Debate rages over Spanish property market

Will the property market ever go back to its pre-crisis booming glory?

LAST UPDATED: 18 Feb, 2015 @ 18:10
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DEBATE is raging as to whether the new year has stabilised the Spanish property market.

BBVA predicts one million new jobs for Spain
BBVA predicts one million new jobs for Spain

A new report from Fitch rating agency suggested property prices will stay at 40% lower than the pre-crisis peak, with the market bottoming out.

Vozpopuli, however, said that to expect property prices to recover is to live ‘far from reality’ and believes the sector will never return to its former glory.

It reasoned that with an aging population and almost five million houses for sale, under construction or empty, Spain must be realistic.

Meanwhile, Spanish bank BBVA predicts economic growth of 2.7% this year due to falling oil prices, and foresees demand creating one million new jobs in Spain.

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35 COMMENTS

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  1. Debate ? – what’s to debate?? On one side we see: much long term publicity about homes being illegal, actual & threatened demolition, town officials indicted for “errors” on property building decisions, much disagreement/stalemate between town and regional governments over resolution to legalize/regularize new homes, new builders/developers declaring bankruptcy with un/part built new homes, banks foreclosing on some 5 MILLION homes now for sale at bank’s discount price, no conclusion on legal action on most town officials/estate agents/abogados/notarios involved, virtually no new home building.. et al. On the other side: sales increased over last year – but at what average price compared to original Asking Price?!
    Of course “sales are increasing” mostly due to Banks selling foreclosed homes at their bank mortgage price and the 5 MILLION UN sold homes are depressing sale prices. My forecast – unless you buy existing home at prime location (front line beach, front line golf, prestige urbanization, etc) you get a “bargain now” but wait a L O N G time to get back to yesteryear.

  2. I completely agree. Anyone interested should look at historic property curves. Spain rises far above any other country’s rate of change then dives back to the sort of prices that would have been in line with price rises in other countries had it not diverted upwards so spectacularly from the wider trend. This suggests to me that what went previously was indeed a bubble, what is seen now is a resumption of normal and rises will be in line with anywhere else in EU ahead. (up to 5% but no more). I have just bought by the way ;-) Long term. Realistic. Warm winters. No mega bargain.

  3. Looking very much like the property market will recover sooner than expected – led by a stronger economy. improved mortgage lending, and a continued growth in foreign investors attracted by low prices and a lower euro. But the big question is – will rents start to increase?

  4. An interesting article by William Chislett on Real Institute Elcano, on Why Is Spain Recovering Faster than Expected? Seems a lot of it is down to easier finance, labour market reforms and lower oil prices. “The upturn in domestic demand, traditionally the engine of growth in Spain, reflects the easier financing conditions resulting from the European Central Bank’s monetary policy interventions, greater investor confidence, labour market reforms and lower oil prices, all of which is spurring growth after three years of recession (which ended in the fourth quarter of 2013) and seven years of adjustments since the bursting of the massive property bubble in 2008.”

  5. GUAQ, you’ve extracted your 1st line directly from another website under your SPI name of DBMarcos99 !!!

    It’s rubbish for you to say ‘recover sooner than expected’ when you and Sucklin have been saying the ‘bottom of the market’ and the ‘market recovery’ had been reached 5 years and longer ago. You’ve also been told that ‘one day you might get something right’ of a sort. Remember Sucklin invited so called property experts all that time ago and these turned out to be estate agents who got it completely wrong Lol

    There is no big question about rents increasing, it’s you going off-topic again.

    Based on your post, and the fact that you neither own nor have never owned Spanish property nor do you know the CDS, I’ll ask you again:

    Do you advise people to buy Spanish property now, and what are your credentials to give investment and or business advice appertaining to Spain?

    Also, why do you have so many aliases to post on this site (3 aliases) and on other sites (lots more)?

  6. More crazy allegations from the trolls! Strange they seem so keen here to promote Mark Stucklin and his SPI site, when they claim to hate it! As I put earlier, it’s very interesting reading the article by William Chislett on Real Institute Elcano, on Why Is Spain Recovering Faster than Expected? Assuming the Euro doesn’t revert back to its raised level, we will probably see a turnaround in the property market this year, following on from the stronger growth now seen in the economy.

