Upturn in Spanish property sales?

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01 Nov 2015 20:44 by Roly2 Star rating in Almeria. 648 posts Send private message

Prices on what was Polaris World to double or treble in 10 years?   That is spoken by a man who is very new to the Spanish property market.  Let's hope that crystal ball is right........





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01 Nov 2015 23:34 by DuncanMcG Star rating in Manchester, UK. 377 posts Send private message

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Hi Roly2,

Actually I'm not very new to the Spanish property market or Polaris World properties. I was looking at buying a Polaris World property back in 2005/6. I registered with their site, got all the info, couldn't actually afford a property on Las Terrazas and was looking to buy a 2 bed apartment on Jardines de Alhama.

Working in Corporate finance in a major UK bank, I was very much aware at the time that there was a bull market in property all over the world and decided that the Spanish mainland market was overheated. I started to look at properties on Lanzarote instead. They weren't  quite as high as the Spanish mainland but were still what I considered overpriced. I decided not to proceed.

The property bubble burst and since then I got regular emails from Polaris world. 5% off, 10% off, 15%, 20%, 25%, 30%, 40%, 50%, 60%, 65%, 66% ...

At that point I decided to look again (66% is a key fibonacci retracement target). I looked at the trends, long term (~30 years), medium term (<10 years) and short term (1 year), looked at current sales volumes, prices etc and decided it was a good time to buy.

I think £40,000 for a 2 bedroom apartment in a gated community with beautiful gardens and well maintained pools, a world class golf course, fifteen minutes from the beach, etc etc is a bargain. I actually don't really care if i make money or not. For me, it is a holiday home and I will easily get more than £40,000 of value out of the property over (hopefully) the next 20 years or more.

I find it quite amusing that people who thought properties were good value at 2-3 times today's price think that they are not good value at today's price. They may become better value, they may not. All that matters to me is that I consider them good value now hence the reason I bought. What I am pretty relaxed about is that in ten years time the value of my property will be higher than it is today.  As the advice goes "Past performance is not a guide to future performance." and I am pretty confident that the next 10 years will not reflect the last 10.

Having said all that, the only people who will care about rising or falling property prices are those who will inherit my property from me. I will be happy to just be able to enjoy my holiday home in the sun.

Good luck to all whether they are buying, selling or renting. I am doing none of these. I am a happy owner and very happy with the price I paid.

laugh

Woodbug, of course Warren Buffet would find the idea of investing in Spanish property amusing. He doesn't invest in property, he invests in companies. It doesn't mean we can't learn from him or Benjamin Graham when buying property. Good article on the subject by property geek here What can Warren Buffett teach us about property investment?


This message was last edited by DuncanMcG on 02/11/2015.

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02 Nov 2015 00:26 by DuncanMcG Star rating in Manchester, UK. 377 posts Send private message

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Back to the thread topic, interesting article from Global Property Guide talking about Spanish property market history and recent trends. Dated August 12th, 2015.

I thought this bit was particularly interesting comparing current foreign buyer stats to those in 2007

Foreign investors have started to return to the Spanish property market since the crisis hit in 2008. Of the total of 365,342 homes sold in 2014, foreign homebuyers, both residents and non-residents, accounted for 61,062 units or 16.7% of the home sales transactions carried out in Spain, according to the Spanish Ministry of Development. This was the highest percentage of foreign property buyers recorded in a year.

Of the homes acquired by foreign buyers last year, foreign residents in Spain purchased 56,674 homes while the remaining 4,388 homes were acquired by non-resident foreigners. This was the highest number of properties acquired by foreign buyers since 2007 when foreign residents acquired 87,204 homes while non-residents purchased 9,106 homes.



_______________________
Never wrestle with a pig. You will both get dirty and the pig will enjoy it.



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02 Nov 2015 11:38 by Roly2 Star rating in Almeria. 648 posts Send private message

I am so glad to hear that you do not mind whether or not you make a profit on your property.     And it was you who mentioned the triple or double 'boom' possibility - no one else.   I am not sure that working in corporate finance in a major bank, really gives you the qualification to preach to anyone about 'investment' opportunities.    And registering an interest 9 years ago certainly does not make you an expert on the Spanish property market.   I would never say that these properties are not worth the  money you can get for them, and have been tempted back into the market myself.    (For my own private life style choices - not for profit).   BUT, what is really amusing to me, and I am sure many others who have been in Spain for a very long time, is the idea that in the next 10 years, an apartment on a golf holiday resort, is going to treble in price.  

But as long as we are all still  around,   time will tell.   And no amount of pontificating will be a substitute for the reality.





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02 Nov 2015 12:05 by DuncanMcG Star rating in Manchester, UK. 377 posts Send private message

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LOL Roly2, who rattled your cage?

laugh

Yes, I did say that I expected it would double or even treble over the next 10 years. Time will tell if I my expectations were over optimistic or not.

Preaching? LMAO. I am only offering my opinion and discussing the subject at hand. I respect that you have a different opinion, as you are entitled to, but let's face it your crystal ball is no more superior to mine. I have never claimed to be an expert on the Spanish property market, but I have been following it for a number of years and recently decided it was a good time to buy.

