By David Rick
Most of us are interested in the Spanish property market and everyone has seen the headlines… but what is really happening on the ground?
Well, for the first time in years, we can be optimistic – things are definitely improving but, while this is encouraging, it is not yet time to pop the champagne corks.
So far this year (January to June), my agency Torcal Estates has seen a 100 per cent increase in offers being made compared with the same period in 2009.
Buyers are coming from the UK and across Europe and continue to find Spain an ideal place to retire or to holiday.
Yes, there are still concerns about the market – over prices, the situation of legality and what is happening with the euro – but generally confidence is coming back.
Over the last three years prices have dropped steadily – in some cases there has been a slow, continual drop and in others prices dropped almost overnight. Overall, since the beginning of 2008 they have dropped, on average, by 35 per cent in central Andalucia.
This figure is based on the average price per square meter built (and therefore must only be used as a guide). But it is much more accurate than going on the asking prices which are given by various websites, such as Kyero.
It is based on actual offers being made and also demonstrates that the average offer is broadly ten per cent below asking price although this has increased to 15 per cent in 2010.
The average rate per square meter for 2010 is currently standing at €1,228 per square meter. And while this is by no means a way of valuing properties, it does give people a guide as to what is selling and at roughly what price.
This may be shocking to some, but the facts are plain – people are starting to buy, but they are buying the best value properties.
The difficulty with Spain is that the amount of statistical evidence is extremely limited and often very out of date.
If you look at websites to see what’s available you are looking at asking prices and these, in themselves, can be widely inaccurate.
Many agents keep old properties on their websites even when they are sold! And too many websites have prices that are way too high from sellers in no rush to sell.
What is evident is that prices still need to drop if your property is not generating interest. If you are getting viewings then the price is reasonable and given current levels of activity, all you need to do is wait for the right buyer! Good luck!
Accurate statistics about property values coming from an estate agency? Please pull the other leg…
Well said Justin. Hope the agent paid for this advertorial that is pretending to be a news story. For the record, and from a non estate agent who is well in touch with the market, this is total tosh. And that’s a polite summary.
Even professional, well respected, long established agents are going to the wall. Why? Because, at last, the penny has dropped with potential buyers, especially the British.
Spain is way too an expensive country in which to live and nobody with half a brain cell (or less than millions stashed away) would be stupid enough to buy property in Spain.
I wish all good, caring agents well and hope they survive.
I just wish the press would stop allowing them to perpetuate lies and myths.
Great article David. Your conclusions are consistent with our new report analysing and comparing all the available data sources regarding Spanish house prices
The estate agent seems to be aware of his market as a whole, as should anyone engaged in a particular field.
– but :
“So far this year (January to June), my agency has seen a 100 per cent increase in offers being made compared with the same period in 2009.”
If the agency received one offer in a property in Jan-June last year and two offers in Jan-June this year, that is a 100% increase in offers being made.
The statment does not say that any property was sold.
## This may be shocking to some, but the facts are plain – people are starting to buy, but they are buying the best value properties.
This doesn’t really make any clear distinction. People are “starting” to buy? So before “nobody” bought? Who is buying? How much? Just because one agent sold two last month, doesn’t have anything to do with the overall market.
## The difficulty with Spain is that the amount of statistical evidence is extremely limited and often very out of date.
And often a complete lie in order to hide the true reality. I mean can you imagine a big property portal saying the market has crashed, its over my friends. LOL, they’d put themselves out of business.
## If you look at websites to see what’s available you are looking at asking prices and these, in themselves, can be widely inaccurate.
Totally agree! The internet is not the best place to get a clear picture of the prices.
## Many agents keep old properties on their websites even when they are sold! And too many websites have prices that are way too high from sellers in no rush to sell.
Many agents and sellers are still playing their old game. “Aim high” or better “higher” Then we see what we get.
## What is evident is that prices still need to drop if your property is not generating interest. If you are getting viewings then the price is reasonable and given current levels of activity, all you need to do is wait for the right buyer! Good luck!
