Focus on the bigger picture as uncertainty marks the lead-up to Brexit vote

How the EU referendum is affecting Spain's property market

LAST UPDATED: 8 Jun, 2016 @ 15:36
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campbell_fergusonTHE international Spanish property market is now certainly feeling the Brexit effects, writes Campbell Ferguson.

Agents, lawyers and surveyors are noticing that potential buyers and clients are putting off their commitment to purchase until after the result.

FX companies are reputedly expecting a 20% drop in value of the pound against the US dollar if Britain does leave.

It will be large against the euro too, though the EU will have such problems with the UK’s pending departure that the euro could fall just as steeply.

And it will continue to be uncertain for a further two years as apparently there is a ‘cooling off’ period for negotiation, after a decision has been made, during which there is the possibility of any decision being reversed and the UK being ‘permitted’ to stay in.

Can any benefits be worth all that hassle? Some obviously believe so and, as I write, the certainty of the vote deciding to leave, based upon betting money placed, has risen from 15% to 25%.

But how did I get onto this topic?

Well, it must be the macro-economic training of my Land Economics qualification from long ago. Looking at the bigger picture and how that’s going to affect individuals – and also how the actions of individuals can affect whole populations.

A decade ago I gave a talk about how the actions of individual developers and owners were spoiling the countryside with developments and individual ‘campo’ casas appearing like graffiti in beautiful valleys and hillsides.

Could they not see that these developments were destroying the natural assets that were attracting the people in the first place?

This ‘progress’ was stopped by the recession, but now that the market is getting stronger again, and if Brexit goes the ‘right’ way, that will continue.

There are indications and cranes popping up in increasing numbers.

Will there be false confidence in the insatiable desire for the whole world to come to Spain, now that tourist demand for Spanish and Portuguese destinations is apparently 30% up on last year. These people must be wooed to generate a loyalty to these Costas and not be treated as a never-ending resource to be fleeced with high prices and off-hand attitudes. Hopefully these days are past, but I have my doubts as individual greed is a culture hard to stop.

And that’s evidenced by the proposal for a compost factory behind Cancelada, Estepona.

For the sake of an individual promoter plus probably a few other ‘beneficiaries’, a whole valley’s attraction could be destroyed.

Many hectares of land, environmentally suitable for development that will take pressure off areas of high landscape value, could be sterilised by an environmental disaster in the making.

And that’s not counting the thousands of existing homes that will be affected, potentially destroying the quality of life and health of tens of thousands of permanent and holiday residents.

The economics don’t make sense in the location proposed as it can’t be profitable and meet the environmental requirements.

Estepona will be sterilising land where development could bring much-needed revenue.

Ah, but maybe the EU will come to the valley’s aid and stop this foolishness. Like with the referendum, we wait and hope for common sense to triumph.

 





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Campbell Ferguson, FRICS, working from Estepona since 2001 plus three years in Madrid, is at the heart of the Survey Spain Network, which links 15 RICS qualified chartered surveyors located all round Spain and the Canary and Balearic Islands. Tel: 34 952 923 520 Fax: 34 951 239 216 Email: [email protected] From UK Direct: 0870 800 3520

19 COMMENTS

  1. Everything I have said to my fiance in the UK is happening.the pound is dropping…investors are pulling out….ppl are removing their savings at an alarming rate…unemployment is going way up…companies are pulling out.look in the 90 s and Quebec in canada.they wanted to separate from canada. The same thing happened to them!!!! .and that was a province.we as Canadians can see the damage that has already been done.riots in the streets is next!!!!. Be smart.leave well enough alone. For those who keep saying ” we want Britain great again” are not using logic. Think everyone. When thousands upon thousands are without work where will that lead to?. Criminal activity will rise sharply!!!!!.

  2. “Ah, but maybe the EU will come to the valley’s aid and stop this foolishness.”

    The EU must involve themselves more in such issues. If they can take Spain to task over the Donana National Park, they can most certainly take them to task over the planning laws and threats of demolitions by owners who did everything by the book. Spain’s constitution says everyone has the right to a home, and yet it ignores its own constitution. And so it starts again, more building, more illegal builds, Spain never learns. It likes corruption – it’s in their DNA, alas.

  3. Right yet again Fred, corruption and incompetence I would say.

    Why is no there mention of the so called illegal property situation in this article? The EU should have stepped in long ago and this is a prime example or how the EU fails to act when it should and vice versa. I realise that all estate agents in Spain are desperate to play down the illegal property/unworkable, unfit for purpose property laws and keep quiet about the demolitions but it should be cited as one of the many reasons that the Spanish property market has crashed. Nobody should kid themselves that foreign buyers are making a distinction between the countryside and the coast, they just see the work “demolition” and run a mile.

    Speaking on behalf the Axarquia, there is nothing wrong with building tastefully designed houses on individual plots in the countryside as long as they are in keeping with their surroundings and properly regulated.

  4. Listen to this man on the EU and UK. Then nobody can claim they don’t have information to decide.
    “http://www.youtube.com/watch?v=USTypBKEd8Y&sns=em”

    • Interesting lecture, however it’s the average man in the street who is voting, and not a professor with such detailed knowledge of the EU.The average man in the street is mainly concerned with immigration of course, which is the cornerstone of the Brexit argument. After listeming to the lecture in the link above, it’s clear that the UK is headed back to the stone age in the case of Brexit.

