What role UK played in spanish bubble?

With all my respect towards the country and all the wonderful people there.

What role do you think that UK/ Irish buyers play in Spanish real estate bubble?

What role did some agents such as Mac Anthony, Ocean View, Ocean Estates, Andalusian Dream Homes, Viva Estates?

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In my opinion these companies must take some responsibility for what has happened. They encouraged buying on a huge scale and the methods they employed  were not always legal or perhaps should I say moral. Banks, finance companies , lawyers and others were drawn in by these companies, and their greed and willingness to deal with such people means they are responsible too. Unfortunately those who suffered were the buyers, the companies concerned disappeared having made their millions.Many buyers must regret buying in Spain, nobody forced them to do so but not all bought to make a quick buck,they are victims in all this. Nobody could have predicted what would happen. It is all very sad.

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I never realised how big the bubble was until Bloomberg news reported that the number of emply properties in Spain is greater than in the US.

David

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 As a matter of interest, does anyone have a rough idea of the proportion/split between the number of unsold properties built with foreign buyers in mind and those built for local buyers? I drive all over Spain and everywhere, even in the smallest village, there are blocks of unsold properties. In small towns there are entire suburbs of them. Even if foreign buyers returned, I don't think it would help the banks out that much. 

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The mass downgrading of 16 Spanish Banks by Moodys will not help the situation.

Also four regions downgraded Andalucia, Extremadura, Catalunya and Murcia. The last 2 to 'Junk' status. So what price will the Regions be able to raise money and from who?

This on a day when Facebook raises 100+Bn USD on IPO.

It's a funny old world - wonder what tomorrow will bring?

David

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I thnik GuyT has it right. Foreign buyers were buying almost exclusively on the Costas, and to suggest that the bubble existed only in these areas is a bit naiive perhaps. Some of the foreign owned companies mentioned may have been guilty of dodgy, even fraudulent practices, but I think this came about purely because the opportunity for such activities was presented to them, and the same people have probably moved on to the next opportunity now. After all, who was it who was making millions (billions?) out of granting illegal planning permissions? Whilst dear old Mr.MacAnthony may be up in court for failing to supply furniture packs to the value of €400,000, countless town mayors have been hauled in front of judges on charges relating to figures that make this look paltry in comparison. He's chairman of Peterborough FC, not Atletico Madrid after all! No, I think foreign businesses and buyers only played what role the Spanish authorities and banks allowed them, even encouraged them, to. I really don't think any of them held a gun to the bankers' and mayor's heads and forced them to give easy credit and illegal planning consent. They merely took advantage of the conditions that developed, but probably no more than their Spanish counterparts.

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My sentiments exactly Roberto.

The agents and developers just took advantage of Spain's status quo. Without greedy banks, and a lack lustre justice system it could not have happened on such a grand scale.

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I am actually very puzzled as to why Maria even asked the original question; perhaps I'd rather remain so.
:-(

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Good morning in this rainy Sunday in Spain.

The reason for the original question?

It was just a  way to see what your opinion was in regards of the role that those big agents played in the Spanish bubble, of course just in relation to coastal areas and those areas where properties were exclusively marketed and promoted to mainly Uk and Irish people.

I do of course see that many aspects of the Spanish system: lack of regulation of estate agents, lack of precision of Law 57/68-- open to the fraudulent use of the same by developers and banks--, lack of discipline of Bank of Spain, possibilities for Notaries to authorise deeds without strict checking of licenses till 2007-2008... among many other ones made the afluence of massive credit into Spain grow and run in a semi-wild way. We have been fighting against the terrible consequences of this on UK and Irish people during the last 6 years.... and will continue for some years ahead. No worries about that!

At the same time,  we have heard in many occassions, from our own Uk and Irish clients, how the way these properties and the related finances were marketed and promoted by big Uk/ Irish estate agents made the most important impact on their buying decission and on decission about the lawyer to represent them for conveyancing.

That´s the only reason of my post. We wanted to hear what you think about this. We do of course recognise , with a big regret, all the Spanish features of the disaster: Town Halls, developers, Banks, lawyers.... the whole market just driven by the continuous rain of credit which made many actors lose their right orientation and seek just benefits at any cost.

