Upturn in Spanish property sales?

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14 Oct 2015 16:50 by ChrisM4 Star rating in Berkshire. 33 posts Send private message

This article caught my attention, as it refers to an upturn in Spanish property sales: http://www.telegraph.co.uk/news/worldnews/europe/spain/11927577/I-dont-buy-into-the-ex-pat-dream-of-a-villa-in-the-sun.html

I also note some comments by readers about negativity towrads Brits.  I wouldn't know for sure, but based on my limited time there on visits (Benálmadena area) they were charming, despite my limited Spanish.

Just in case it's of interest.

Chris

 

 





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14 Oct 2015 17:28 by johnzx Star rating in Spain. 5130 posts Send private message

Another probably misleading article. 

What does “Britons are buying a fifth of all Spanish property sold to foreigners, new figures show this week” actually mean is real numbers ?  

Extreme example:  Briton’s bought 5 properties out of 25 sold.  That is a fifth,  but would mean absolutely nothing in real terms.

 





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15 Oct 2015 09:17 by Hephaestus Star rating in The Peak District Na.... 1238 posts Send private message

Statistics, statistics and damned lies comes to mind, there was a recent episode of 'A place in the sun' where a couple were looking for a 2 bed property in the Murcia area for a maximum price of £35K. There was no shortage of these, even though they were rough and needed work I would have thought that they would have been snapped up, but apparently had been on the market for ages. 



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15 Oct 2015 22:21 by DuncanMcG Star rating in Manchester, UK. 377 posts Send private message

DuncanMcG´s avatar

There is a mass of unsold properties built during the property boom prior to the world financial meltdown that is why there are many available at very low prices.

There is also a large backlog of foreigners looking to buy their holiday/retirement home in the sun who have been deterred for almost a decade by the world economic crisis and lack of mortgage availability.

IMO we are starting to emerge from the longest and worst world depression since the Great Depression. Banks have started lending again. People have started buying again.

The GBP to EUR exchange rate is clearly the reason why the Brits are leading this pickup in sales.

As more and more buyers are stirred into action and less and less properties are on the market there is only one way for the market to go. IMO it will be a slow reawaking over the next year or so which will accelarate over time. Prices won't get back to peak levels for a decade, but they wiil get there. The recovery has already started.



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16 Oct 2015 05:29 by Tadd1966 Star rating in Los Montesinos. 1757 posts Send private message

Duncan

Nice to read a positive slant☺

 

Sadly the doom and gloom brigade and the know it alls will bring the negativity back soon though

 



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16 Oct 2015 13:29 by Hephaestus Star rating in The Peak District Na.... 1238 posts Send private message

Had we sold up in the UK prior to the 2008 crash and spent the total proceeds on a Spanish property we would have both sold and bought for circa £300K. If we had then decided to return to the UK in 2015 and wished to purchase a similar property to the one we sold back in 2008 it would cost us circa £325K, my question is, how much would the Spanish property have sold for? 



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16 Oct 2015 13:43 by Sanchez1 Star rating. 853 posts Send private message

From speaking to estate agent friends and following the market over the last year in my local area, it does seem as though the market has turned and prices seem to be on the up.  The latest government statistics confirm what I've been seeing and hearing.  It's not surprising really given that the Spanish economy is recovering strongly and the euro/sterling exchange rate is pulling in UK buyers.

 



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16 Oct 2015 14:32 by johnzx Star rating in Spain. 5130 posts Send private message

Bit of maybe good news for the property market: 

I saw an article today, which gave actual numbers rather than gobbledygook, smoke amd mirrors percentages, that the number of construction projects this year is equal to that of 2010.   

Of course that was three years after the bubble burst,  so maybe not as good as it might seem at first glance seem.





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16 Oct 2015 14:43 by floella Star rating in SE Spain. 756 posts Send private message

2 properties sold recently in my area. Both vastly reduced.though from €400k to € 250k so both vendors took a big hit from when they purchased 10 years ago.

 





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16 Oct 2015 16:19 by DuncanMcG Star rating in Manchester, UK. 377 posts Send private message

DuncanMcG´s avatar

Just to add some more meat to the bones here's an article that puts some numbers on the foreign sales:

In absolute terms, the number of purchases by foreigners is increasing to over 42,000 in a year with close to 11,000 transactions quarterly, and over 42,000 in a year.

According to figures from the Ministry of Public Works sales to foreign residents in Spain increased year on year in the latest quarter by 17.2%, the 16th quarter on a row of growth to this sector of buyers.

The nationality with the greatest volume of home purchases is the British, amounting to 19.8%, and it is suggested that this is due to the UK’s economic recovery and currency rates which give buyers more euros to the pound.

French buyers accounted for 8.1% of sales to foreigners, Germans 7.6%, Belgians 6.4%, the Swedish some 5.5% and Italians 5.3%.

http://www.propertywire.com/news/europe/spanish-property-market-buyers-2015101611102.html

Also fotocasa.es is a great source for current and historic property prices.

The longer term view from the peak in Q3 2007 shows the downtrend has been broken and average prices have been bumping around the bottom between 1.656€/m2 and 1.618€/m2 since June 2014

The long term price chart view might show the beginnings of a rounding bottom (no jokes please!) time will tell. In the year view, the average price per square metre bottomed in March and has been rising slowly ever since


This message was last edited by DuncanMcG on 17/10/2015.