Not sure why you are so angry just because I think the property market will do a lot better over the next 10 years than you do?

*EDIT* Just looked back at your previous posting history. Apologies, you aren't angry because I have a different opinion, you are just angry ... cheer up


This message was last edited by DuncanMcG on 02/11/2015.

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Never wrestle with a pig. You will both get dirty and the pig will enjoy it.



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02 Nov 2015 12:09 by blueeyes Star rating. 64 posts Send private message

Well, one of my local agents clearly thinks like Duncan.

"BUY BEFORE THE BOOM" plastered over his new second office windows!





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02 Nov 2015 12:18 by DuncanMcG Star rating in Manchester, UK. 377 posts Send private message

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I would think that there are quite a few years to go before the next boom blueeyes

This thread is discussing whether there is an upturn in property sales i.e. have we reached the bottom and are we starting to see the green shoots of recovery? I don't think anyone thinks we are in a property bull market yet.

Volumes and prices seem to suggest that it is at least a possibility we have reached a bottom. Increased volumes, stabilisation of prices, rises in some areas. All good signs of a bottom preceding a change in trend.

Cheers



_______________________
Never wrestle with a pig. You will both get dirty and the pig will enjoy it.



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02 Nov 2015 12:19 by Roly2 Star rating in Almeria. 648 posts Send private message

Really DuncanMcG?    That is the best you can do?   I don't agree that property is going to escalate London style and I am angry???   If you have looked over my posts, you will have seen nothing but enthusiasm for Spain, and buying there......





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02 Nov 2015 12:42 by DuncanMcG Star rating in Manchester, UK. 377 posts Send private message

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To get the thread back on topic, there's a good article from Spanish Property Insight about the number of "new" homes in Spain as a percentage of total housing stock

Costas Almeria and Azahar have biggest housing gluts in Spain

The BoS calculated the proportion of new homes for sale as a percentage of the housing stock using data from the Government (Fomento) showing there were 535,734 new homes for sale at the end of 2014, which represents 2.1% of the total Spanish housing stock.

Spain’s new housing inventory fell by 5% in 2013, and has fallen for five consecutive years from a peak of 649,780 in 2009. But despite shrinking for five years, Spain still has a monumental glut of new homes for sale, a testimony to the insanity of its building boom last decade.

There's a good map showing percentage of "new" properties by region



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02 Nov 2015 13:12 by ads Star rating. 4021 posts Send private message

As purchase of Bank property has been mentioned in this thread perhaps its worth re-emphasising to those considering purchasing a Bank repossessed property some uncomfortable facts that relate to Banks who remain unregulated in Spain. You may well be purchasing from a Bank that continues with the following unethical behaviour.....:

A Bank that continues to deny their legal responsibilities according to existing Spanish Law.

A Bank that chooses to ignore Supreme Court rulings as they continue with their manipulative ploys to delay and obstruct innocent claimants to regain return of their deposited monies following proven breach of contract.

A Bank that continues to "jam" the court system with their continual appeals.

A Bank that issued mortgages on illegal properties.

Or perhaps a Bank that fails to pay community fees (thus driving up the costs for those who continue to pay fees on time, as costs of the community facilities are borne by fewer owners) but evict life-long neighbours for falling behind on their mortgage payments.

Apologies for the rant, but its time that these unethical Banking practices were fully exposed and the call for reform and adequate regulation of the Banks is heightened.

For those not so educated as Duncan and influenced by statistical economic data it’s worth repeating the importance to check the UK Government website prior to buying in Spain ( https://www.gov.uk/guidance/how-to-buy-property-in-spain) and remain fully aware of the risks associated with continuing unethical practices, until such time as the real estate industry becomes better regulated in Spain.

As I have stressed on many occasion I live in hope, but it requires all individuals aware of the facts to pressure for reform from within.





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02 Nov 2015 13:19 by Roly2 Star rating in Almeria. 648 posts Send private message

Yes agree ads.   But just to continue with the profit making side of property purchase in Spain, I have just had a look at the Polaris world properties today.   Duncan, I am afraid you may already be at a loss since with the current exchange rate, the asking price of 52000 euros translates to only £37000.  I am pretty certain that this will be a big factor in any increase in property activity.





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02 Nov 2015 13:45 by DuncanMcG Star rating in Manchester, UK. 377 posts Send private message

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You really don't know much about value investing do you roly2?



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Never wrestle with a pig. You will both get dirty and the pig will enjoy it.



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02 Nov 2015 13:47 by Woodbug Star rating. 371 posts Send private message

Buying property in Spain has always been a nightmare with the multitude of laws surrounding land classification, contract and procedures, many that are anomalous or vague, then couple this with boundary, and ownership disputes, add an antiquated house registration system, then throw in inherited debt, embargoes and a complicated tax system, a couple of dodgy estate agents and lawyers and it is not for the feint hearted.

Even if you are prepared to get in the ring with this lot and buy at a huge discount because you can afford to wait for a few years to profit – expect the demand for the undervalue tax at anytime, this can be huge depending on the valuation held at the local ayuntamiento.

