BRITONS are taking increasing advantage of a strong pound and rock-bottom property prices to buy second homes in Spain.

The trend for so-called ‘schadenfreude shopping’, where buyers cash in on other’s misfortune, is being fuelled by property discounts of up to 70%.

The pound is now 25% more valuable against the euro than three years ago, when exchange rates were almost on parity.

This, added to the fact there are around a million unsold homes in Spain to ensure supply far outweighs demand, make it an ideal time to buy in Spain.

“Spain is the main bargain area in Europe, the Costa del Sol in particular,” said Charles Weston Baker, head of Savills International.

“Greece and Italy offer some good opportunities, but not nearly as many properties are available because resorts were not as overbuilt so extensively.

“Spain has seen dramatic price falls, not least because banks need to shift distressed stock.

“Consequently, they are offering high loan-to-value mortgages on properties that are discounted by some 70% compared to their 2008 peak.”

He added: “This represents a great opportunity for buyers, who can borrow up to 90% of the purchase price and achieve very substantial returns.”

132 COMMENTS

  1. Some of this chap’s comments from Savills could mislead people into making foolhardy decisions by investing in overseas and in particular Spanish property whilst all the uncertainty in Spain and the Eurozone lingers on. If Spain reverts back to Peseta one day, (not impossible) then property values are predicted to fall further.

    Some of what he says is just plain daft and typical of an agent who hopes to make big commissions from naive purchasers.

    This is what happens when a property market is totally unregulated, hype and lack of transparency!!

  2. Quite agree @Mike. This article is pure drivel even by Olive Press standards. This is not news but a promotional item for some Estate Agent so ,anybody out there tempted to leap in to the property market here , be very very careful. Remember that the Olive Press is primarily in the entertainment and advertising business NOT news reporting. As such , it has the same levels of journalistic integrity as all the other internet blogs out there , E.G. not very much !

  3. What has surprised me with this article is I think The Olive Press is normally the most realistic honest paper in Spain who generally tell it as it is, and secondly, Savills is an agent you would not normally associate with the run of the mill OTT Spanish Estate Agents. I wonder whether either would care less if unfortunate buyers bought because of this only to regret it later as many have before. Why would The Olive Press make that headline to the article when it’s untrue and from an agent?

    Buyer Beware!

  4. Are you an agent anna, you sound like one?

    You say ‘sun equals demand. Simples’, that’s why there are nearly 2 million unsold homes in Spain then, including aup to a million new builds? LOL

    The only ‘Simples’ will be those who get duped by this agent’s spiel.

    ‘Great long term investment’ LOL again, many Spanish properties are not well built compared to those in other countries.LOL

  5. As ever, agents hyping to earn commission, regardless of the effect of their advice on clients:
    ‘The £ is now 25% more valuable than 3 years ago’. Simply not true. In Oct 2007 the £ bought 1.43 euros-today it buys 1.24 -13% less. In Jan 2009 The £/€ was briefly at its low point of 1.037 so it is now worth just less than 20% more than its very lowest point-it has never been 25% worse than today as claimed. But then who expects an estate agent, even Savills, to tell the truth?
    ‘An ideal time to buy in Spain’ will be after the inevitable euro exit and accompanying devaluation. Until then, the smart money will rent.

  6. Good honest posts from all above apart from Anna.

    Steve, you’re absolutely right about rates, I too remember 1.65 to the £ in the boom, so the £ is still 25% lower which wipes out much of current price drops for Brits.

    Agents right now are frantically trying to re-hype the Spanish property market all for the sake of their commissions, no scruples whatsoever, I said above the Spanish property market is totally unregulated and it’s unsafe to buy now. There’s also a lot of dross for sale they’re trying to shift it to the unwary.

    I agree people should rent until after Spain Spexits the Euro when prices could halve again!

  7. Prices need to come down, way down. When my husband arrived in Almeria in 1960, he bought village houses for $50 apiece. We bought a 120m apt in Torremolinos in ’64 for $12,000. Just saw an article in the NYT on Spanish real estate bargains. A 2 bed apt on the coast was $92,000. A bargain ? NOT !!!

