The Market - Bottomed Or still more to come???

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17 Feb 2007 00:00 by DrK Star rating in London. 15 posts Send private message

We have been considering buying our little dream home in the sun for quite soem time now in the Costa Del Sol area near Estepona (we stay in th Kempinski hotel every year and really like this part of the coast!). We also have friends in Spain who put us off buying last year and from what have seen of the market - it was pretty good advice!

We would really appreciate people's comments who are close to the action so to speak on ideas as to what will happen next 12-18 months! As maybe expected the agents we are in touch  with are telling us that the market is turning - they said thid last year and yet we still see some of the properties they showed us then, on the market today!!

Any help or advice, or thoughts would be greatly appreciated!

Ps. This is a great, informative web-aite - many thanks to those who maintain and update it so regularly!

 




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17 Feb 2007 18:16 by plexx Star rating in Hertfordshire & Elvi.... 131 posts Send private message

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DrK,
I bought off plan on CDS two years ago and now wish that I hadn't. I was told the same as you, but as you know, the market hasn't turned. During this time I have been in touch with several agents and people I know who live out there and the overall opinion is that the market probably has bottomed out and that now is a great time to buy - but not at the advertised price. Some sekkers refuse to acknowledge that prices have dropped. Either that, or they cannot afford to sell at a realistic price. There doesn't seem to be any rush because nobody I know is seriously predicting anything but a flat market for the next year or so. I am certainly no expert DrK, but I have spoken to quite a few professionals and residents and that is the feedback.  Good luck.




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17 Feb 2007 20:05 by DrK Star rating in London. 15 posts Send private message

Many thanks for your thoughts Plexx!



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18 Feb 2007 16:11 by lytton Star rating in Bath & North East So.... 421 posts Send private message

Plex

Why did you wish you hadn't bought off plan two years ago? Is it because you expected a bigger return on your investment or something else. I am buying off plan and, although I'm still concerned that prices aren't rising as much as people say, I'm trying to be realistic and see it as a long term investment, so as long as I cam maintain my payments on the remainder of the price I see it as a good thing...holiday home, investment, the odd rental, etc. I think people like DrK will find Spain very attractive in the long term as long as he doesn't listen to the sales patter and stays realistic.

 

Phil




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19 Feb 2007 15:04 by plexx Star rating in Hertfordshire & Elvi.... 131 posts Send private message

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Phil, the reason I wish I hadn't is simply because I could have done a better deal if I had waited. Spain is very attractive in the medium to long term, but it is even more attractive if you buy at the lowest possible price. I believe that is now, not two years ago.



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19 Feb 2007 15:20 by Rixxy Star rating in San Pedro. 2011 posts Send private message

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Hi Guys - really your are both correct. If you hang in there and use the property as a holiday/second home and keep it for a few years then you will be fine.

Plex - you will have bought at the top end price - especially if you bought off-plan as there are many distressed vendors. However, if you chose a good location and got it at the price you were comfrotable, then you will be fine.

All too often I go to see properties with desperate owners and to be honest they almost unsaleable at any price - north facing, or dark etc etc etc.

Location, location, location is the key with property.

Yes there are many bargains around and there will be a whole lot more by the end of this year. The market has to come back at least 30% to start to become competetive again.

However, people who recognize this as a mature long term market will always buy in Spain.


_______________________

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19 Feb 2007 15:39 by Gillespie Star rating in Costa Calida Area. 608 posts Send private message

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During 2005 almost everyone with a private pension bought 1 or more Spanish properties (Mostly off-plan) looking to cash in when his Gordonness activated SIPP the so called self investment pension plan. It all ended in tears as the IFA´S FSA´s and any other money guru told everyone that you could put your property into your pension fund and reap "never before seen benefits", one major pension advisor wrote an article entitled "pensions are sexy again" So middle England went out on a mass shopping spree for vintage champagn, vintage cars, art and real estate in Spain. Then, his Gordonness announced in a pre budget speech that this simply would not be the case, leaving middle England commited to the eyeballs. Most of the duped investors had no way of paying final installments on their multipal purchases. Soooooo in 2006 as the bad news broke, our industry suffered a mortal blow. Suddenly the market choked with investors disposing of unbuilt properties on unstarted projects. The flood of properties is still there and getting bigger by the day. Yes bargains can be had but don´t expect to move it on until the flood has subsided a little. I reckon 2009 if we´re lucky! By then his Gordonness may or may not be Prime Minister so it could just get a whole lot worse!!!

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19 Feb 2007 16:32 by samson Star rating in Solihull/Benalmadena. 126 posts Send private message

We are considering purcahsing a property from a developer. The property is finished but along with about  20 others out of about 60 has not been sold. The developer has his printed price list with his various prices on for different apartments and we want this apartment with a parking space which is an extra to the price, without us asking he agreed if we do like this particular apartment they will deduct 6000 euros from the price. Is it unheard of to actaully put in offers on new properties? like you would if buying a resale. Most of the devlopments we have looked at seem to have the prices fixed and will not even consider negotiating on the price a little. We was led to believe it is a buyers market at the moment and that there is a glut of properties out there trying to be sold. Has anyone from experience managed to negotiate a better price on a new property?



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19 Feb 2007 16:42 by Gillespie Star rating in Costa Calida Area. 608 posts Send private message

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Samson, Put yourself in the position of a developer. You sell a property in January 2007 to Mr & Mrs X for the list price of say €250,00. 2 months later March 2007 you sell an exact same property to Mr & Mrs Y discounted by €20,000. On completion Mr Y tells Mr X about his bargain and Mr X starts banging on the developers door with a nasty purple face. That´s why developers in 99.99% of cases cannot discount, it´s just plain unfair to the buyers who pay full price and I´m sure you would be angry if it happened to you.