 

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I guess it has become the modern way to try and deflect blame onto others. I lost money on Spanish property for which I paid almost half - £80k taking into account all fees etc - but did not receive. I blame myself. I trusted people I should not have trusted but the agent was a very small cog in that wheel. Our lawyer was appalling. He couldn't even be bothered to get us the bank guarantee he said we had. He openly admitted two years later he didn't bother 'because the price was so good and the agent told him they needn't bother'. He was the lawyer, he knows Spanish law, it is mandatory to have a bank guarantee for off-plan properties. But he didn't bother. Of course the agent was looking for short cuts but the lawyer knows the law. He should have insisted that the bank guarantee was procured. The bank didn't bother either. Under Spanish law banks have to give bank guarantees to any buyer of an off-plan property. But they didn't bother either, much easier just to throw it into a desk and forget about it. Nor did the 'Law'  bother. The 'Law' knew what was happening but chose to ignore it, much easier just to hope that everything turns out all right in the end. Well it didn't. Tens of thousands of people were taken to the cleaners. The list of the unscrupulous that siphoned away millions and stole from those that trusted them would take a week to read. Most of them are still not bothered. They wouldn't would they? Thieves are without conscience. The Spanish Law Society gives a slap on the wrist to those that are so inept they shouldn't be allowed to sweep the floor in a lawyer's office never mind act as a lawyer. But I blame myself. Another of life's lesson to be filed away and referred to periodically. Now, I wouldn't risk another cent in buying Spanish property. So Maria, forget about agents, they held no power and should have had no influence. If they did it was only because a corrupt system gave it to them. The Law, the lawyers, the banks, the planners, the mayors, the regional governments, the government in Madrid et al, are all culpable to a greater or lesser degree. The agents? I'm sorry Maria, that just doesn't wash. 

 

This message was last edited by robmacm on 20/05/2012.

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Robmacm, so sorry to hear about your experiences, which sadly are also those of countless others. Very honest and noble of you, however, to blame yourself, despite the fact that you were clearly an innocent victim. Whilst I do believe that everyone must accept at least some responsibility for their own actions, I have no doubt that the big agents mentioned sucked in huge numbers of people with their slick marketing and bold promises, people who never thought they would fall victim to such things, that it couldn't happen to them.
I think Maria has made it clear from her last post that the question should have been worded differently - what she meant to ask was what role did these big agencies play in persuading British & Irish people to purchase in Spain, thereby unwittingly becoming part of the bubble. I think it's fairly evident that they played a pretty significant role.
Nevertheless, I'm fairly sure Spain would be in pretty much the same mess it's in now even if these agents and their buyers had been completely absent during the boom. They were merely a symptom, but by no means the cause.

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IMHO, and now in hindsight, the Spanish bubble was always at risk of bursting.

The lack of regulation, transparency and accountability in Spain within the real estate and banking industry (across all professions, not just agents…..), not only allowed these transgressions to occur but they actively facilitated the process.

Only when trustworthy, respected, regulatory professional bodies that have the power to monitor control and deter abuse of this nature are established, alongside an effective justice system that acts within reasonable time constraints to guarantee law enforcement in Spain, will this ever be resolved.

As I’ve said on many occasions…… I live in hope.

 

 

This message was last edited by ads on 21/05/2012.

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I agree totally with Robmacm.  It was the corrupt legal system and the lawyers that have left me out of pocket.  I trusted them and all along they weren't interested in doing what was right for me.  They were just greedy, they have got their money at my expense.  All i wanted was a place in Spain to enjoy with my family.  Buy again - never.  

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 Greed caused the boom.

Greed caused the bust.

Anything else was purely a veichle to assist.

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Greed is prevelent all over the world....it's the "vehicles" you use to control it that provides a more balanced civilised and stable  society. Without regulatory controls in place it's hardly any wonder that chaos rules! 

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 I get a bit fed up with these people who say that anyone buying a 2nd home in Spain was greedy and they got what they deserved. Why? We, and countless others, spent our savings because we thought it was a good investment - it clearly wansn't. A little naive maybe but not greedy. If we'd have put it into shares and they had collapsed, does that serve us right because we were greedy?

 

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I think you are being unrealistic in the current market.  7 years ago we invested £100,000 of our savings in an off plan apartment with the thought that if we liked living in spain we would sell our UK house and "trade up" to something better.  But because we found that we prefer not to live there, it's just turned into a holiday home for us.  We would now be happy to sell and put the money back into my UK savings pot.  Frankly if someone would offer me £50k, I would bite their hand off!  I think, in this climate I would be lucky to get £30k, so we will keep hanging on and hoping that things might improve.  My main concern is that with so many people loosing their homes we will arrive on holiday one day and we will find it full of squatters.

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Example:   I sold a villa in 2002 and a year later.  2003, the new owner was trying to sell it at almost twice the price he paid.

 By 2004/5 when you bought,  the asking price for my old villa might have been treble what I got. Thus a person buying then,  would have seen a much bigger percentage fall in the value than the person who bought from me.

But only time will tell.

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 Ten years ago, we bought an apartment for €106,000 which was £77,000 ish (not including the fees on top).  We sold a couple of years ago for €76,000 or about £68,000 at the rates then.  We note the the same apartment is up for sale now at €59,000 or around £48,000.  Someone who sold the same type in 2008 got €126,000 which was over £100,000 at the rates then.  

I wish I could forecast what property prices would be and the way the exchange rates would go.  About as much chance as winning the lottery, I reckon.

 

 

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