  5. The main question is wiith 333,000 more coming in than going out of the UK in one year and with not one person from remain addressing this issue it seems that we could Brexit. All DC could gain from the EU was a temporary halt to benefits if new people had not paid to the system for 4 years, this is only temporary so not much use when more countries join in the coming years. The way the EU ignore issues is very similar to how Spain is managed.

    • Perhaps we are concentrating on the wrong issue? Other EU members do not seem to have this “migrant magnet” effect that the UK suffers from. That is the root cause of the problem. No one is clambering to get in to Spain for benefits, so the UK needs to at least make some structural changes to make the UK far less attractive to all migrants. It does not need to ban them, it just needs to raise the bar, and then demand will drop. The inequality of benefits and rights in the member states is astonishing. Try being self-employed in Spain as opposed to the UK, much more difficult. Try being eligible for the health service in Spain as opposed to the UK, even more difficult. People are coming for a reason, so stop that reason. To dismantle every other gain from the EU just because of immigration is a big mistake. Most EU member states are expressing the same problems, so reform will have to come and the EU cannot ignore it.

      Finally, remember also: outside the EU, the UK would still have to accept free movement to gain full access to the single market. Also, immigrants, especially those from the EU, pay more in UK taxes than they take out. The net migration figure is up, that’s a fact, but it’s not the whole picture. Short-term immigration is also up heavily, and that should be taken into account.

      • Two points Fred, firstly, whenever a UK government of any political persuasion tries to reform, curb or do anything to benefits, everyone starts squealing so that will be very difficult to achieve and probably would not get voted through. Look what happened when they tried to change the criteria for working tax credits.

        Secondly, the EU knows how we are placed and how difficult it is to make changes to the benefits system so why didn’t they let Cameron have a longer qualifying period before EU citizens can claim UK benefits?

        UK benefits are definitely the most generous in the EU and the easiest to claim. Where else can you get a low paid job and then claim an extra £10,000 per annum in tax credits? It really is ridiculous.

        • People can “squeal” all they want Jane, but that didn’t stop the ruling thugs from imposing savage cuts on benefits for the bottom rung of disabled, sick and mentally ill. So that isn’t the problem. The problem lies with a lack of imagination and will.
          Somebody needs to sit down and figure how to differentiate between recent arrivals and those who are long-term, tax-paying stake-holders in the system.
          Yes, it would probably be a fairly expensive layer of bureaucracy, but like tax gathering, it would pay for itself by savings on unpaid benefits.
          Putting new arrivals in line for the minimum wage but NO tax credits,NO housing benefits NO child benefits, and paying full PAYE tax and National Insurance on every penny earned, NO Tax Allowance on wages, even low ones. restricting NHS services, beyond emergencies.
          After say, four years of doing that, perhaps some benefits could be allowed. We would then see those who are determined to work and fit in. The others would soon bugger off.

          • EU migrants pay more tax than UK residents, ironically, and yet we want to get rid of them. The UK needs to get a grip on non-EU migration and then it would see that the EU migration issue is not the real problem here. If the UK cannot work out how to control illegal immigration just think about how on earth they will negotiate trade deals with the rest of the world and detangle themselves from EU laws etc. That will take decades.

          • Stefanjo, your idea sounds fair and reasonable and it would certainly have the desired effect, it just needs to happen. If something like this had been implemented sooner, we might not be stuck with this referendum.

        • Many statistics actually put Germany in first place for the number of immigrants accepted. Germany is bigger of course, so it can physically accept more immigrants (and it has a declining population). Nearly 30 per cent of EU migrants using free-movement rules inside the EU in 2012 travelled to Germany, compared with just 7 per cent, who moved to Britain (OECD).

  6. Fred, unskilled EU migrants cost the UK 6.6 Billion a year,EU migrants pay more tax than UK residents?how on earth do you work that piece of rhetoric out?The UK can get control of both EU and non EU immigration by adopting an Australian points system and detangle themselves from the corrupt EU and it,s undemocratic law makers by voting for BREXIT.

    • Jonathan, yes I could not believe it either, yet the findings, taken from official government data, came in a report into the fiscal consequences of immigration to the UK, published by the Centre for Research and Analysis of Migration (CReAM) at UCL. See: “http://www.huffingtonpost.co.uk/2013/11/04/uk-immigration-_n_4212431.html”. The title of the article is “UK Immigrants ‘Pay More Taxes And Draw Less Benefits’ Than Native Brits”.

      Btw, how on earth can a Australian-like points system control illegal immigration? It is illegal, the people are not trying to obtain “points”, they are entering the country without permission. The EU does need reform, on that we can agree, but to walk away from all that the EU offers because of immigration (the Brexit supporters main issue) is totally nonsensical.

  7. The so-called Australian points system is only designed to increase the population, not reduce it, by picking and choosing who comes in. Yet still they come, but Oz hides the ones it rejects, in concentration camps off their coast. An enlightening article in todays Guardian will show you what Australia does with those who have insufficient points.
    If you can’t be bothered looking, a condensed version of conditions on those islands is; murder, rape, sexual assault, madness, child abuse, self-immolation, forced imprisonment.
    These and hundreds more atrocities, are kept secret, even photographs are forbidden.
    So don’t go quoting Australia as a model for the UK to follow.

    • Link here: “https://www.theguardian.com/australia-news/2016/jun/21/offshore-detention-whistleblower-loses-job-after-condemning-atrocity-of-camps”

      Amazing how the Australian government actually defend this.

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