Spanish property: the fiesta's over

[mambo]

Polaris World invites you to ‘live the dream’ at its gigantic golf resorts. But as the market sours, is it turning into a nightmare? Miles Brignall reports from Murcia

It’s the most audacious private property development Spain has ever seen. In the semi-desert scrubland of Murcia, a series of gigantic gated communities set around Jack Nicklaus golf courses accommodating tens of thousands of people - predominantly British expats - are nearing completion. The fairways are immaculate. Pine trees tower over perfectly manicured lawns. As new towns go, it’s more Poundbury-by-the-sea than Harlow-in-the-sun. But are investors, who snapped up properties, now facing meltdown in the heat of Spain’s worst market slump for decades?

More at guardian.co.uk/money/2008/ma … d.property

[BrendanG]

Most of the British who have bought at Polaris World did so off-plan - putting down small deposits and then making staged payments. Some bought in the style of buy-to-let investors who piled into new-build flats in Leeds or Manchester. Loaded with super cheap euro loans, they frequently agreed to buy two or even three homes - in some cases hoping to profit by flipping them at a higher price before they came to completion. Today, many of those hopes look unlikely - with some buyers wanting nothing more than to get out with their money intact.

More concrete was mixed in Spain last year than anywhere else in Europe. More homes were built than in Germany, France and Italy combined. But as the credit crunch bites, estate agents are reporting price falls of as much as 60% and a wave of repossessions.

Fears are growing that Spain’s property boom-and-bust will turn into Europe’s version of America’s sub-prime housing collapse and leave banks with a second wave of mortgage write-offs.

[Gatelodge]

Only sellers who are prepared to be realistic are finding buyers.** People come into my office saying they would like to put their property on the market, but when they name their price, in most cases I now tell them to get out of my office because they are wasting my time.
**

Irish EAs take note.

[yoganmahew]

Really Debbie? Those desperate to sell are lowering their prices to get a sale, but prices are not falling because in general asking prices are not falling? But the owners are open to offers?

So what constitutes falling prices? Asking prices? Repossession rates? Or actual sales prices?

[spqr64]

Debbie in Citrusib said

Agents may be reporting 60% price drops in some areas, but here on the North Costa Blanca, we are not experiencing huge reductions in prices.

I think the word Debbie may have left out is “yet”

[Canny_Scot]

I’m just back from a driving holiday in Northern Spain. One person we were talking to in Bilbao said that apartments were as much as 600k for 2 beds, but that the average wage was €1000 a month, so no one could afford to buy, and that rents were too high so a lot of people were staying with their parents into their 30’s. Bilbao around the Guggneheim is like a building site at the moment, with more apartments going up.

Around the northern coast, you can see huge levels of apartment and house building in really small towns. Reminded me of the situation at the moment in Gorey (albeit sunnier, with better food), although I think a lot of the apartments might be targeted at the holidaying spanish not overseas tourists or buyers.

[xman]

@citrusib

Agents may be reporting 60% price drops in some areas, but here on the North Costa Blanca, we are not experiencing huge reductions in prices.

Patience Debbie, patience…

The game’s up you know. Didn’t you get the memo?

Anyway, what do you care? If prices do come off by 60% then property will become much more affordable and people will start buying again.

So you should be cheerleading the crash.

[BertieBasher]

@citrusib

Agents may be reporting 60% price drops in some areas, but here on the North Costa Blanca, we are not experiencing huge reductions in prices. Many owners are not lowering their asking prices and although open to offers, the advertised selling prices remain very similar to last year. Obviously there are a number of properties where owners are desperate to sell, mainly to return to their home countries, but on the whole it is completely different market to, say, the south Costa Blanca where people were able to buy cheaply and needed to make a rental income to cover their mortgages. We also suffer relatvely few repossessions in this area, compared to some others.

What waffle. My wife is from Barcelona and all her familly and friends are from and currently live in Cataluna. Many are directly involved in property while others own investment properties. It take on average 2 years to sell a property on the Nothern costas and all her family and friends who know are saying exactly the same thing. i.e. Nothing is selling. Not a dickie bird. The prices will have to drop to below half before anybody goes back into the market. As in Ireland these is a stand off. Buyers are point blank refusing to buy and sellers are slowly reducing prices but getting no bites.
As Xman says you haven’t thought this through have you? If you want to start earning commission again then you have to sell property.
You have decided to come onto sites like this and try convince people to enter a massively over priced market. Instead you should be talking to sellers and explaining reality to them. Your profession is in even bigger trouble than Irish EAs. At least in Ireland people are buying a place to live and some have no choice but to buy. In Spain on the costas people have a choice and their choice is not to buy. I’d start looking at waitressing or something. Puede hablar espanole? Si no, podria volver a mi pais.