  8. Of course it would be great to live in Spain. That, at least, won’t change short of a strong anti-foreign drive by the authorities.
    Actually, with all of the foreign-owned ‘illegal homes’, pensioners on hose-pipes and generators, drives like the Telegraph’s ‘Spanish Planning Scandal’ (“http://www.telegraph.co.uk/expat/campaigns/spanishplanningscandal/”), the five year long agony of Helen and Len Prior and many other stories that never make the Spanish press, it’s a wonder than anyone is buying.
    Really, Spain isn’t that bad. Not quite!

  9. The silence from Savills (who put out this spiel) is deafening.

    I emailed Charles Weston Baker and their Ceo and MD, copied in the email to The Olive Press and no-one from Savills has had the courtesy to reply. My email politely pointed out their non disclosure of relevant facts (conveniently left out, nor that we wish to see anyone misled into buying either based on their report nor buying while all the Spanish and Eurozone turmoil was going on.

    As agents, and in the interests of transparency they should reply!

    Buyer Beware!!!

  10. After reading this post I am really surprised that what is happened to Spanish property market.
    Soon i was thinking to relocate to Spain and also thinking to invest in property in Spain, But now i am confused…
    Please response, is this the right time to invest in property in Spain or i should wait some more.

  11. Jimmy, Its a great place to live, but most people expect the property market to go lower for a couple of years yet, so grab a great rental deal, and watch the market once you are here. But if you want miserable weather, over priced property and too many American accents, then do as Fred suggests and head for the Cotswolds…

  12. Oh yes, Estepona, the town that is mired in corruption and whose council is totally bankrupt. At least in the Cotswalds your investment won’t fall through the floor and you won’t lose sleep at night worrying if it will be made retrospectively illegal. There are far more important things than just the weather, as many expat owners have now found out.

  13. Estepona is a great place to live Fred, and the corruption and shortage of funds in most town halls in Spain has no effect on me at all. As you know it is part of life here, and I agree that people who lose sleep over things like that are better to stay where they do not get so anxious. If you have travelled much, you will be aware that corruption is everywhere to greater or lesser degrees. Abuse of power and greed are unfortunate parts of human nature. I am happy to accept that, and get on with enjoying my life here. And even in the UK there were over 10000 mortgage repossessions last year, and in real terms, UK House values are down 30% in 5 years, so many are in negative equity. It really depends on how you choose to look at life…..

  14. I see that ‘Steve/Im all right Jack’ is back.

    Can you believe what this joker says – ‘corruption and shortage of funds in most town halls in spain has no effect on me at all’- what a nasty self centred person he is.

  15. Perhaps Steve can tell us about the 100.000+ illegal homes in the UK? Oh wait, there are none. UK House values down 30% in 5 years? Here in Spain that’s 1 years’ fall. But it’s all ok, it’s all part of Steve’s life.

  16. So stuart is back making judgements based on no knowledge-no surprise there. Perhaps he can tell us all what, in his selfless world, he is doing personally about the corruption and shortage of funds-apart from just moan that is.

    And if Fred thinks there are no illegal homes in the UK then he has his head up his a*s*. Local town planners are having to turn a blind eye to illegal developments in very many cases, as they can not afford to fight the cases, only to be overturned so often by the DoE. Either a jaundiced view of Spain or uninformed about the UK, or both.

    But dont let these glass half empty, moaning minnies put you off enjoying life here in Spain, along with most expats.

  17. Jaundiced view of Spain? lol, you’ve got your head buried in the sand and have obviously not even been reading the OPs and others significant coverage of the planning issues across Spain (not just Andalucia).

    I’m not trying to put people off having a good life here, many do, and good luck to them, but where you fall over is when you accuse people of being “moaning minnies” for talking basic facts.

    Try telling the members of SOHA and AUAN et al that they are moaning minnies, Steve.

  18. The truth is Jimmy, many Brits and others are now housetrapped in Spain because their property prices have crashed.

    If you buy in Spain, even with a discount, your property will have to rise in price by 20% just to break even to cover buying and selling costs, so you will be losing money from day one, very little chance of any profit for years to come.

