Another Nail in the Spanish Property Coffin

Ian, whilst I agree with some of what you are saying as an ex estate agent (for my sins) in the 80's/early 90's I do not believe it is possible to be an estate agent and be entirely honest.  I say this because no matter how much we like to advise clients on the sale of their property, its all about getting the instruction and in London having boards erected.  If agents were entirely honest they would be out of business, as they just wouldn't get the instructions.  Agents can be highly effective in dictating sale prices and therefore comparables, which I appreciate may not exist in the countryside of Spain.  But in all cities comparable evidence is an important issue, both in a bouyant market and a declining market.    Spain has to get it;s house in order and regarding property sales there has to be more transparency from agents, banks and the likes.

If looking for property at low/no deposit - check out the web site

of the BANK. Their direct deals can  rent at low cost for 2/3 years

(say 300/500e) per month   which is then used as the DEPOSIT.

Often all legal fee's are also included in the deal.This may be an

ideal way to purchase if the family is without any savings.However

it is still important to negociate hard for a good priced property !   

Hi Woodbug,

sorry, very sorry, was that too "down to earth" for you.

I guess your ilk is that of Chartered Surveyor.

Well I am afraid I do not have your ego or perhaps even any.

This ordinary joe is full of self doubts and may even be as daft as you say, but he has been around for quite a while on this planet within the construction industry. Even now he does sometimes do consultancy work of a sort.

In fact if you would like to send me your last "full structural survey" plus some photographic detail I should be happy to report back to you on it, no charge.

Regards

Norman

 @tonydean marketing your property as if we are in normal times means you will be living in it along time,there is nothing normal about the times we are living in we have just had a global financial meltdown which is on going,spain has seen a massive property boom and has an over suply of housing that will take some time to shift, the price drop we are seeing is just the property market finding the level the property is worth not the bubble inflated price it rose to during the boom.If spain leaves the euro expect those prices to drop further.

Dear Woodbug,

so where on earth do you get the idea that a CS can carry out a visual survey and find structural faults unless the property is already in distress.......for anyone to see.

" My point was, that engaging the services of an individual or firm, qualified to conduct a property inspection WILL reveal all defects in the subject property."

Having been in the industry for a lifetime with Chartered qualifications, I was merely advising the limitations of visual surveys and with this experience I am confident enough to survey properties with the client in tow and directly informed.

not

"other hand, you tell us that you are not sufficiently experienced or qualified to conduct a survey."

I know not what you are from your "ilk" posts but do recognise that you have an immense ego from which you believe you can attack others without reply.

I of course admire that greatly, something I have never had.

If you would like a quote for checking structural calcs' I am also happy to oblige.

Regards

Norman

"They will eventually sell when people realise that the bargain isn't there anymore. Be prepared to sit it out and not to panic. I guarantee it will take just as long to sell at a high price as a low one"

TonDean, im afraid you are completely missing the point, prices in Spain since c.2003 were falsely valued by the banks plus add in the fact this period had an unprecedented property boom which led to prices way above REAL values. Yes, you have a nice villa in a nice area but the land values are not Monte Carlo, the area is not London or Paris etc so you have to realise people are not holding out for "bargains", most buyers now realise what the real values should be im afraid. Just look at what prices were  in the region around  1999 and you will get an idea, how could they have realistically risen by 300-600% in 4-5 years!?

I have seen 3 bed villas with pools on 500sqm plots in Quesada marketed for c.210,000 euros so i suspect another 20-30% needs to come off to appeal to most buyers, yes of course you might strike lucky with someone who falls in love with your property and is willing to pay way over the odds. Remember a property is worth what someone is willing to pay, more relevant here in Spain than Uk where valuations are a lot harder to assess, the proof of this is recently 130 apartments with sea views sold in 1 week in Costa del Sol, Why? Because the boom/fake valuation price of 450,000 euros for the 4 bed attico appt was reduced to 110,000 euros and 55,000 euros for 1 bed.

