Spanish Bubble Burst

http://www.bloomberg.com/apps/news?pid=20601087&sid=a2DEgwGoH3qA&refer=home

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Hi tish,

This only really matters if you are looking to sell now hoping to make a return on a property bought over the last 2 years or so.

I remember sitting in my office in the UK in the late 80's and reading much the same  regarding the uk market.

It happened and it came back,this is nothing that we were not expecting,unfortunately you cannot have a boom without a crash.

The lifesyle will still bring people to Spain although maybe not the investors at the moment but certainly people who's quality of life outways any capital gain.

Regards

Georgia

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Joined: 12 Feb 2007 Posts: 193

Hi Tish To ad to georgia post ? Is this the same Bloomberg that forecast the stock market crash a couple of months back? Is it the same Bloomberg that I get every month and appears to often contradict its previous months? The recent posting by Barclays talking the market up was irresponsible perhaps this may prove the same. This may just be what the Spanish government need to sort the corruption out as they for sure will want to sort this out as its now hurting them While it’s clear that the situation is not very good posting this as a crash and panic at this stage may very well prove to worry many needlessly as while it clear returns will no where near the level of previous years someone pointed out 10% and for the greedy this is not enough. Not that I am saying there will be 10% growth but this article is clearly this is the result of the Spanish government tightening policy on planning this can be no bad thing in the medium to long term (if true) Where will it end ? To many things out of our control to make a call but its surely going to be a few interesting months ahead. Regards Jim

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This news will not affect me as I have no property  that I wish to sell. However I do not think it is scaremongering. It was waiting to happen. It  is not the news many people will want to read/hear with all the other problems they are having in the Spanish property industry.

Hopefully, it will redress the current situation re corruption in the industry. I do not think you can doubt the stock market figures today. They do the talking.

This message was last edited by Tish on 4/24/2007.

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While the stock market figures do cause concern I think Sunbelts post is a very well informed and realistic view. From the point of view of the Costa del Sol (possibly as opposed to other coasts) it is still well supported by other natinailities and there are some very shrewd people buying here - agreed the amateur investor has disappeared to pastures new but that happened long ago. The smart money is buying into property here as there can be exceptional value for money with so many people wanting to get out. These are not people who buy on a rising market - professionals in the global stcok markets buy stock in a falling market and the same can be said of property - they see it as an opportunity not a threat. Hence the reason the Footsie has gone back to 6000 again after the collapse 7 years ago (or was it 6) - blimey how time flies! In October 87 I lost over £80,000 in a day - over the prvious 14 months I had made about £150,000 - jobbing in and out of the Footise on a day to day basis. It took me a lot longer to make the 150 than lose the 80 but it does illustrate my point quite well. Markets are cyclical and in fact if a trading partner had the balls he was born with on that day we would have made money rather than lost it owing to a short position (sold) we cut too early - it would not have been a massive profit but a profit nonetheless. Much the same can be said of property. People from the UK will be back here, not necessarily as investors but certainly end users are still buying as people want their place in the sun. The general mood of despondency about the situation in the UK, whether it be becuase of politics or immigration or simply the weather (and I know you have had a few good weeks - but what is the norm) will still encourage people to have a piece of this beautiful country and attitude to life.  While estate agents are feeling the pinch there are too many of them to start with. This is simply a period of correction and it has been overdue - prices are not plumeting and I dont believe they will in this part of Spain. The Spanish themselves dont tend to follow the trend of a falling market and chasing prices down.Economics is all a matter of opinion and while I doubt it at any moment there could be news that contravenes what Bloomberg announced this morning. Todays headlines - tomorrows chip paper.

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I agree with a lot of what you say Smiley but not all investors buy a falling market, some are momentum buyers that pile into a rising market, each to their own.
I live in Belfast, Northern Ireland where property prices have been increasing by 4% per month, yes, per month, approx 50% per annum for about 2 years now!
This little ex-warzone I have lived in for 40 years is becoming more expensive than London/SE England! The "experts" are forecasting a slow down this year but they did that last year too.
This is why I'm nervous of selling immediately and making the move. I want to get out as near the high as possible and join the Spanish market closer to the bottom. At the moment every month I wait adds a year to time I can live in Spain without working, if I move to soon and Belfast property continues to rise at current rates for a prolonged period, I've no way of returning.
By bottom, I don't mean nessacarily Spanish property prices falling just standing still for a period of time. I would love to be in the position of buying in Spain whilst letting my Belfast home but I'm not :(
Your comparsions between Spanish property and UK stock market bubbles are interesting. The main likeness I can see is the attitude of the UK media. In the late 90's the UK media hyped up the stock market especially the technology/internet sector. The TV was full of programmes like "Show me the Money" protraying how easy it was to make a fortune Shares tipped on the show rose 10 or 20% within minutes. In true media fashion, they helped build it up, then knocked it down and of course about 6 years later it has returned to normal.
For several years now the media has been full of property investment programmes, "Location, Location, Location," "The Property Ladder," A Place in the Sun," "Home and Away," etc they've overhyped to whole thing. Now the tide is turning and it's time for them to slap it down.
I don't think the downtrend in Spainish property will be anywhere near as severe as the  shock market for a few reasons;

A Spainish property is not just an investment, it's also somewhere to live, holiday or retire to.
Unlike the Stock Market you can't "short" Spainish property in a falling market.
Finally, as Spainish property developers go out of business, supply will eventually dry up.

Stephen


 

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Hi Stephen I dont think I could have put it better myself - personnally I think if you can crack the right deal now is an excellent time to buy.

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stephen in belfast...... yoooooo are on the ball and in control. i been doing this for near 14 years and you got it right. see what i done on www.alansholidayhomes.com   alan.

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