    Spain has over a million, some say 2 million unsold homes, Banks are reducing prices on their stock and causing the market to fall further,and, if Spain leaves the Euro and adopts the Peseta again prices will fall further against other currencies because Spain will devalue the Peseta.

    Most who talk the market up are either agents and developers, or Brits who can’t sell but want to, but some Brits accept things and make the best of a bad situation.

  19. TRAPPED IN SPAIN.. haha never heard such MISERABLE nonsense!!
    So many negative WHINGING BRITS around! pathetic! Met someone where we live who ‘avoids Brits’ due to apparent ‘back biting’.. and avoids forums… What’s up with people! and Brits abroad!!! like giving people the cold shoulder when out and about instead of smiling and saying hello! it’s not hard…

    …anyhow sorry about all that guys… better get off and try and ENJOY LIFE ITSELF!

  20. haha good one Steve

    sorry guys – I was in a bad mood yesterday and needed sleep!

    I do feel really sorry for anyone that is mortgaged up to the hilt to buy in Spain and now in negative equity (trapped if they want to leave Spain?… not sure why…). But if anyone retired to Spain and bought property outright, I don’t think there’s much to worry about price wise. Get out there and worry about more important thing like finding the best tapas bar and practicing Spanish with the locals! & get surround yourself with positive people like FRED! LOL (think this is the first time I’ve said ‘lol’ in my life – I won’t do it again)

  21. Like most of you I feel sorry for those genuinely stuck in Spain with negative equity etc but I agree with those on here who say try and learn some Spanish, mix with the locals, enjoy the sun, food and wine, and if you have a garden make the most of it, it’s very therapeutic.

    If you want to move back to Blighty, think of this as positive help: Present your property as best you can and de-clutter, a garden should be seen as extra living space albeit outside so make it look good and enjoy it anyway. We’ve just helped someone move back by this method, her house was chosen because it was clean and well presented and her garden was colourful.

    If you can bear to take a loss in Spain, don’t forget the exchange rate could be in your favour converting to Sterling, and, there are lots of discounted properties now in the UK so negotiate hard when you buy.

    Meanwhile get out and enjoy yourselves.

  22. Dave, thanks for the compliment. Yes, eating tapas is so much more important than, er, making a living and otherwise surviving. Are you another retiree? Btw, happy people always use lol. I haven’t met many positive Spanish people on my travels btw; most are desparate and worried.

    @Mike, how can moving from a euro currency be better for a person returning to the UK and buying a house in Sterling? lol.

  23. Fred, I guess Mike will answer for himself, but people who, for example, bought 6 years ago for €200000 at 1.48 to the £, paid £135000 then, and €200k now converts back to £161k. I have friends who have done this; In the meantime their house price here had doubled and has now halved back to what they paid initially, but they have got a better conversion back to £. I am fortunate to meet spanish people who are in work, and at least superficially are happy, even though they may be helping to support people in their extended family who are unemployed. I hope for better times for them, but not any time soon I fear.
    imho, still a great place to retire to. For me the wonderful climate this week compared to the grey wet short days in uk speaks for itself.

  24. Steve got it right in one, it’s called exchange rates. I’m sure lots of Brits say who bought a few years ago with the fact the Euro is stronger now against sterling now, (hard to believe) will find that if they could sell now things might not be too bad after all.

    Similar example to Steve’s. Someone with £200k bought a few years back at rate of 1.50 euros per pound, = 300k euros total spent on property.

    Lets say they manage to sell at 225k euros, a property fall of 25% if they are fortunate enough to have a good location, and convert back at say 1.20 then they get back £187,500 so not such a bad loss. Could be worse but might be better, but the point is, a buyer can take the hit in Spain and make it back on a canny purchase in the UK.

    In our case we were fortunate to buy a way back at rate of 1.64 so even taking a 30% drop in property price and a sale, we’d still just about break even in sterling terms.

    Mike also LOL

  25. I’ve not met anyone in recent times who is returning to the UK (and I’ve met a lot) who have not taken a large hit after selling up in Spain. Your sums are quite small. Ratchet it up to the 650-800+K mark and then you are looking at significant losses. The 1.64 rate was aeons ago. You still need more euros to buy more pounds, simples. Then there are estate agents fees, taxes, etc to add. Don’t forget you paid 7-10% of the asking price to purchase the property – do you get that back?

