on some of that site’s experts opinions 5 years ago their investment dropped like a stone.Informed website don’t make me laugh Ha ha ha He has a blinkered mind calling those who don’t agree doomsters.!
AS this topic is about property DBMarcos99 Steviedeluxe etc, could you enlighten us all as to whether you recommend buying property in Spain now with it;s current glut, it’s high costs of buying etc and taking into account the current Greek problem and potential knock-on effect with Podemos?
BTW are the above site owners paying you for your skewed spin? Lol Lol
Ahh now the penny has dropped HaHa. The loser who talks up Spain yet couldn’t make it work himself. I should have known, same mantra. SPI is more or less a one man outfit selling property. It’s all about how wonderful Barcelona is.
If your income comes from The UK it is better for Spain not to do well. Cheaper everything. There are cleaners now asking €7 where they were asking at least €11 before the crisis.