What are your thoughts on Spain's economic crisis?

"I understand you have properties for sale is Spain. Even if the fish is rotten, shouting about the worst parts of it will not help you sell, nor the others who are in desperate situations".

Hopefully things may work out !

I don't see this Forum as a method of selling my properties and don't intend to do this by misleading people about the critical economic situation in Spain.  I wouldn't have that power anyway, as it is pretty obvious.  Occasionally I get asked what properties I have for sale and then I let people know, if they ask.  As Ian said, Spain can still be a fantastic place to retire to. 

The reason I started this thread, however, was in order to find out what other people think of what is going on at the moment.  There have been some very interesting observations made and hopefully more will come in.  I do ask that contributors do not get distracted by these little spats, which seem to occur on every thread. 

This time it began with John saying:

"How can we take you seriously?"

Any views on new Austerity Budget & its impacts ???

Unfortunately, it will not help anyone needing to sell properties !

 eggcup - are you an estate agent?

 eos_ian-care to explain why you think that it's cheaper than ever to live in Spain? Only  the smugs on huge pensions are comfortable here. Higher iva affects everyone, food, transport, utilities etc. Expats are being squeezed, regarded as cash cows. Of course many want to return to the UK. warts and all-if only they could sell their houses for more than the derisory amount they're worth at present.

Spot on Camposol !!

Would also be keen to hear from Ian on this.

Thanks,

Harry

PS: Does your comment about returning to UK also include some  retired expats ?

This message was last edited by Harry07 on 27/09/2012.

Hi smugfk.  No, I'm not an estate agent; I used to live in Spain and bought a few pieces of land, one with a ruin on it, a house in a village, built a house on the edge of a village etc.  We moved there when we were only in our thirties and liked to keep busy.  Now, although we pop back regularly, what we've got is surplus to requirements so I am interested in selling some of them.  If you want more details, send me a private message and I'll let you know what I've got.  All the best.

So, eggcup, you are in quite a good position to give advice, I'd say.  You may have answered this before and, if so, apologies for my question, 'Why did you move back to the UK?'  You must have felt pretty secure in Spain to have bought several pieces of land/properties.  Was it the present ecomonic situation that saw you and you family move?

Hi Maddie

Good question, about which I have loads to say, but will try and summarise:

After a few years of sorting out a new life in a new country, taking on various projects, finishing them etc., and with the kids at school and a husband away back in the UK for about ten days each month, there is only so much gazing out over the pool, towards the beautiful mountains that you can do, when you're in your early 40s.  I had a retired English friend who had been busy with her career all her life, so she enjoyed that laid back way of life and got on great with the Spanish pensioners, going to the local 'manualidades' classes, learning how to paint and so on.  And we have other English friends there who are retired and always on the go, with a hectic social life in our small village.  But I think we just weren't ready to 'retire' although we could have behaved in that less busy way if we had chosen to, apart from the ten days each month that my husband had to spend, looking after our UK business.

I think planning to move away is a bit like planning a wedding.  Everything leads up to the big day, but what is to come next is a bit vague - 'the rest of your life.'   I think I pictured life in Spain as being how it was when I was there on holiday.  We spent a lovely week in Javea prior to moving, drinking beers on the promenade, with the kids a few metres away on the beach, in the evening. I pictured them in school in the daytime and then us living a carefree life like our holidays every evening.

However, if you are, for example, a worrier, then moving to another country won't  change you as a person; you take that worrying with you.  And in a new country, when you have small children and are without the extended family, it can be quite stressful, although we did end up having very helpful Spanish neighbours and friends.  The children did miss their grandparents, though.  It was also difficult adapting to a new country's culture - not the people, but the bureaucracy.  It could send you around the twist.

After five years, I started to feel something wasn't right.  I think I had it somewhere in my subconscious that anything less than five years wasn't a sufficient trial period and might be deemed to be a failure.   I suppose it was also 'homesickness' - missing that feeling of shared experience that you only get with your fellow countrypeople.  I also felt that if were going to move back we had to do it before the kids were too old.  I also wasn't at all keen on the local Spanish secondary school and couldn't imagine the kids ever going there.  The village school was fantastic though, so they had the best of both worlds by going there and then coming back to the UK.

As it turned out, I must have had a premonition, as by the time we finalised the move and got back, it was all hands to the deck with our UK business.  This is where the 'economic crisis' part comes into play.  We couldn't sit back as much as we had before.  And we also came across other Brits who had had to return to take up the reins more tightly on their UK businesses.  So, if we hadn't left when we had, we would have had to leave about 6 months later anyway, as I would not have been happy with my husband away for more than ten days each month.

The whole thing is very complex and very individual, and I've only explained a small part of it here.  Maybe I'll go into it in more detail another day.  In sum, it was more of a personally influenced decision than an economically motivated one.