    You dummies would make great creative accountants – Barclays has some positions available in its Libor department I hear.

  26. I think you are the dummy Fred (or a troll)! You must know some very wealthy people if they paid 800k 5 years ago-200k is far more normal, or less. Of course you dont get back lawyers/agents fees but then no one suggested that.

    Mike’s point was, if you re-read it properly, that even if you take a hit in Spain you will get some benefit on the exchange rate. When I bought, I exchanged at 1.46 and if I repatriated now I would pay 1.23. Using your suggested 800k, that would get me £100k more than I paid all other things being equal-Mike’s point.

    Dont bother to apply for that Libor job fred…..there will be a few people ahead of you

  27. Steve, the property market was at its peak in 2007. You don’t know anything about the property market in Spain if you don’t even know that basic fact. In fact I doubt you even live in Estepona not to know that.

    All other things are not equal; you don’t break even by a long shot, and arguing that point is quite ridiculous as this entire article is about how much better financially it is for UK expats to purchase in Spain at the current time. Going the other way, Spain to UK, is not. lol according to you, you are the only person making money in Spain by moving back to the UK. Duh.

  28. Fred I had you down for being someone with a brain but clearly not. What don’t you understand about exchange rates?

    Going from Spain to the UK is the most likely chance of coming out with a smaller loss, and he’s not the only one to have done so, we’ve heard of several Brits who’ve moved back and more or less broken even, and what’s more, they’ve negotiated hard back in Blighty and come out on top. You conveniently forgot that point didn’t you? LOL

    It’s not going to be ‘much better financially for Brits to purchase in Spain at the current time’ as you say because of all the uncertainty around, how good will it be if Spain leaves the Euro, reverts to the Peseta and devalues, now even you can’t say for certain that won’t happen. BTW if it does happen, property prices are predicted to halve yet again. LOL

  29. Steve/Mike, Fred is acting like a troll possible in his own interests, possibly because he’s in negative equity or involved with Spain’s property market. His posts have all the hallmarks of a troll or an agent’s employee, a WUM. He’s talking out of his rear. If he only knows people who are making losses when they return then he obviously bought in the wrong place in Spain himself. He thinks he knows all about Spanish property but knows sweet FA about the UK property market where prices can be negotiated down too.

    @Fred LOL LOL LOL

  30. What a bunch of numskulls you lot are. Re-read the article. The pound is 25% stronger currently and that does nothing for a person selling in Spain and buying in the UK at the present time. Breaking even is imposible when the rates have changed – basic arithmetic.

    Paul, very foolish you make yourself look by making such assumptions. I’ve sold three houses in the UK in the last eight years and made a 200-300% profit on each. lol indeed.

  31. Fred,
    your missing the subtext – we are desperate to sell, please buy from me.

    Fred your profits in the UK housing market came about – because you bought at the right time. All this crap about selling and making a profit in the Spanish, or rather Andalucian property market is just that – pure doo-doo. If you bought 10-12 years ago you may be able to sell and not at a loss – so how many fall into that bracket – not a lot.

    As usual the usual idiots appear talking about Spanish sunshine when they really mean southern Spanish sunshine. Try telling that to those who live in Galicia/Cantabria/Asturius/Pay Vasco/Aragon/Castille y Leon and not least Cataluyna – Barcelona = humidity.

    If Spain leaves the Euro you will not believe the hyper-inflation that will result.

    What did one idiot write about Fred not buying in the right part of Spain – there is no right part. Forget the pointless argument about Spanish property and pay attention to the Catalans. If they decide to declare UDI and Madrid decides to use it’s army – remember Spain still has a citizen army and a lot of them are Catalans and Euskadi – a big problem. There are no German/Italian Fascists to back them up. On the other hand many foreigners will flock to fight for the Catalans – the result will go one way only this time.

    What should concern those living in Andalucia is what a triumphant Catalunya will do with the several hundred thousands of Andalucians who moved there in the good times and are now excess to requirements. It’s a good bet they will send them home.