Definitely agree, if the property isn’t attracting anything something is wrong and it usually is the price!
Why do peple always slag the agent. Yes we are having more offers, but some of them are just an insult, not everybody wants to leave Spain, and not everybody is desperate. Offering 70.000 for a 300.000 property is an insult and yes this recently happened. Remember we are the only people who will work for you for free until we sell your property, spending out time and money to promote your property .You don’t have to come to us, so give us a break. Please.
Well spotted John B, that’s a good point. Statements as such are really worthless when trying to understand the market.
With “statements” I mean the one in the article about the 100% increase ;)
I think it was on balance a fair article. I was very surprised to hear thet two houses near me in the village had been sold and the bank has just valued a 100m2 refurbished property at €160,000 (I’m sure it will sell for less)so I don’t think the authors calculated square meter price is that far out either. I’m not selling houses or buying them but I do think there has been the slightest positive increase in the housing market.
we sold 3 years on having bought at 180,000 euro then sold for a million (after we rebuilt) but the agents were great as it sold in 2 weeks our lawyer got them to reduce the shocking 5% here fee to a 1.5% fee… more like uk. All I want to do now is swap our 600m2 house, for the one that I want, but that´s going to be another story.
Sophia is your agent called CloudCuckooLand SL by any chance?
No,no bird stuff they were the big one agents that you all know and they couldn´t beleive their luck… er… much like us!
Terrible thing, delusion.
Fred. Wot’s up? You’re being far too reasonable.
@ Sofia: You bought for 180K and then sold for 1 million and you were so greedy you got the agent to reduce “their” commission?
That is not called luck, its call speculation. It’s exactly what destroyed the real estate market in Spain.
Pablo, my old friend. Glad you could see through this ridiculous wind-up. No agent would reduce their fees in such a way as a contract is just that – a contract.
I speculate not, I am a stay at home mum of five. Maybe we did a good build, I don´t know… but I do know that we saw the BIG BOY agents at 5pm and they sent a client at 7pm and he bought it for the asking price. They were delighted to reduce the rate… come on boys you are a right little knitting circle when you get going, what greed?
The asking price was cheaper than the going rate…
la la laland.
Very difficult to value properties accurately here on the Costa Del Sol. Total lack of proper transaction values published, even though the Ministry of Housing has access to this information.
Tinsa, the valuers, release monthly figures but these are based purely on valuations.
Heres a laugh, The Ministry of Housing thinks from peak to trough the property market in Spain has only fallen by 11.4%!
Sophia I can´t agree more, we too had a similar selling situation and the VERYBIGBOY agents reduced the 5% fee to 1.5% inline with UK.
Agents here could do alot better to not charge 5%, (their own wives describe them as robbers). A contract, is a contract, is a contract and IT IS UP FOR NEGOCIATION BOYZ!
Wind up not.
Wake up all morelike.
Another schill arises. lol.
we just sold 700k (bought 5 years ago) for 2.9 m agents took 1%.
Fewer agents expect 5%.
Wake up boys.
If you sold for 700K and bought for 2.9m 5 years ago I think it’s you who needs to wake up. You must have been both asleep when you signed the contract lol.
wrong said fred
it is as described above we bought 700k sold 2.9m
1% fee same day.
-just like uk-
we reduced the agents fee from the ridiculed 5% to 2% (a little high but more in line with UK) on a sale of 2m- it was a finca that we bought and renovated 3 years ago for 5.5k.
Fred, are you an agent??
you are all crazy to pay 5% to real estate agents.
STOP THIS ABUSE FROM THEM NOW.
Agents do no behave this way in other parts of the EU!!!!
We just sold a property 600m2 bought at 600K 5 years ago & sold for 1.9 m .
0.5% fees & NO ARGUMENT
My husband and I have only EVER paid 1% to Estate agents.
WHAT IS THIS ANDALUSIA 5% fee???
Noone else pays this % in Spain.
lol, schill clones now.
It is interesting to see people’s reactions – you would think the man that has written this article will be burned at the stake by some and sainted by others!