Also, not all agents charge 5% commission, a lot charge a lot less now but more importantly than ever, you need to market your home, make it stand out from the rest, how do you expect to do this if you are cutting out the main marketing tool that can reach many potential buyers, the agent!?, not a good strategy, just use agents that maybe attract buyers from different countries etc, spend some money on a house makeover to make it stand out but the price has to reflect reality and not our perceived values, we all think our valuables are worth more than they really are! Suerte.

This message was last edited by ojosazul88 on 15/08/2012.

This message was last edited by ojosazul88 on 15/08/2012.

Wow this is a varied post; from property prices/valuations to the world-wide economy, and from structural calculations to property insulation lol.

Hello all.  I'm not a surveyor, nor am I a permanent resident in Spain, although I do own a finca in Yunqeura and spend a few months each year there.  I've loved reading these posts, and think it's great that there are clearly some very well informed (and it seems well educated) people here who are happy to share their knowledge, which I am also happy to soak up.  I'm really enjoying the posts relating to structural issues as I am a fully qualified mechanical and electrical engineer.  I am currently doing my MSc at Northampton University (very very mature student) so find it fascinating to see the levels of expertise and experience which is clearly evident in numerous posts.  Please keep them coming.

When I bought my finca in 2004 the prices were fairly high, maybe even peaked, so I guess I paid well above what it would be worth now, even with the improvements made over the years.  However, as I have absolutely no intention of selling I sit comfortable with knowledge that how much I paid is how much it's worth, to me.  With this said, one of my friends recently managed to sell their property, and from an asking price of e130,000 accepted an offer of e57,000.   Now that's a pretty big hit in anyone's books.

I'd be interested to see other views on an earlier post which stated " a property is only worth what someone is prepared to pay for it".  Is this not the case with everything we buy? Perhaps I could use a car as an analogy, whereby I saw a Top Gear programme some time ago with the Lexus LFA being reviewed, and at £300,000 the sentiment of the presenters was unanimously "I wouldn't pay that for a Lexus".  However, as they have sold some, it seems some people would.

Anyway, great site, wonderful forum and some fantastic posts.......Thanks.

For many the purchase of property doesn't come down to just money and worth, but a major factor that is often overlooked is the vulnerability factor. Many have spoken at length of the positive aspects of living in Spain which is important but if the vulnerability factors relating to all manner of aspects associated with Spanish property purchase are not addressed effectively, then I think it does a great disservice to the real estate industry in Spain.

What I can't get my head around however is why those within the industry don't come together to try and resolve and influence change from within to address some vitally important aspects that currently inhibit purchase. Has anyone from the real estate industry for instance requested a meeting with the Government to address ongoing issues that impact their industry? Have they formulated any effective solutions that could assist their industry? It’s all too easy to espouse problems but very few appear to be prepared to step up to the mark and be willing to look for workable solutions to many of these problems

Just as a few examples, consider the following:

·         When purchasing property what taxes and outgoings will I be expected to meet? Only recently it was identified that purchasers have had to seek legal council regarding the false assessment of their property and have been requested to provide a significant extra tax payment. And on occasion, when challenged, the tax office have withdrawn the assessment.

Possible solution:  The Government need to issue accurate assessments from the outset so that purchasers are fully aware of their tax requirements whilst also saving time and effort on tax authorities to respond to legal challenges.

·         Two years ago the Government redrew the Coast Line in terms of the buffer zone for Ley de Costas which has now resulted in an owners inability to alter the property, extend or pass it on, and if owners need to sell they have to inform the buyer of its new status. Thus their property is blighted.

Possible solution:  Review Government plans and make provision for fair compensation for those affected through no fault of their own.

·         The Bank of Spain appear to lack ultimate power to force issues when required. Banks have ignored/challenged their responsibilities relating to existing Spanish Law (Ley 57/68) in place to protect deposited monies for offplan purchase.

Possible solution as advocated by Keith Rule (www.bankguaranteesinspain.com).  Establish a financial ombudsman and specialised fast track courts for those who qualify for claims against the Banks.

·         The Bar Association also appear to lack power to force issues when required. For example some Law firms have on occasion been obstructive and unwilling to provide Banking information necessary to make claims against the Bank as per Law 57/68.

Possible solution: Establish recognised accreditation for law firms, which could be withdrawn if they do not meet required professional standards. This would also act as an effective instrument to ensure law firms are made more accountable for other improper actions that bring their profession into disrepute.