    As for the overpaid egotists in Brussels – their opinion is worthless and irrelevant – there are over 7 regions in western Europe alone that don’t want to be controlled by aliens anymore and if these peoples don’t want it then they will reject it.

    Without Catalunya and Pay Vasco, Spain will disintegrate and the two regions that will crash in flames are unproductive Extramadura and Andalucia and that’s just for starters.

  32. You’re the numbskull Fred, the pound might be 20-25% stronger than it was AT THE TURN OF THE YEAR, get it? However it’s still 25% weaker against the Euro than several years ago get it? Basic arithmetic which you don’t understand, means that people like us who bought at 1.64 are still at worse losing a smallish amount, and breaking even or more at best converting back to Sterling.

    You don’t mention the bargains around now in the UK to make up some of any losses, nor do you mention the possible scenario of Spain leaving the Euro, going back to the Peseta and devaluing, plenty of talk that this could happen, methinks you are the numbskull old chap. LOL LOL

  33. fred does moan a bit but on this occasion he has the analysis correct i feel. we have just sold our place near Malaga and after the fees (agents fees and lawyer) and of course the big reduction in price (it lost nearly a third of it’s value since we bought in 2004!) we are looking at a big loss of close to £38,000. This is a massive hit for us and i amazed people on here seem to think 20 or 30K is a small amount! Its not to us!

    Nobody has mentioned that prices have collapsed in Spain, so the exchange rate is still not helping. if we could get the same price as we bought for then maybe we would have been better off. fred was also the only person to mention the 10% purchase tax, which is an extra cost not factored in. truth is that the pound is strong now and that means we need more euros to buy the same amount in sterling. prices have dropped in the UK for a few years but the disparity is so large between countries that you can’t get a quality place in the UK for the money. this is our experience anyway. we would have loved to stay in spain but its financial suicide with no end in sight.

  34. Spot on Sheila. Thank goodness someone still has common sense. All other things are not equal, that’s the point that the numskulls keep missing.

    Dave, I’d rather be a troll than a thicko. Luckily, I’m neither, and so far, and with a lot of luck, I’ve only gained from the property markets. I’ll keep my Spanish property until the market recovers again in a decade or so. Boom bust and all that.

  35. Sheila I don’t think Fred is right either I’m afraid, people aren’t talking on here that 20-30k is a small amount, only that it’s not as bad as some moaners like Fred say it is.

    Also, I think some of those examples already quoted include the 10-11% buying costs if read properly.

    Hope this makes you feel better but here is a factual very recent story. We know a lady who moved to Spain 5/6 years ago looking for a happy retirement with her husband. Last year he died leaving her on her own in an urbanisation of look-a-like villas. To cut a long story short, when they bought they paid 360k euros including costs. She was desperate to move back to the UK, it took a while but she kept lowering the price to 280k and sold for a net figure of 250k, so around 30% drop like yours. Converting her euros back to pounds she lost £30k similar to you but she was glad she could put it all behind her.

    Guess what, she recently bought a 4 bed Victorian red brick terrace house, full of character in Folkestone and because the sellers had found somewhere to buy she managed to get it for £180k which was £40k less than up for. Result, no financial loss, puts it down to experience and she’s happy near family and friends.The disparity is not so great as you think in some areas and nice ones too, but do your homework.

    Don’t listen to whingeing Fred, it can be done, it has been done, but where he’s wrong is saying now is a good time for the British to buy in Spain when the whole deck of cards could crash sometime.

  36. Dave et al, I’ve caught Fred out, what an idiot he looks now:

    He says ‘so far I’ve only gained from the property markets’, but then contradicts and says ‘I’ll keep my Spanish property until the market recovers again in a decade or so’

    This means he is clearly nursing a rather big drop in value of his Spanish property, so he’s not gained at all, he probably can’t sell which looks as if he wants to by his comments. However he knows he will have to wait 10 years or more.

    This brings me to numbskull Fred’s point that he’s actually got a vested interest in talking up the property market in Spain, hence the reason he mistakenly says ‘it’s a good time to buy’. LOL LOL

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