As far as I am concerned, the going rate for most agents in my part of Andalucia is around 5% – having looked at this company’s website, it appears that they actually charge 3.5% or 5% depending on the terms.
Anyway, who started talking about fees? – not Mr Rick.
The “official” statistics that come from within the Spanish system are so obviously inaccurate that I think any information that comes to light should be applauded – I do agree that the 100% increase isn’t very helpful but does it not give some idea as to how things are changing?
It seems to me to be that “anonymous” postings on websites always attract vitriol because you are never likely to meet the person you are abusing – isn’t a bit more balance needed in life?
us too! us too! lol
A lot of Spanish people have just learned Englsih looking at their names.
They are clones as Fred said. All making millions in cuckoo land. I bet they live in a crumbling cave and claiming UK family allowance.
Is an agent ever going to tell you that things are bad ?. Of course the article forgets to mention the huge percentage drop in the exchange rate between GBP and the euro.
Where I live supply outstrips demand by about 5 to 1 therefore people sit back and wait for prices to keep falling, which they are and rent for the time being.
Agents have a cartel and never ask under 5% sometimes in the good old days even 10%. Thankfully most of these sharks have left and one often wonders if they are acting in the vendor’s best interest.
Here in the Marbella area as with every other area, location is the key to maximise on getting the best price when selling,but alternatively waiting is a better option for at least another year if one is buying.I would say conservatively that house prices from owners who really want to sell have dropped by 40% in the last 2.5 years and three or more agents are willing to share a commission.
(No I am not an agent.)
30000 unsold new badly built apartments lie empty or half built,none since 2005 with a license.
Why have they ruined this beautiful coast line.Is it corruption and/or greed?
“Why have they ruined this beautiful coast line.Is it corruption and/or greed?”
lol Marbella is currently witness to the biggest corruption trial ever, with 100 people taking the stand I recall. Therein is your answer, Duke. Why are you not covering this, Jon? Seems a big omission from your paper.
Well Fred, the real truth is that not much has changed.We have a Lady Mayor who happens to be married to one of the biggest developers in this area,and they keep on building,regardless.
Spare a thought for the young first time Spanish buyers.Three years back anyone could get a 120% mortgage,usually by fiddled paperwork, but now as with all the banks there is an about term and they are lucky to get a 60% mortgage.The average small apartment is around 170000 euros, so it is impossible for them to buy unless “daddy” helps them out.
40% of Spain’s unemployed are under 25,and that does not make good reading,for a number of reasons.
about turn, not term.
You hit the nail on the head with your analysis Duke, nepotism is rife in Spain, and it will never change.
I don’t think the Olive Press can stand another article about corruption, they have gone all quiet about the biggest corruption case in history down at corruption central, Marbella, and seem more interested in reporting about ‘walking holidays in the Axarquia’, lol.
But the Axarquia is lovely isn’t it Fred?
I’d say the Axarquia is lovely as a destination for a short-term holiday and certainly to explore and walk, and definitely for a holiday home, but it is not a good place to relocate to if you are coming to live and work. It is quaint and pretty, but also ugly and backwards in many respects, and there are very few opportunities or prospects. Depressing as that is, it’s true, indeed one could not expect it to be anything else really, as it a very under-invested area inhabited by mostly very poor people (average wage 8K a year).
Part of the Axarquia’s problem is that many families want to move elsewhere to improve their prospects, so many smaller towns never get the investment. It is certainly “real Spain” that’s for sure. If you enjoy driving over potholed roads and viewing endless Olive plantations, it’s definitely for you!
We have seen property prices offered by the banks as much as 50% below peak prices. This has helped fuel the market and we are seeing a big upsurge in buyers in 2011. It’s only the banksthat can afford to seel this low so the market is still not great for private sellers.
Many of the buyers leaping in and buying bargain properties are purchasing most of the illegal and irregular builds that people are now offloading lol.
