Upturn in Spanish property sales?

Just out of interest can the Spanish younger generation now afford to buy their own place or are they reticent to do so due to the volatile job market? Do they stay at home with their parents for longer periods as in the UK, or has there been an upturn in this sector of the market place? Or perhaps many have moved abroad to seek work? Are the Spanish happy at the downturn in prices which could benefit their own younger generation or has unemployment scuppered these opportunities?

I think this says it all Ads:

But on the other hand the cheaper end of the market is massively more affordable for first time buyers in Spain, than in the UK.

My daughter is looking to buy her first property with her fiance, who both work in London - they are looking at something around the £400,000 mark - and you don't get much for that to be within an hour commute of their workplace.

Whereas in Spain prices are literally 10% or so of the London equivalent (and to a lesser degree other parts of the UK) - but that brings those wage figures into a fairer comparison.

Re the Spanish Property Insight article:

"At the other end of the scale are the provinces of Cáceres, Badajoz y Cantabria, where there were no new homes left for sale by December 2014."

I live in Caceres Province and all I can say is what a lot of cobblers! My nearest village, Villanueva de la Vera, population about 2 000, has entire blocks of apartments that have never been lived in.

Beware all you enthusiastic market watchers and believers. The world’s economy is not looking very positive right now. China is in a major slow down, Europe is moribund; the USA is showing signs of slowing. Commodity prices are on the floor and interest rates are not moving anywhere. A second great recession is predicted by some commentators. On that I’m not so sure but current debt levels in the world are unsustainable. That’s government, business and personal debts.

I guess this comment puts me in the “gloom and doom” brigade. So be it. I did also predict on other forums the last recession long before it happened.

Growth in the UK is also starting to slow, particularly manufacturing and construction. But hey the Spanish property market is immune if you read all the nonsense agents trot out.

Truth is buy a property only to live in as a home and don’t expect a return of any sort. Then you will not be disappointed.

On the other hand some might prefer to cautiously go the route of taking the advice of the doom and gloom merchants with a pinch of salt. 

I only recall one guy who truly predicted the crash, but in reality I don't believe anyone knows the future, be it good or bad.  Life goes on and if I can buy a property now for half the price I might have done a few years it's certainly a thought to be considered.

Absolutely agree Mickey. I believe that the FED will raise interest rates in December and that will spark the cycle and once FED raise UK will follow in Q1 2016. The Euro has been strong and overvalued for several months because it was a cheap temporary haven for investors but this will change as soon as rates start to move and ECB has got nothing left, except to increase QE beyond the current huge monthly levels. Something has to give and it is usually the weakest that trigger the domino effect. Even the most optimistic of us couldn't support the prediction of house price rises in this climate. I think all of us with a sensible outlook are categorised as the doom and gloom brigade because we don’t accord with the deluded ‘rose tinted specs’ crew.

@Woodbug. While I am a paid up member of the doom and gloom club, I don't think there is the slightest possibility that the Fed will increase rates just in time to destroy Christmas sales and any Santa rally. They have left it too late and got themselves into a hopeless position. 

If the Chinese economy collapses then the price of Spanish property is a complete irrelevance in the larger scheme of things. Spain has a surplus of property situated where the Spanish don't want to live, as against say Florida coastal property, that is placing large houses and condos within the budgets of of ordinary Americans, who were previously priced out of the market by wealthy home and foreign buyers.

The facination with second home purchase has calmed down greatly, in UK rural areas holiday cottages have held their pre 2008 values and are being picked up by first time buyers who now find them to be affordable, does this extend to Spanish town and village property that has dropped considerably in value?  As for renting out property in Spain, we stay beach front in a lovely garden apartment in Calahonda, more often than not we are the only occupants in the 5/6 garden apartments, it's nice and quiet for us, but hardly a winner for the owners of the un let apartments.

Well they ain't got much wriggle room left Guy. It was due to happen in early September but the Chinese crash on August 24th put a stop to that. The Wall Street gurus seem to think it is imminent. Anyway, please can you check to make sure that all my subs are also fully paid up for the Doom & Gloom Club - or is it that realists with no desire to wish the price of property up for profit, become automatic members?

Acer wrote:

“I only recall one guy who truly predicted the crash, but in reality I don't believe anyone knows the future, be it good or bad.  Life goes on and if I can buy a property now for half the price I might have done a few years it's certainly a thought to be considered.”

I am a retired investor and was heavily involved in the Spanish property business at one time. By 2005/6 it was clear to me that Spanish property was considerably over valued from any kind of stable base and I got out. That does not mean I was smarter than anyone else. The signs were flashing in Technicolor but the majority refused to see it. There was a sort of collective brain amnesia.

Spanish property today is getting close to its realistic and sustainable value. The fact that it’s half the price it was during the madness is not any kind of yard stick worthy of consideration. It does not represent any sort of bargain. It simply reflects the current economic realities. Those realities are over supply the incomes and prospects of the population and controls on the lending money supply.The Spanish government has also imposed their own set of controls with taxation and high purchase costs. There is in short a continuing crisis of both demand and supply

So faced with these headwinds and the ones I have already mentioned in the previous post I think it is safe to say Spanish property does not represent any form of investment a sensible investor should touch with a large elongated pole.

Aye, but if your prime reason is somewhere nice to live or a bolt hole in the sun, then why not ? Same goes for UK property outside the SE England. Not a great "investment" that'll bring you good returns, but a place where you like to live. Is happiness an "investment" ?