[spqr64]

Bertiebasher said

What waffle. My wife is from Barcelona

Ahhh Barcelona, Placa Catalunya, a table outside the cafe, a black coffee and a Cohiba watching the world go by, now thats living.

What brought you back to this place BB? Jaysus Im gettin worried about you.

[BertieBasher]

@spqr64

Bertiebasher said

What waffle. My wife is from Barcelona

Ahhh Barcelona, Placa Catalunya, a table outside the cafe, a black coffee and a Cohiba watching the world go by, now thats living.

What brought you back to this place BB? Jaysus Im gettin worried about you.

I’m Irish and all my familly are in Dublin so realistically we had a choice between Ireland and Spain.

Software developers are not appreciated in Spain so salaries are very low.
As an example an experienced developer would get 30,000, this is not enough to live on. The economy is underdeveloped they focus mainly on manufacturing stuff very little services, hence the unapreciative attitude to anything software.
TBH I would prefer to live in Barcelona but the property bubble has really f**ked the place up. We have multiples of 10 time salary for a house. In Cataluna it is 15 times or even more. 50 Year mortgages are common.

Given a few years and the complete collapse of the property market things will improve. At that point we may move there. My two kids speak both Spainish and English perfectly so the move will be easy. My wife talks to them in Spainish and I talk to them in English, they respond in the language in which they were addressed. They also spend the whole summer there with the familly so this reinforces the language. This property bullshit has hit us on two fronts. We would have liked to have a place in Spain close to the familly but we can’t/won’t due to inflated prices. (In Ireland we rent for the same reasons.) It’s not too bad though cause the kids are very young now so they don’t notice the pain in the arse of staying with the relatives for the summer. And with the way things are collapsing in Cataluna we should be able to get a gaff in a year or two.

[spqr64]

BB we have a place about half an hour from Malaga bought 20 years or more ago by my in-laws as a holiday pad and its great because its in a village and not near any of the madness called tourism, but over the last year or so I have had reason to visit Barcelona at least 4 times and find it a very nice place to be with a great atmosphere and genuine people.

I would go so far as to say I certainly prefer it to the coast because you have the restaurants, shops all the museums and buildings with Dali and Picasso influences not to mention a very obvious police presence which is always good and too numerous to mentions distractions for kids. I envy you if you move back there as I couldnt get my other half out of Ireland with a shoehorn.

[yoganmahew]

BB & spqr (are you in the gloaming?), be thankful you are not in Helldorado! From the Daily Mail (and before any of you jump in, it was pointed to by Mish - I clicked on the link in innocence. Having sullied my eyes and being unable to say ten hail marys (not a PD voter any more - too left wing) I decided to expurgate my sin by sharing it):
dailymail.co.uk/pages/live/a … ge_id=1811

Here in Southern Spain, bitter expats talk about “Helldorado” - paradise that has mutated into a nightmare.

Tumbling property prices, a glut of new properties still flooding onto the market and rising Spanish interest rates are taking their toll.

Added to this, illegal building practices mean that 100,000 coastal homes are now under threat of demolition.

And to make matters even worse, the pound has fallen almost 12 per cent against the euro over the last year, leaving many British residents even further out of pocket.

“It’s heartbreaking,” says 59-year-old Daria Langrish, whose apartment has been on the market for the past year.

She and her partner Rod bought it three years ago for £147,000.

A year ago, it went on sale for £195,000.

Today, it is on offer for £143,000 - with all its furniture.

“We can’t believe how hard it has been to sell,” she explains.

“We bought our flat three years ago hoping to retire here. The plan was that we would sell our home in England and move out to Spain, but after my mother died we promised we would care for her elderly sister, which means we have to stay in London.”

Like many Brits, she and her partner bought the flat after remortgaging their home in New Southgate in North London.

“We can’t afford to keep both places on indefinitely. It just costs too much,” she says.

"We never imagined it would be this hard to sell.

“Everyone tells you that property in Spain is such a safe investment, but that’s just not true any more. I’ll be grateful if we can just break even.”

“Everyone” is going to take a caning when the Daily Mail catch up with them harrumph