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Business advice and consultancy - Visit www.calidain2business.com

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19 Feb 2007 17:04 by Rixxy Star rating in San Pedro. 2011 posts Send private message

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Samson - developers are a force to themselves. They sometimes give incentives byt they cannot be seen to drop the price to others. Your best bet is a distressed seller from the developmnet who will pass to you either at the price they originally paid for it or in some cases below which means they lose some of their deposit and you gain that advantage as well as the supposed equity in the property.

Go to local agents who will have these distressed sellers atound

Also be wary of a development only partly sold because then after completion time, who pays the community fees? Also if the developer has not sold 50% of the development or even a mere 10% - at any community meeting he will have the majority vote - which in my experience leads to all sorts of problems and the brother in law employed ant massively high wages etc etc etc OR no comm fees paid at all and the development going to rack and ruin!


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20 Feb 2007 01:57 by JeansSis Star rating. 2377 posts Send private message

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This message was last edited by JeansSis on 5/17/2007.



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20 Feb 2007 07:34 by plexx Star rating in Hertfordshire & Elvi.... 131 posts Send private message

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On the other hand, I know of at least two cases where the agent has been willing (desperate?) to slice off some of their commission to a purchaser in the form of discount. Horses for courses maybe.



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20 Feb 2007 08:28 by samson Star rating in Solihull/Benalmadena. 126 posts Send private message

May i thank all of you who have replied to my message. The agent has already said to us she is reducing her commission so we can have a 6000 euro discount. For some background information the property we are looking at is a 3 bed 2 bath apartment. Price 311,000 euros in the brochure it states it comes with a double gargae space,but on there price list they are an available extra. We do need the parking space but they are asking 30,000 euros for it which we think is rather excessive. So this would make the total purchase 341,000 euros. The agent has offered to take 6000 euros from this price. We want to pay 325000 inc the parking. Surely they would be able to disguise the fact we have had a reduction the parking space rather than the apartment, but already the agents attitude is 6000 euros take it or leave it.



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20 Feb 2007 09:21 by Rixxy Star rating in San Pedro. 2011 posts Send private message

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Its a bit of a stalemate and if the agent has registered your name with the developer they wold not be able to deal with you directly.

Keep badgering them or hold out for a while longer!


_______________________

Quite frankly m'dear, I don't give a damn!

www.herbalmarbella.com




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20 Feb 2007 16:30 by tinto. Star rating in Scotland & Nr Estepo.... 243 posts Send private message

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We are trying to buy at the moment what discount would you expect to get off a resale property? In Marbella  Puerto Banus area.



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20 Feb 2007 17:27 by Juan Pánzon Star rating in Marbella. 156 posts Send private message

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Hello Tinto,

I will only be able to answer your question as the thread is too long and I´m tired tired after another "lemon client", those who switch off the phone and when you are waiting for an hour switch off the phone to tell you, sory but I am not going..... so your day, again is ruined..... un-tie the apointments... etc....

If it is a good property, from the developer you will get zero discount... but at some point I think it is fair enough for the developer if he has to make a distresed sale everyonce in a while... if this is considered "treason" by the previous owner, it is not for me to say, but companies run on budget, and in a slowing market, even developers have to make distressed sales sometimes..... but hose are ussualy the most difficult to sell, as they said before North facing, etc...

Sometimes, developers in "dire straits" make tremendous offers" trough agents which telemerketing departments are to be made undersatandable.... obviously those things can not go public and go trough agents who offer those properties at a discount, eventually is an undercovered discount..... and a genuine discount too.... that happens only with bad properties... damned ones....those unselable...

There are better times to buy than others, but still, once the ridicoulous East European fever pases, the south of Spain will still be the California of Europe...there are no places like Spain in Europe and so it will be, we will become more competitive?, yes, I am sure, That only the dedicated ones will survive? Yes, once again.... but for the purchaser, if they want "that" property, you must bid very close not to have the offer rejected. There is a ongoing market certainly... a buyer´s market among the properties that nobody wants, but the good ones? they are sold already or they keep up their price and reject offers.

Cheers and good luck,


_______________________
"I knew a lad that went to sea and left the shore behind him, I kne...



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20 Feb 2007 17:35 by miket Star rating in La Mairena, Elviria. 371 posts Send private message

Hi Samson,

Have you already registered for the development on this forum? There may well be investors willing to sell on their contracts at a discount? There are many investors who have been caught out by the drop in the market over the past 2 years. At the price youre being asked to pay I would suggest there are deals to be had?

You get nothing for not trying!!


Mike T


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Mike T






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20 Feb 2007 17:46 by JeansSis Star rating. 2377 posts Send private message

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This message was last edited by JeansSis on 5/17/2007.



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20 Feb 2007 20:52 by Rixxy Star rating in San Pedro. 2011 posts Send private message

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Hi Tinto - you can get discounts on Banus property but all depends on the owners circumstances. What are you looking for?

_______________________

Quite frankly m'dear, I don't give a damn!

www.herbalmarbella.com




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21 Feb 2007 12:41 by tinto. Star rating in Scotland & Nr Estepo.... 243 posts Send private message

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Decent sized 2 bed , 2 bath with good sized terrace within 1 mile Marbella or Puerto Banus



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