  7. Weird comment PG but yes you’re right GUAQ ED EDS DBMarcos99 Steviedeluxe etc etc is a known troll and continually takes subjects off-topic and you’ll have noticed he doesn’t answer the questions about advising people to buy Spanish property based on his non-experience. BTW what’s ‘private investigators’ got to do with this, that’s off-topic don’t you know? Lol

    So, RN, MN, and your other names/aliases would you care to answer the question above about property? Then, I’ll ask similar about your business credentials on another topic PMSL

  8. Mike, I think we know who he is now. The loser who lasted less than 6 months in Madrid and is now offering start ups his business knowledge. Maybe it is on the basis of how NOT to do it.

  9. Crazy thread. I literally just bought (as above) in Adsubia and to repeat I really, really don’t think the economy will do much more than step back in line, House prices included. Anyone who says otherwise is carrying an agenda for sure.

    …To head off the obvious troll question: I’m buying because I want a place in Spain and the houses may go up from somewhere round this level. A entire 2% maybe? (Whoop). Add some rent and that’s just kind of OK by current standards. But the 13% costs of entry and 5% or more of exit – that’s a pretty serious issue for an investment proposition. You need to want some Spain on top of any profit – I am pretty sure on that and maybe at least ten years of it to get level.

    Thats my view anyway. And still in my case enough to buy.

  10. I’m loving the way “Mike”/Angie is giving lectures on identity….almost as though you need to talk down the market and convince people to look elsewhere – nothing to do with Italian estate agents Casa Travella are you? LOL. Stick to the subject and cease your trolling. There are many positive signs that augur well for the Spanish property market – a growing economy, an increase in foreign investors, a rise in mortgages being granted within Spain. If you can’t produce figures that contradict this, then I suppose we all understand why you revert to the trolls’ tricks of discrediting posters and ad-hom attacks. Btw rent levels are particularly relevant to a property turnaround. Once rents start to rise we will see further appetite for house purchases.

  11. I don’t know about all that, but down here near Cadiz the prices are still FALLING. Don’t know about direct-from-bank but the private listings are LOW. The estate agents still have hopeful/false prices in the windows, but if simply say no way they’ll talk 50% off…
    my neighbours house was 320k 5 years ago. Its STILL on the market, now 165k.
    Oh, and new builds are still going up…

  12. squiddy – give it a rest will you. The members of this forum are’nt idiots. 5 million properties, finished or unfinished hanging like a giant tsunami over the market and the typical Spanish mentality as pointed out by BigJon – they are still building more.
    In the real world not the b/s one where you reside rents don’t go up when there is a glut and a huge one of properties to rent – now what part of that don’t you understand.

  13. There are various facts that support the current analysis – that people will be surprised by the speed of the Spanish property market recovery from now on. Property purchases actually increased in November by 25,200 transactions, 15.3 per cent more than a year ago. Jobs are being created, consumer confidence is up, credit is being eased, tourist numbers up (including domestic, not just foreign) and even building activity has increased. According to de la Torre (from the finance group Arcano) the only rational forecast for the residential market is an “upward trend”. Obviously this will differ from location to location. But to try and pretend prices will only continue downwards displays a bigger contempt of the readers here Stuart. Why are prices already rising in parts of Madrid and Barcelona? And as a matter of FACT, rents rose in 2014 albeit by a small 2.6%. According to Idealista “Catalonia leads the recovery as the region with the highest leap in rents, up by 9.8 per cent. Extremadura, at 3.9 per cent, also showed a higher than average increase.”

  14. Stuart you are spot on, not only about forum members not being idiots bearing in mind most of us have either actually bought or still own properties in Spain. Not forgetting that R R Acuna of Madrid was saying it could take until 2020 just to clear the huge backlog let alone all those waiting to come to market. Big Jon also says what more or less what was said on A Place in The Sun the other day, and surprising a 2014 programme. Couple bid £121k for a 3 bed villa with pool in Monda which was on for around £180k having already been reduced from £350k once so there are some bottom sifters around but it’s to live in and not to invest in.

