Property prices, bad news continues

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14 Jun 2013 12:20 by elaineG Star rating in Spain . 409 posts Send private message


nuevatribuna.es :

QUOTE:      Housing prices fell 6.6% in the first quarter of the year in relation to the previous quarter, thus registering its biggest quarterly reduction since 2007, the year in which the National Institute of statistics (INE) began keeping this index. 

So still not the time to buy if you are looking at what the lowest prices may become !





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14 Jun 2013 17:41 by bobaol Star rating. 2256 posts Send private message

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According to El Pais, they fell 14.3%. 15.3% for resales and 12.8% for new builds. Still, wait forever and you could use the money for a grand funeral instead of enjoying this glorious country.



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14 Jun 2013 18:12 by elaineG Star rating in Spain . 409 posts Send private message

According to El Pais, they fell 14.3%. 15.3% for resales and 12.8% for new builds.

Was that for the first quarter of 2013  too ?

 

Still, wait forever and you could use the money for a grand funeral instead of enjoying this glorious country.

Well as I am 43,  I reckon I can wait a little longer before the box beckons !!!!


 





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14 Jun 2013 19:36 by bobaol Star rating. 2256 posts Send private message

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 Yes, same quarter as the other one quoted.

Full article is here 





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14 Jun 2013 19:39 by acer Star rating. 1415 posts Send private message

There's an expression about lies, damn lies and statistics and newspapers are the worst purveyors of these.  I have about the same level of trust in newspaper headlines, as I do with solicitors.

You can live in a tent until you reckon prices have hit rock bottom, or more likely decide to rent.  Then the questions becomes am I paying more in rent than I might lose in a property price reduction?  IMHO renting a place only makes sense for a short time to get to know an area, but beyong that you're in limbo and you may have a sh*t as a landlord and also there's not much point in making the property nice etc as a tenant.  So you're kicking you heals for a few years.

On the other hand this is a fantastic buyers market, so you might be best off to get the place you really want now rather than keep paying rent for a few years and end up with a really cheap place that you doesn't really suit you.

 



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14 Jun 2013 22:20 by Julianx Star rating in Spain. 64 posts Send private message

Acre      On the other hand this is a fantastic buyers market, so you might be best off to get the place you really want now rather than keep paying rent for a few years and end up with a really cheap place that you doesn't really suit you.
 
Another quote:-   The decline in prices of dwellings on the Costas have seen the largest devaluations since the start of the crisis.  As shown by TINSA*, between December 2007 and April 2013 housing declined in Spain by 37.2%, but by 45.1% on the Mediterranean coast. 
 
That quote makes me glad  I bought my present home in 2002. I was also fortunate that the new property, which had been contacted by another person whilst in the planning stage, came back on the market six months before completion, but I was able to buy it at the original price, reflecting a considerable discount in the region of 40% on the current market value at that time.
 
Assuming my home continued to rise between 2002 and 2007 along with the market in general, if I have now lost 45% on the 2007 value, I estimate that I could today sell at a ‘bargain price’ and still walk away with a reasonable profit.
 
I cannot imagine that anyone buying today will show a similar profit for a very long time.
 
If those who bought in 2007 had instead had the foresight to rent, then the 45% loss they have suffered in it's value,  would by now be considerably more than they would have paid had they rented instead of buying.
 
(Example:  My property was worth about 300,000 euros in 2007, 45% of that is 135,000. A fair rent for my property since 2007 would have been less than 1,000 per month, so one could rent for at least 11 years, before buying would have been a better bet. And that is assuming prices don’t continue to fall, as they probably will. A person renting  saves on other ancillary expenses which the landlord may bear e.g. IBI, Community charges, maintenance.    If the renter had bought,  then they would also have either mortgage interest to pay, or if they had cash, have lost the opportunity to use that money for another purpose, or have lost at least bank investment interest during that time. Even in a bank at a 'low average'  2%, after tax,  that would have been 6,000 p.a. or six month rent, which since 2007 would have amounted to 36,000 plus compound interest, or another 3 years rentals.  So in total around 15 years renting, before reaching the point where buying might have been better. And of course during that time having the flexiblity to move anytime you like without having to find a buyer, incur agent and legal fees etc )
 
If the trend continues,  then renting may still be the very best course for some time to come.  Of course I don't expect anyone connected with the business of selling property to show they agree with this !  And, if I were selling now,  I too would not express this view and would enthusiastically disagree with anyone who did..

 

* www.tinsa.es/en

 Tinsa   (claim to be )  a leading multinational company for real estate valuation, analysis and advice. It began operating in Spain in 1985 and since then has consolidated its leadership position every year in terms of the geographical coverage of its work, its volume, specialisation and reputation. It currently offers integral real estate services and its principal shareholder is Advent Internacional

 


 


This message was last edited by Julianx on 14/06/2013.


This message was last edited by Julianx on 15/06/2013.



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15 Jun 2013 08:54 by bobaol Star rating. 2256 posts Send private message

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 julianx

If those who bought in 2007 had instead had the foresight to rent, then the 45% loss they have suffered in it's value,  would by now be considerably more than they would have paid had they rented instead of buying.

And if they all had such fantastic powers of prediction they would be collecting their lottery winnings every week.  





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15 Jun 2013 08:57 by acer Star rating. 1415 posts Send private message

Julianx - no-one can argue with your figures, but as Bobaol says foresight's a wonderful thing that few are blessed with.  Too many dither because of the uncertainty and are worse off for it.  It's very easy now to get overly excited about past price drops and decide to rent for 10 years and found that it's money down the drain and doesn't work either.

I'm not intending to be contentious, just making the point that all this doom and gloom talk and headlines like "Property prices, bad news continues" might be misplaced.  Moreover living in rented accommodation can be a bad experience - paying deposits that you might never see again, leases you don't understand, not allowed to make the place your own, knowing that you might get kicked out at short notice, unable to get basic maintenance done without asking the landlord half a dozen times.  But I've never rented in Spain and perhaps it's all lovely here .

For me, one of the unexpected delights of owning a property in Spain is the garden.  I must have planted 100/200 or so plants and bushes that are now looking fabulous.  We sit out with a glass of wine and take in the views of it all with the perfume of the Stephanotis and Jasmin which is something to cannot evaluate, but are unlikely to ever encounter in a rented property.

So if I've lost a few quid who cares.  I'm a few years older that ElainG and to me time is precious.


 


This message was last edited by acer on 15/06/2013.

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15 Jun 2013 12:34 by Julianx Star rating in Spain. 64 posts Send private message

Acer, as I said I bought in 2002 and am very contented, but of course one could buy and find they have the neighbours from hell and then it’s a real, expensive, problem to sell and move, whereas if one is renting then one months notice (or even lose the month’s rent) and it’s off to pastures new, with all your capital still earning interest in the bank.


 


This message was last edited by Julianx on 15/06/2013.



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