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16 Oct 2015 17:24 by DuncanMcG Star rating in Manchester, UK. 377 posts Send private message

DuncanMcG´s avatar

Hephaestus wrote: "Had we sold up in the UK prior to the 2008 crash and spent the total proceeds on a Spanish property we would have both sold and bought for circa £300K. If we had then decided to return to the UK in 2015 and wished to purchase a similar property to the one we sold back in 2008 it would cost us circa £325K, my question is, how much would the Spanish property have sold for? "

A lot would depend on location. More desirable locations such as the Baleric Islands, Barcelona and Madrid with fewer empty properties have fared better than those with massive over supply and falling demand such as the Costas.

 

€/m2

Drop to

 

 High 

 Low 

 Now 

 Low 

 Now 

Balearics

2762

1764

1848

-36%

-33%

Barcelona

5378

3143

3442

-42%

-36%

Madrid

4478

2579

2737

-42%

-39%

Andalucia

2509

1410

1440

-44%

-43%

Murcia

2162

1149

1193

-47%

-45%

Valencia

2430

1270

1290

-48%

-47%

Also, British property prices have fared better in the South East than elsewhere.

You can get a fair idea of average prices by looking at the Economist Global House Price Chart

Select Britain and Spain and then move the slider to Q3 2007 and you will see that average British house prices fell around 15% by Q2 2009 and have been on the up since and now stand at about 15% more than in Q3 2007. Average Spanish prices continued to fall, losing almost 40% of their value by Q4 2013 and have been rising since and are now around 35% down from Q3 2007.

Assuming someone sold their home for £300,000 in Q3 2007 and bought in Spain and decided to sell up now and move back to Britain, they would only get around £200,000 for their Spanish property and to buy similar to what they had in the UK would cost £345,000.

This of course doesn't factor in exchange rates. Currency fluctuations would mean that their £300,000 would have bought them a €450,000 home. After taking a 35% hit this would fall to €292,500 which at today's rate would get them around £220,000. So £125,000 short of buying back their old home.

Having said that, this is all historical. What this thread is talking about is where the market is now and where it is going, not where it has been. IMO the market has pretty much bottomed (barring some new world economic meltdown) and prices are starting the journey to recovery. In short, it's a great time to buy and a poor time to sell.

Interestingly, if you compare the average Spanish v British house prices since Q1 1971 on the Global House Price Chart, the Spanish house price bubble was much bigger than the British one but both have now come back to meet each other in comparison to 1971 and more interestingly are now tracking each other.


This message was last edited by DuncanMcG on 18/10/2015.

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16 Oct 2015 19:09 by Hephaestus Star rating in The Peak District Na.... 1238 posts Send private message

Good reply Duncan. yes 



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16 Oct 2015 21:30 by ChrisM4 Star rating in Berkshire. 33 posts Send private message

Facts are always useful!  yes





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17 Oct 2015 10:56 by Hephaestus Star rating in The Peak District Na.... 1238 posts Send private message

Facts often get in the way of a good story. wink



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17 Oct 2015 15:36 by ChrisM4 Star rating in Berkshire. 33 posts Send private message

Something all UK papers firmly believe in. no

That, plus the modern trend to report on what so-and-so is going to say later today; 'report' on it (on the level of a schoold child); then tell us what we should think about it.

Just as good I've always been a rebel. cheeky





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18 Oct 2015 00:47 by DuncanMcG Star rating in Manchester, UK. 377 posts Send private message

DuncanMcG´s avatar

Yeah, it's amazing how many people anchor on past prices rather than current prices. Nobody can deny investment in Spanish property has produced very poor returns over the last decade.

The question really should be, is Spanish property good value now and a good investment? For me the answer is unquestionably yes. It has been for a couple of years.

The next  question is whether now is the right time to buy? Could prices go lower? Well of course they could, but IMO it is unlikely they will and even if they do they won't go much lower.

How could property at a price 50% higher than it is now be a good investment but not a good investment now??

To put this into perspective, a property selling for €100,000 at the peak is now selling for €65,000. How low could it go? Not much lower IMO. To get back to peak price is a 54% rise from here. How could it be a good investment opportunity at €100k and not a good investment at €65k?



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18 Oct 2015 11:20 by Hephaestus Star rating in The Peak District Na.... 1238 posts Send private message

We could have purchased a small 2 bed front line sea, duplex in Calahonda for €250,000 back in 2007, we could still purchase a similar property in the same place in 2015 for €250,000, this is a fact, make of it what you wish. I watch the property programs and have noted that if a property is located in a good position in a sought after area it has most likely held it's pre crash value.  



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18 Oct 2015 11:49 by ChrisM4 Star rating in Berkshire. 33 posts Send private message

That's very interesting.  Watching the property programmes, it obvious yet still fascinating to see how much one can save by buying even 15 minutes drive inland.  Being close to the coast has obvious appeal, but you have to live in a house and getting more for your money by being further inland gets my vote.





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18 Oct 2015 12:30 by Hephaestus Star rating in The Peak District Na.... 1238 posts Send private message

This is the Real Spain thing that is close to snob value on this forum. If someone bought front line sea, in say Cornwall, there would be very few suggestions that Rotherham is the Real England. We have often stayed at a friend's 4 bed, 3 bath villa with pool situated a 15 minutes drive from the La Fustera coast, it's a lovely villa but after a week in it I start to go stir crazy, I need to be able to hit the beach in a few strides, everyone to their own.         



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18 Oct 2015 12:58 by ChrisM4 Star rating in Berkshire. 33 posts Send private message

That's the thing that (in my theoretical, Spanish property owner lifestyle) would make the most compelling argument to a coastal property; i.e. not right on the main drag/noise, but within easy ambling distance of shops, pharmacy, café, and most importantly for me, people to immerse myself in the language and culture with.

To be able to do that whilst ambling along a coastal bouvlevard must be wonderful.

 

 


This message was last edited by ChrisM4 on 18/10/2015.



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