    Out of courtesy I contacted the agent referred to in the above allegation who are looking into the matter, to see if they know who their staff were or are, it looks like a husband and wife team, but their reply was that they would investigate the matter (in case of impacting on them) whether by bad press and/or libel.

  15. The poster who posts as “Mike”/Angie can keep referring to a report last year by RR Acuna- but the tide has changed, Look at reports THIS YEAR by BBVA or Arcano, that illustrate why “The recovery of the Spanish property market will take place sooner than many forecast, and with higher and quicker price rises than the market expects”. Oh, and btw, until you show a bit of honesty and either deny or accept you are involved in selling Italian real estate (thus having an ulterior motive in talking down the Spanish market) I know what I will believe about you. Your smoke and mirrors will be your downfall.

  16. As you’ve completely lost the plot DBMarcos99 GUAQ now, (15 websites inc your tweets and counting) I suggest before your brain explodes that you contact the agent you refer to. Most posters appear to now have you sussed, consists of gobbledygook most of the time Lol

    I debate the Spanish property market here with those in the know who have homes or once did in Spain. We’ve had a home near Marbella for some 15 years for holiday use for family, but then you’ve never visited the Costa Del Sol.

    Will it incense you more as the troll you are that I don’t engage you anymore and completely ignore you, now that most posters know about you? Take your medicine and have an early night! Lol

  17. I’d love it “Mike”/Angie if you stopped your trollish personal attacks and stuck to thread topics. Everyone here can see your history in this. Only a week ago you came out with a blatant lie – that I’d never been to Andalucia. Not that it matters that I’ve spent time in Andalucia but not the CDS – this website claims to cover Spain’s news, not just 1 coastal region. And the thread was on the “Spanish property market “

  18. GUAQ, property sales are increasing but you stated ”Property purchases actually increased in November by 25,200 transactions”. Nov 2013 to Nov 2014, increase was 9729 having looked at a website. Total Nov 2014 sales 31,576. Oct 14 to Nov 14 sales increase of 5108 month on month. Having looked at the UK market sales look like they are circa 100k a month. Bigger population, but not 300% bigger. No doubt a few holiday home bargain hunters are out there, especially with the weaker euro. Sales are increasing but it is not boom time like you make it sound.

  19. The trend is UP in Spain, Reap – that is what matters! (Thanks btw for actually addressing the subject unlike trolls like Fred and Mike. ). And the figures for December 2014 show the number of mortgages made in December was 15,962, up 28.9 per cent compared to December 2013. You will find that in the UK total lending for house purchase rose 1.5% month-on-month in December, although it was down by 5.1% year-on-year. Mortgage lending in Spain has now risen for a consecutive 7 months, and the impact of lower oil prices, a more competitive currency and a growing economy will mean further growth in the Spanish property market in 2015. I suspect this will enrage certain posters here, but they won’t be able to use facts, figures or trends in their argument, only personal abuse or doomster predictions (which they nearly always get wrong).

  20. You’re quite right Reap that it’s no boom like he makes it sound Lol Let’s not forget that the agent who posted here recently had 586 properties on his books from one Estepona office alone, an area that the above doesn’t even know. A visit is needed to understand that market and how many for sale signs there are not forgetting many properties have languished for sale for up to 10 years. The glut will take years to absorb what with exorbitant transaction costs to factor in.

    Unlike the pretty healthy market in the UK where stock is low to demand.

  21. Sales might be slightly up in Spain but even if they have increased by as much as 50% (which they have not) it doesn’t mean much because 50% of naff all is naff all. I was speaking to an agent in Spain who agreed that sales have increased but admitted that prices are still falling and people are making offers way below the asking price. It will take years for all the unsold properties to be mopped up and unless they drastically change their property/planning laws and associated taxes, demand will remain very low.

    Mike is right about UK housing stocks being low, estate agents (who charge about 1.5% of the sale price) have to virtually beg people to put their properties on with them and they all sell within a very short period of time. It’s called having a functioning economy which leads to a functioning property market, economic activity and jobs.