In just a month I’ve heard about two families that have purchased bargain properties: one has just found out that the house has massive debts, which they now have to pay under Spanish law, and the other has just found out that half the house and pool are not in the escritura and have to demolish them or pay a massive fine. Watch out “bargain” hunters.
oh fred sometimes you write such tripe!!!!!!!!!you dont just find out the pool and half the house are not in the escritura you read the papers before you buy and even if you cant speak spanish , you dont need the language to read metros quadrados and anyone can buy a bloody tape measure,.
Fred you cant know everyone in S
Louie, on the basis of what you say nobody should have ever ended up with an illegal or irregular property, and yet their are tens of thousands of them all over Spain, so I’m afraid that it is you who is talking tripe.
Some interesting comments on here that made me laugh for sure. I lived in Marbella for 5 years, 2006 to 2010 and like a lot of people got hammered on the property market by paying top dollar at the peak to find that 4 years on the property was worth 50% less. sad thing is in the next 5, maybe 10 years that same property will not be worth what I paid for it.
It makes me laugh when I see agents say, offers are up 100%!! Having worked in the real estate sector in Spain I can confirm that getting an offer is simple, a 5 year old child could do it, all that truly matters in a business is getting the completion and the cheque in the bank. Plus most of the clients looking to buy offer 40% or more less than the asking price.
Looking at the number of companies who have gone it is clear sales are not happening. Yes there are sales taking place for some but very few companies are doing well, some are doing OK but the majority are scratching around to find deals just to keep their heads above water or they are surviving on rentals and management. I should know, I used to be one if them but luckily managed to get out of Spain to start again in the UK as most of my friends did too.
I agree totally with a recent comment, Marbella is an expensive place to live and the only way to live a comfortable life there is to earn your money in a business outwith Spain, or marry a millionaire;-)
I keep hearing how it is getting busy, it is coming back……………..heard it all before, it will take years .
I would never have bought in Spain if I had I known what I know now about the cosy corrupt cliques of “professionals” in this country. From Mayors, Notarios, Abogados,estate agents and construction companies. They have feasted themselves on every tier of of the cake of property corruption. There is little one can do about it. The construction companies have vast influence and power. There is little or no planning restrictions here, this is why the Andalucian coastline and many other towns and villages have been systematically destroyed of all old/architectural buildings/streets and taken over by the developers who erect the cheapest concrete blocks you can imagine. it is ugly and nasty and nobody cares!. Just compare these concrete jungles with France! I lay part of the blame with an apathetic populace who don’t even seem to notice let alone fight for planning regulations. A town near me which was an ancient Phoenician/Roman port of some historic importance saw it’s last old building demolished without a word last year. Laughably they think it is still a place worth a visit!
When i bought 8 yrs ago I consider myself fortunate that all turned out well, apart from hearing at the office of the notario that I had to pay a huge amount of black money. My hands were tied as I would otherwise never have seen my 10% back again. I had to get this from the bank in cash and hand it over with the Notario taking a cut no doubt. I did my homework and read the bible on Spanish property purchase, but you still are very much in the dark believe me. A prayer is all you can hope for.
Hey Jasmine, what qualifications do you have to be an agent exactly? Anyone can do it, can’t they?
Yes of course anyone can do it in Spain Fred, that is one of the major problems is the fact that many of the agents know nothing truly about property or actually investing. All they care about is what house pays them the most commission, or at least in the days when developers paid up to 10% that was the case. All you need to be able to do is sell, know the area and be presentable. You do not need any qualifications and in fact 5 years ago the coast was full of rogue agents, ex time share type of characters who basically worked out of the back of their car and hung around hotel lobby´s
I am not an agent, I am an investor with a large portfolio all over the world and a qualified surveyor, valuer of residential and commercial property and have worked in several countries. Having lived in Marbella I met many so called agents and trust me, they were proof that anyone could do it and anyone and everyone in Marbella does try to get a piece of the action.
“but luckily managed to get out of Spain to start again in the UK as most of my friends did too.”
Seems to be a recurring theme, this “get out of Spain asap” advice.