For those without access to BBC1, the Spanish economic crisis was just a top news item on the 10 o'clock news...

 Hi Camposol and Harry07, I sincerely hope I didn't offend you with the comment "If you are looking for retirement Spain is cheaper than ever", my intention was cetainly not to insinuate that exp-pats were cash cows by any means. Please let me explain. When I said this, maybe I was generalising a bit but I was directing the comment at those who may consider moving over in the near future. Firstly I meant that property is at an all time low, so it is very cheap to buy right now and one's property tends to be the major ovehead. Secondly most supermarket chains have adjusted their prices so not to create an extra burden with the VAT rise. Mercadona has made an enormous effort not to raise prices and others have followed suit. Eating out and entertainment (except the cinema) is still cheaper than several years back even though VAT has risen, at least in the region where I live.There is ferocious competition between restaurants and venues to win over customers. Rentals are cheaper than ever as there is a desperate need to rent properties to cover mortgages. Mobile phones are cheaper than ever as prices keep dropping and new promotions keep coming in. I now have unlimited calls and internet on my phone for 30euros a month+vat, before I paid close to 90 +vat. However with utilities, prices are unlikely to ever go down, so I personally don't really consider it as I doubt it is cheaper in the UK (I maybe wrong of course). When you say transport I assume you mean petrol, as public transport is very cheap and much cheaper than the UK, as far as I am aware. Petrol goes up everywhere so I don't really consider it a deciding factor, especially as it is still cheaper than in the UK, so if one can afford petrol there I assume they can afford it here. My car insurance hasn't gone up which I renewed recently, so I'm not sure if insurance has really been effected much by VAT increases. Car rental prices are at an all time low, salaries are at an all time low so it's cheap to hire help for the house or the garden, if your finances permit of course. So when taking into consideration the present exchange rate at 1.25 which is much higher than a while back , right now the beneficial rate should overide any increase in VAT. It's not really a bad time to move over here, as I see it. Naturally I totally agree with you that people who were living on an already  tight budget before the VAT increases, will certainly notice it, one way or another,and I include myself. 

 I hope that answers your question.

Many thanks Ian.

Very relevant & specific data - so it appears general cost of living is falling !

Given the severe pressure to raise revenue - I wonder is there a possibility that "perceived" rich expat retirees could eventually become a target for ad hoc special taxes/fees similiar to France & some other countries (tough question) ??

Cheers,

Harry

There was onlyTJ 22 who was spot on, check his original post in 2007.

 Unfortunately I had already paid a fortune for an overpriced concrete box and am stuck with an asset that I paid 230,000 euro for.

An apartment on our complex has just ben sold for 90,000euro!

I wish i had never gor caught up with the fever associated with " a place in the sun " and all the bull that went with it.

All I do now is sit and watch my retirement fund disdappearing. the worst decision of my life.

Spain stick it!

Mercadona has made an enormous effort not to raise prices and others have followed suit.

Ian, are you sure about this?  I've actually noticed that Mercadona's prices have been rising recently.  Carrefour have been aggressively reducing their prices over the last few years though.

opps, another post before I was able to edit mine.

Should have read:- 

 Hi Sanchez

I'm not sure what you exactly mean by recently, if we are talking weeks or months. However I have a very close friend who is an "interproveedor" for Mercadona (exclusive supplier) , which means Mercadona basically tells them at what price they have to sell to them at and how much profit they are allowed to make with them each year. He has told me how much Mercadona has been squeezing them over the last few years and over the past month with the IVA increases in order to keep the basic shopping basket products down to a minimum. Branded products have probably gone up, but Mercadona brands are pretty constant and extremely tight. From what he tells me their Nº1 priority is to keep prices to a minimum, so if it means the "interproveedores" make even less money so be it and if they have to cut on salaries and boost workers hours, so be it. Admittedly I don't like Mercadona as you have to go for their brands as there is very little choice, but that is how they have kept their prices down by changing  the packaging formats of products, reducing the choice and making them more cost effective, ie bigger bottles of ketchup as opposed to smaller ones, and 10 varieties of cheese as opposed to 20. So it is possible that a bottle of ketchup is more expensive now, but you get more in it, so the price to weight ratio is lower. Mercadona started this craze off and since then Consum, Carrefour and Dia are following suit. Consum is now cheaper than a couple of years ago. Carrefour is another ball game though, yes they have a very cheep line too, but it is so big and there is so much choice you inevitable end up getting stuff you didn't really need or intented buying and I always feel my money doesn't go a far there.

 Exactly Tamara it is only a falling asset if you wish to sell. But living iin it means no loss at all.

Your 15000€ car devalues, but only when you sell it.

I think this devaluation of property is causing people unnecessay worry & anxiety.

Just get into it and don't worry about possible losses, who knows what will happen in ten years yime or next week for that matter.