  22. No doom and gloom for me. According to Zoopla my house increased by £84,000 last year. What would have happened if invested in the Spanish market? No lo se but probably a minus of 84,000 lol.

  23. Spanish house prices actually rose in the last quarter of 2014 – the first such rise since 2008! Most neutral observers to see more of this as sales continue their upward surge this year in Spain (and indeed much of the Eurozone which is being given a fillip from lower oil prices and a more competitive currency). As for gloating over the UK bubble – is that why over 7,000 Brits decided to buy in Spain in 2014? Foreign demand is huge now in Spain. I can’t say I blame them – there is obviously an overdue correction coming to the bloated UK market, and no doubt it will be blamed on Labour’s mansion tax…

  24. How much did you lose on your Spanish venture Quiddy Lol

    The 7000 (allegedly) who bought last year are already facing a substantial loss. Around 12% on costs, minus 6% price drop and now the huge change in the exchange rate. Quite a few of the 7000 will have been inheritences which the dodgy Spanish stats count as sales.

  25. Spanish house prices actually rose (albeit by a small 0.5% ) in the last quarter of 2014. Tide has turned Marion – your scaremonger tactics are no longer valid.

  26. John, as the exchange rate is more favourable now for Brits than last year then in sterling terms those who bought last year are down, I’ve also seen price reductions in that time on the CDS certainly near our place.

    But the biggest reduction in value has to come from the exorbitant transaction costs. Assuming all things being equal and no exchange rate differential nor fall in price, if someone bought last year on any of the mass developments but needed to resell this year they would be down 20% on these costs alone. That is pretty substantial in itself.

    Who are the winners? Not the buyers but the agents, lawyers and Government, in financial terms alone, so Marion IMO was correct.

  27. Do a guesstimate of Sterling Cost of buying a €200,000 property in Spain 6 months ago and now with the improved exchange rate, then there are less oncosts now.
    The property would now be worth around 4% less ( being generous) which gives an average loss of over £20,000 in 6 months and that is a conservative one. Propert has risen HaHa in your dreams Quidy. Too many lingering on the market, especially on the Costas.

  28. I see what you mean, Marion had not made it clear that they were selling 12 months after they bought. I was looking more longer term and it seems to me if you buy and sell after several years then if you sold for the same price you would not be out of pocket any more than just renting a property. If you have bought and intend staying then it matters nothing if the value drops 50% as presumably you bought because you liked it and you would not like it less because someone says it is not worth as much.

  29. Assuming you buy a legal property in the first place, Spain is good for summer holidays, better still if you can keep a house in the UK then there are more options open. It could be worse, you could buy a caravan, spend £25k buying it, £2,500 per year ground rent, after ten years you have to give it back or buy a new one and in many caravan sites you will be surrounded by chavs in the beer / club house. With the euro near 1.40 to the pound and many apartments at £50,000, if they go up or down 10%, £5k will not make any difference to your life and more will be wiped out with buying and selling costs. If you want an investment don’t buy a place in Spain as most are not easy to rent out, the Spanish Government are making it difficult with more paper work to rent them out, buying and selling cost, stamp duty is very high and so the list goes on but if it is just for a place to take holidays or live in then now is a good time as long as you make sure the place is legal, but remember with the low cost of renting it would take a few years to get your money back if you purchase. It is a shame, I was watching wanted abroad the other day on BBC2, land is more expensive in some 3rd world Countries than it is in Spain, the politicians have destroyed Spain, shame, should be so much more, great climate, a safe Country compared to many, good Roads, great wine, salads / veg but the corruption and miss management has been the downfall along with out of date employment laws. In much of the UK you can sell a property in a matter weeks, in London people I know are selling them in 1 week, a friend sold a small terraced two bed house surrounded by high rise council flats in a bad area of London for £500k. The developers in London are restricting overseas buyers to give the locals a chance. BTW, I am not saying that is good, there is a lack of supply as we have an extra 300k people moving to the UK a year and we are overfull – supply & demand. British kids with little education and no parents to help will find it impossible to buy.

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