All the reports we read concerning price rises & increased sales are all based on figures issued by either the government or those with a vested interest in selling property - all of which are at variance with each other and manipulated to support their cause.

There is not a shred of concrete evidence to support any claims of property price rises nor is there any significant reports of property sales increasing in most of Spain. Of course the UK enclaves (of which there are many) in the Costas are in demand as are life-style and high-end units but for us mere mortals we may as well put our money on a rank outsider in the 2.30 at Aintree as invest in Spanish property. If in doubt – ask Mystic Meg! 





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02 Nov 2015 14:36 by Roly2 Star rating in Almeria. 648 posts Send private message

Well considered post, Woodbug.   Duncan, neither knowledge or interest in value investing.   Must be because I am not an ex commercial - banker was it?  





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02 Nov 2015 14:39 by acer Star rating. 1391 posts Send private message

Woodbug, you say..."There is not a shred of concrete evidence to support any claims of property price rises nor is there any significant reports of property sales increasing in most of Spain"... but it depends how hard you look.

I've been monitoring it for a while and there are signs, but only in some much as there is an increase in the number of sales, prices are static.

It's like towing a vehicle out of the mud, first off you need to take up the slack (the excess number of properties for sale) when these have gone you will see some real momentum and an increase in prices.



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02 Nov 2015 15:35 by ads Star rating. 4021 posts Send private message

Woodbug. Your posting is so true in terms of the pitfalls but so sad when you consider it doesn't have to be like this Why aren't those in the industry striving for solutions and PUSHING for reform from within? If us mere mortals can identify these problems why do we never hear of their willingness to organise as a group to influence and pressure for reform and workable solutions to these major problems?

To deal with all these problems after the event when there should be a system in place to prevent problems from the outset, does little to alleviate people's continuing fears.

 





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02 Nov 2015 15:54 by Hephaestus Star rating in The Peak District Na.... 1235 posts Send private message

As I've previously said, a very good thread, idealists, realists, optimists and pessimists, all of you make a very strong case, keep it going guys and keep it clean. yes 

 


This message was last edited by Hephaestus on 02/11/2015.

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02 Nov 2015 16:05 by Woodbug Star rating. 371 posts Send private message

As I indicated earlier Ace – the figures that are released for our consumption in neon headlines are a collection of numbers that have been taken from different sources and manipulated to suit the cause.

We are told that sales of old houses are increasing but new-build sales have decreased considerably. Many of the stats relate to coastal only and inland areas are not recorded as such and does it come as a surprise that the statistics released include institutional investors who are also in the market.

The likes of Goldman Sachs, JP Morgan, Blackstone are players here and will buy finished or part built developments in or near city centres for silly money for the future for commercial land development. So, if as an example, one of them buys 10 apartment blocks with 40 units in each, that would be recorded as 400 houses sold that month.

In any event, dealing with figures and statements that have no material or tangible proof can be seen as           contra-positive, therefore somebody may be correct, or not.





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02 Nov 2015 17:03 by DuncanMcG Star rating in Manchester, UK. 377 posts Send private message

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Interesting article here from Market Oracle from March 2013 analysing the Spanish property price bubble. It uses standard market analysis techniques. It may be of interest to some.

Spain Housing Market Price Crash Has A Long Way Further To Drop

If anyone wants the housing data from 1987 to present it can be found here. There's a pretty useful charting tool that you can use to look at the short term, mid term and long term trends.

I also stumbled across this article which compares and contrasts statistics from the National Institute of Statistics and the General Council of Notaries. Irrespective of which are more correct, they both point to a stabilisation in the market. I haven't seen any data or statistics anywhere that show prices continue to fall and volumes continue to drop so it is all I have to go on.

The battle between the bears and the bulls won't be won on a bulletin board between enthusiastic new buyers and battle scarred veterans of a massive bubble deflating. It'll be won in the market.

Anyway, I'm going to unfollow this thread now. I sense the bears are getting a bit growly but see little evidence to back up their arguments so any "debate" is a bit pointless.


This message was last edited by DuncanMcG on 02/11/2015.

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Never wrestle with a pig. You will both get dirty and the pig will enjoy it.



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03 Nov 2015 06:09 by acer Star rating. 1391 posts Send private message

Duncan, I like your comment the some "bears" may be getting "growly" - could this be as they think some "bulls" are taliking "bullsh*t" !!!

I suspect some might classify me as a "bull".  I certainly don't think that property prices can fall any further.  If they did they would be less than their cost to build.  There is a constant demand for new property and it is simply not possible that this can be supplied below cost price for anything other than a short period.

Recently in the Murcia area a large number of touristy type properties have been snapped up by groups of investors who will be renting them out to holiday makers.  A renter still expects to pay £500 to £1,000 er week to rent a holiday villa/flat, so why not?  Each unit will provide a nice little earner over the 20 week peak season.

I know that non Spanish sales still represent a small proportion of the total, but this will be a factor and the increased volume of tourists will benefit the Spanish economy.  At the end of the day Spain remains a lovely place to live which is why I believe the recovery will be sooner, rather than later.



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