·         The lack of timely law enforcement has resulted in many being compromised in their pursuit of justice with major variance of delays across the country.

Possible solution: Provide resource to target the worst performing courts and establish better monitoring procedures to identify those areas where courts are under-performing or where the enforcement of law is being compromised. All too many statistics relating to the actual enforcement of law in Spain are unrepresentative of the realities and the World Justice Project should be reviewing their sampling and monitoring methods to acquire more accurate statistical information.

·         Problems relating to unreliable statistics. Just as one example at present we are told that the total value of Spain’s residential housing stock and land bank has fallen by 6.8pc since the peak, whereas others suggest this study is based on untrustworthy official statistics that understate price declines and suggest that the real fall in the value of Spain’s housing stock is bound to more than 20pc. Likewise for new housing inventory. My point is that how can a strategy for recovery be formulated if the base data upon which action is required is unreliable?

Possible solution: The Government should reflect and re-assess their strategy based on realistic data, and thereby re-establish their credibility in Europe. At present they do not appear to command that trust from either foreign nationals or their own citizens and hiding away from stark realities by manipulating statistics etc will only add to the problems.

I wonder are the Government aware of the impact of this “vulnerability” and continuing distrust on the buying public at large? Do they not appreciate that these realities cannot be hidden from view indefinitely and the impact only adds to the “nail in the coffin of the industry”? Monies spent on resolving these issues by providing greater transparency (as opposed to rhetoric) would send a strong message to potential purchasers that Spain is willing to face up to the problems relating to lack of consumer confidence and take effective actions to resolve them.

Good post, ads, and spot on as far as we're concerned.

We keep looking at properties for sale in Spain as we'd love to own one again. BUT, it's the vulnerability aspect that stops us. We have the feeling that, however careful and informed we are, there is bound to be some hidden apsect of a purchase that bites us in the bum at a later date!  We're thinking...

* increased/new taxes imposed on foreign buyers

* changes to existing rules or new rules that cause a property to be worth far less than we paid for it

* land grab laws that see some/all of our garden being taken and used for purposes that weren't apparent when we purchased

* being sold an illegal build and all the problems associated with this

* disinterest by governing bodies if we found ourselves in a position whereby we needed help to sort out problems with the                building/surrounding land which were not our fault and did not reveal themselves at the time of purchase

There are many more possible problems that could be added to this list.  Just because we would buy a place in Spain as a second home/family holiday home and not as an investment....it doesn't mean we won't come across all or some of the problems listed above

Maddie, thank you expressing our sentiments on this subject also.  The reasons you have outlined and many more are our reasons for not wanting to buy in Spain.  We got badly burnt in Ireland, so we should know better, and do to a great extent.  It is a worry isn't it to think that there could be insoluble problems down the line involved with owning a property in Spain in our declining years.  SUch a shame really as I adore Spain, but do not think we could go through any more rigmarole or bureaucratic hassles at this stage of our lives.

Just to update re my post regarding TonDeans comments that he is marketing his property as if the market were "normal", the link below confirms my thoughts, a spanish property portal offering a 3 bed, 3 bath villa on a 900sqm plot in Quesada with pool for 215,000 euros! and thats just the asking price so i would expect a drop in this price. So a villa on a 500sqm plot would be lower still, cant see much above 150,000 euros being realistic.

http://www.fotocasa.es/vivienda/rojales/garaje-privado-jardin-terraza-trastero-zona-comunitaria-patio-piscina-piscina-comunitaria-oportunidad-en-ciudad-quesada-128642741?opi=1&tti=1&pagination=1&RowGrid=11

I think the price of the property in Quesada reflects the fact that it needs work doing on it!

"I think the price of the property in Quesada reflects the fact that it needs work doing on it!"

If you translate the details, it clearly says property in excellent condition and the photos back that up so dont know where you get the idea it needs work doing on it! Anyway the point i was making, is that kind of price is what the market is saying is a more or less real price.

That property does look somewhat tired and dated, perhaps that's what Wend meant.  If I bought it I would be looking at a refurb for sure.

Inside it's horrendous!