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

OK Folks

All chat seems to be about mainland Spain.

I am considering an apartment in Mallorca, can anyone give advise on property prices on the island, someone told me recently (connected to the Agents of course !!) they are generally higher than on the mainland and that the sales slump has not effected Mallorca as much as the rest of Spain, sounds like a sales pitch to me?

Seb

Rikky

What exactly is it you do not want to respond to, you are starting to worry me????

Seb

Points taken, can I then assume that all the issues raised on these pages are as relevant to Mallorca as mainland Spain?? are there any special issues with Mallorca as opposed to Spain?

If you had a choise Smiley would you buy on the mainland or in Mallorca, you obivously know your stuff so shoot from the hip!!!

Seb

Seb, I can't really give any kind of qualified opinion on this, but I think Smiley is probably right that the islands are no different from the mainland when talking about the market in general. Having said that, it is perhaps possible that there are factors specific to the islands which could create a slightly different situation there.

I believe Mallorca has had relatively strict building regulations in place for some time now, and I don't know that there is the same kind of over-supply there as on the Costas. I may be wrong about that so don't quote me. On the other hand, the real estate market on Mallorca has for years been heavily influenced by Germans, and with their economy in the doldrums, it may be that demand has dropped off significantly also. So I guess one would cancel the other out?

Although you have not said so in your other posts elsewhere, I suspect that you are looking for a long term investment primarily for your own use? If this is the case, you should not worry too much about the relative state of the market. More important to be happy with your choice of property & location. Prices can vary widely throughout Spain anyway, so as long as you are not paying obviously more than for similar properties in the same area, trying to compare with other areas may just serve to confuse you further. If you want to, however, have a look at www.kyero.com and see how much a similar property would cost elsewhere in Spain. My guess is you will find it similar on the Costa del Sol, cheaper on the Costa Blanca (except Benidorm etc.) and much cheaper in Extremadura! 

My own experience of living on Mallorca is that certainly many things are slightly dearer than the mainland, supposedly on account of them having to be "shipped" in. Second hand cars in particular tend to be much more expensive, and in far shorter supply, therefore far less choice. They do tend to have very low mileage though!

I read about this 40% tax elsewhere - probably one of your posts! 40% of what, exactly, and is this legal under EU legislation?

Sorry if I'm sending another thread off topic

That would certainly have a big impact on the Mallorcan market, but I believe German is still the official language?

Over the last week or so there has been alot of coverage in the UK press on the possibility of a property crash in Spain, particularly on the Costas.

There are various ways of looking at it.

1. We've all heard this before in the UK and it's turned out to be a load of rubbish.
2. So what, I've got the dream house I want, I'll weather the storm and enjoy the sun.
3. For investors it's bad news unless of course they haven't parted with cash yet in which case they'll buy when the market bottoms and gain big time when it goes up again. But then of course timing is crucial.
4. Panic stations

It may of course all be rubbish but there are to facts worth noting. Firstly some major Spanish developers saw there shares crash on the Madrid Stock Exchange and secondly we all know that there are way to many villas and apartments chasing too few expats. So may be it is indeed time for market forces to restore the balance.

One possible ray of hope lies in the nouveau riche Spaniards themselves investing in the Costas thereby filling the gap in the market whilst at the same time restoring a cultural balance by introducing some actual Spaniards back to the Costas. So maybe it might all be for the best anyway.

Either way here is an example of an article that ran in the Daily Mail a couple of weeks ago.

... Families with holiday homes in Spain have been warned that a sharp fall in house prices could be just around the corner.

The caution was issued as the value of property companies slumped by up to 20 per cent on the Madrid stock exchange.

On Tuesday, the IBEX-35 dropped by up to 3.5 per cent as speculation grew about the financial difficulties of a major holiday-home developer. It later rallied slightly.

Up to 500,000 Britons have either moved to Spain or own a second home there. Another 20,000 are expected to join them this year. They outnumber any other foreign nationals.

The past eight years has seen a 150 per cent rise in Spanish house prices. Many Britons, who typically buy apartments on the coast near golf courses, have doubled their money.

But experts fear the housing boom could be over. They blame excessive housebuilding in recent years as apartment blocks have sprouted by the hundred along the coast and inland.

Diana Choyleva, a director of economic experts Lombard Street Research, said: "This is not good news for UK investors in Spain. The problem is in supply. We have had over-investment on a gigantic scale and it has already started a slow-down in house price growth...

In todays Telegraph, what next!

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/05/16/cnspain16.xml

Hi All,

This is getting so tedious now!!!!!

The only people all this info will affect is investors.

In all my time as an agent here the percentage of investors that i have sold to is about 5%.

The majority of our clientele are normal working class people that want a better life for them their children or for their retirement.

You cannot put a price on quality of life,standard of living and a longer life expectancy.

Ask yourself when you bought your last house in the UK did you consider market forces or was it because you liked the house and the area??!

Spain is a long term market now and no longer the quick buck mentality,but it will give you a lovely lifestyle.

I have sat through all the documentaries of the last few weeks regarding the problems the uk has at the moment with crime,immigration,race issues and a general downturn in the social standards,if you beleived all of that there would be a very large bang as the last one out shut the door and turned the lights out.!

You maybe think as an agent i am biased and this is purely a pr exercise,but i am very proud of my adopted home,there are so many more positives than negatives to be had here if i didnt beleive that i could not do my job.

The market wil rise and fall and rise and fall again in all probability,but the sun will still shine,the people will still be friendly you can still let your children have room to breathe and you can retire and live on your pension in a country that respects the young and elderly above all else.

My house may well drop a few euros for the time being but i guarantee i will still be smiling.

Regards

Georgia

Hear hear....Totally agree 100% with all of that georgia...well said

Have you been rehearsing that for BIG TREV??

Thanks Pitby-all the doom and gloom gets up my nose a bit!!!!

Gillespie-had it all written down on the back of my hand!

Spoke to the people concerned yesterday(put my posh voice on)i think!

Topping up my tan in anticipation!!!!!!!!!!!!

Regards

Georgia

Sorry rosi n,you crept in while i was posting,glad there are some people out there who share the same opinion.

Thanks for your comments

Regards

Georgia

Point taken Georgia.

Nevertheless I would imagine that there are alot of expats in Spain (working class, middle class - makes no difference) who have, as you say, bought without the merest thought if investment in mind but still would find themselves compromised by a collapse in the market. Not just a dip, but the possibility of a collapse.

We all saw it happen in the UK in the early 90's. Now although that period probably broke some people it certainly affected a whole lot more in as much as their options dramatically shrunk. They were lumbered and couldn't move on until the market eventually started to rise again years later.

For every expat who make their dream come true in Spain, there is atleast one who fails. These people who fail will nearly always need the option to realise the value of the villa to the max if they have a chance of starting again in the UK.

It is this large group life-changers who would come a cropper in the event of a collapse.

That said there is probably a far greater chance of people in the UK going belly up courtesy of Gordon Brown. So ignore all of the above, I'm on my way to Malaga!

Having lived and lost through the late 80's and early 90's collapse in the UK, the big big difference is here the Spanish themsleves are stable - and are buying!

Its the short term speculators who are losing out, not the mid to long termers who do not put a price on the lifestyle and freedom enjoyed here!

All looking good for the 28th guys!!