Perhaps the question to ask is, given the insecurities identified, are investment opportunites in Spain now only the preserve of large investors, and those seeking lifestyle bolt holes only the preserve of those with adequate financial reserves to act as fallback if recession remains a distinct possibility?

johnmcmahon,

You are so right, there is no point in me wishing that our property will fund the purchase of something similar in the SE of England, however we do enjoy a more enjoyable style of life away from the hussle and bussle of the comuter corridor.

As for Spain, we will continue to rent beach front in nice propertties with all the mod cons and let someone else have all the worries and costs, and if applicable, all the appreciation.

I don't think happiness is a by-product of property owning or investment. If you believe owning a property in Spain will make you happy you’re in for a disappointment. We all need somewhere to live. It's HOW you live that brings that elusive contentment. 

The Spanish property market historically since Franco had a periods where investment was solid. When I speak of investment I actually mean percentage return on capital that justifies the risk. That time may or may not return for a while in the future. However the risks are substantially higher now for so many reasons. So it follows then that if risk is much higher returns must reflect that risk.

Consequently I believe the Spanish market today and tomorrow is very unlikely to deliver any sort of satisfactory return on investment, even starting from a very low cost base.

A place to live however is entirely a different kettle of fish

Oh Heph! Heph!

What have you done? What would Zeus and Hera think? It's "hustle and bustle" not "hussle and bussle".When the Daily Moan readers,freelance scribblers and "My Incredible Life Working at Belvedere Sewage works" authors spot your mistake,they will be on it like moscas on merde.Just recall what happened to the poor soul who misspelt "tapas",his calle cred was gone forever.

Read no further if you are perfectly content living in Spain and have no interest in ever returning to the UK.

Otherwise,top hombre for the points you make.Unless one has an excess of FY money,one would be very unlikely to be able to afford to return to say Dorset,London,Devon,Bucks,Oxon etc,having sold up in say Torrevieja or some dustbowl 15 miles inland of a Costa.However, £90K "large" (youngperson speak!)would still get one into say Peterborough,£150K into Hastings,Margate or Dover (Handy for France) or £90k into Morecombe (a very nice place I am told,but I never venture further than Luton,not possessing a hairy chest,gold chains or medallions).

Obviously,one wouldn't get get a pool,terrece or land for that kind of money in the UK,but what with it raining for 370 days a year,not having any money 'cos it's so expensive to live in the UK,and dying prematurely 'cos of the state of the health system and drinking 7 bottles of wine a day and collapsing into the gutter,it won't bother one too much.

Finally,let us say that in 2007,Immobiliere Robbum,Grabbit and Runn sold £50000 units at £100,000 (sorry no Euro thingy on keyboard) .In 2015,by some miracle,they move 3 at £102,000 in the same place.This means prices have gone up (technically I suppose) and a boom is on it's way? I think not.Concentrate on volumes gang.

Please correct errors at leisure,one cannot expect too much from a bloke with a C+ at English "O"level.

Stay safe November 5th.Be happy wherever you are

Oh no! Heph,just spotted "comuter"not "commuter".Nothing left for it bud,time to get out the hari kiri sword.

KS try ALT GR and $ together and you will produce €. 

I enjoyed your post, however I very much doubt if the reservation dwellers will feel the same, after all they live in the real Spain (or is it reel?).     

KS    With all due respect,  making typos in a post is forgivable, however, criticising others with a post which is badly punctuated and which has spelling error, is rather in for a dig !

MickyFinn,

No disrespect intended but I don't believe anyone can compete with "TJ" on this EOS thread http://www.eyeonspain.com/forums/posts-long-2075p16onddk-.htm    It is by far the most informative thread I've ever read, but you need to put aside a few hours to do so.

In yours of 3rd Nov you say "I think it is safe to say Spanish property does not represent any form of investment a sensible investor should touch with a large elongated pole".  I disagree.  If you buy the right property you can rent it out for 20 weeks of the year for holiday lets and obtain an excellent return with only modest effort. 

With the sad events in Tunisia and lots of other countries like Egypt, Morocco, Turkey etc looking decidedly iffy tourism in Spain is likely to increase which can only strengthen rental prices.  So I would say your comment is far too general.  There are some cracking deals on superb properties, but you need to be selective.

Incidentally I prefer to keep my membership of the Propery Pragmatists Club.

Heph

Thanks for the heads up on the keyboard Euro sign.The things you learn me.I think that our mutual gramma and spellin shortcumings may be down to the constant rain here in the UK,what adols the brain.Lovely to sea you have  a spirited sense of humour.

Two things.The good news.It is inevitable that the numbers of sales in Spain to Brits will rise because the country (GB) is awash with pension wedge and the massive rises in house prices will probably mean folk will release some equity to purchase holiday homes.By how many is anyones guess.

The probable bad news is that if you look it up on Wiki,re sessions (just kidding!) seem to occur about every 5 to 10 (maybe a tad more) years,so by the time property recovers in Spain (that which will recover!) we may all be back in the brown stuff,and the wheels will come orf (kidding again!) purchasing  abroad.

.Anywayz,as they say in France,"Que sera".

Remember,light the blue touch paper tomorrow night and run like the clappers.Again stay safe.

Please correct my (many) errors if that's what gets your rocks off. (Hypocrite moi?)