Buying A Property in Spain Just Got Safer - And Much More Affordable!

Published on 2/15/2010 in Buying Process

In Madrid last week Premier Zapatero called for "tenacity, hard work and calm." to get Spain back on its feet as he assured his audience of law makers – and the rest of the known World - that "The solvency and solidity of our country is obvious."

You’d not expect anything less from a loyal and motivated leader of Spain, who alongside his European partners is witnessing the worst economic downturn for many, many years – fighting woeful fires on several fronts. I just wish that even the most cautious politician would readily admit that curing the current ills is almost entirely outside their control or that of any national government or international body.

Real estate keyThis is a hearts and mind operation. It would be all too easy – in the realms of a Glee Club – to chant that “Things, Can Only Get Better” – they could hardly be worse but what would that achieve. I am not advocating any form of sickly cheeriness but we do need to start celebrating the positives as they arise. Equally, I am no apologist for the corruption and scandal that has dogged Spain’s Costas but I am firmly of the opinion that the doom and gloom merchants, Hell bent of collective flagellation, misery, snow, cold (delete as appropriate) should be stopped in their tracks with a firm “Enough”!

I am not prone to embrace conspiracy theories but I am very interested in the power of a collective consciousness to overcome hardship akin to “the Blitz Spirit”. For those of us who live in Malaga province the time has come to “accentuate the positive”.

This year has already seen the Piers Morgan’s TV show that featured Marbella as sending out very positive vibes about this glorious region which so many

expats consider their home. I am not sure that was the intention as the show billed as an expose but it was more of meander through daily lives of some comfortably off people with all the eccentricities and demands that are extensively satiated by a life in the Spanish sun.

Clearly, in Marbella if you go looking for trouble as in Brixton to Toxteth, Saint Pauls to Wythenshawe you’ll probably find it but that pre-supposes that your psyche has its bells rung by an endless fascination with the murky underworld of crime. You know you don’t have to live in fear to feel safe - it can be an ambition in its own right.

So I hear you sigh with eager anticipation – paraphrasing the great Ian Drury - what are the reasons to be cheerful:

1. Apart from few local Marbella papers, I cannot recall seeing any UK national media – many of whom have spent the last five plus years beating up Marbella – announcing the momentous news, after many years in the misery of limbo, that the new Marbella Town Plan (PGOU) has finally been approved by the COTUA, the Andalucía Territorial Planning Commission, part of the Regional Government in Seville, on Friday 29th January 2010.

Angeles Munoz, a one time doctor and now the lady Mayor of Marbella, has ministered with charm, honesty and tact to the needs of Marbella since her election a couple of years back. A tireless campaigner for those potentially affected by finding their property is outside the legalisation of the previous doubtfully licensed properties.

Around 18,000 homes have been “legalised” which mops up all but around 500 properties that remain outside the new plan - the Courts will be kept busy whilst the owners of these properties – mostly bought in good faith – seek to protect their interests which already have Ms. Munoz’s support.

Certainty and reliability, the Mother and Father of confidence has to the greatest extent restored been restore and perhaps we can now say with more than a little justification that Marbella now really is the safest place in Spain to buy.

2. Reuters announced last week (10th February 2010) the Banco de Espana has advised its member banks to devalue those housing assets currently languishing on their books by 20%. This is excellent news for Spain.

Whilst many commentators believe that Spanish property may be as much as 50% over valued, this is a positive step by a national authority to addresses their perennially frustrating liquidity requirements that have acted as a clear disincentive to the banks from addressing their “morosidad” or bad debts. That said many banks including the second largest, BBVA, have surprised the market by setting a higher than expected accounting provision for bad debts.

It is understood that Spain's banks may hold property assets that exceed €100 billion which have been assumed as the developers who borrowed to finance their construction failed to keep up their payments.

This will have a positive impact upon the price that a bank owned property may be expected to achieve.

3. The Euro Sterling exchange rate has improved and is now nearly 15% away from parity – now there’s some progress! It may be short lived but it’s a darn site better than it was.

For many a property purchase in Spain has proved to be highlighted by exhausted frustration, it's often completely justified and its causes are invariably either illegal or, at minimum, unforgiveable. The property market has been dogged by rip off and the "system" is very alien – which I can assure you doesn’t improve with familiarity. But ....  a huge but... I have been here for a while and continue to believe that for my family and I we are still able to enjoy a vibrant and exciting life in Spain; one that offers a wholly viable alternative to the UK.

Yes when it rains - it pours but grey usually gives way to sun even in February! We mustn’t forget that life isn't just about the weather. Coming to Spain is not the answer if you already suffer from the debilitating negativity so prevalent in the UK. It’s not a universal panacea for "all that ails you" but if you are looking for a new direction, where you can allow compromise and flexibility to be present, then think about Spain.

Standing still if often not a great alternative but if the thrill of the new and the undiscovered lights your candle then do it. You'll not replace the UK with Spain - nor vice versa - but if you have the enterprise to come in the first place you'll already know that.

Do you know what – shock - you can even try before you buy! You don't have to buy a property here – you can happily rent short or long term - but I warn you may just fall in love with the place! The sun, the snow, the beaches, the golf, the mountains, the diet, the culture and diversity all make for a complex and beautiful country that is here to enjoyed on its terms.

Go on get a cheap flight to Malaga – there are plenty - and explore.

Written by: Mark FR Wilkins

About the author:The Rights Group SL
0034 600 343 917

© The Rights Group SL 2007 (Marbella)

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K D unn said:
Wednesday, February 17, 2010 @ 10:23 PM

Come on Brits, let´have some support for the elderely expats who are literaly killed and tortured by the Spanish authorities.
Their legal title deeds revoked, (THERE CAN BE NO EXCUSE)
demolition orders for legal titled properties, (NO EXCUSE)
no compensation,(NO EXCUSE)
Let´s stop this nonsense and give as much bad publicity as possible.
Victims who complain are being taken to Court for non specific offences.
Propoganda for the benifit of those with a vested interest, shouting that everything is fine, will only make the situation worse.
Spain could be and will be a wonderful place to live and invest, so let´s stop pretending and push for changes.
At present, even a property priced at €5000 is to expensive, the riskand consequent stress far too great.

Christopher Gamble said:
Wednesday, February 17, 2010 @ 2:40 PM

A great effort.
It has to start somewhere. A butterfly wings that turn into a hurrance!
The more people like Mark and Justin keep the postive articles coming the better chance there is of the major media getting the message and the buyers market chnaging their ideas of buying in Spain.
In other markets and industries the collective players get together and promote their industries and lobby Government such as the car industry.
Where is the associations of property agents single voice on this? What are agents doing collectively to spin positive PR? Who is their PR consultantancy? How much are they prepared to spend and do?
The politicians' expenses scandel in the UK is a valid point in comparison but hardly in the same leaugue as corruption in Spain.
The British Government gave its MP's a good opportunity to clean up their acts a long time ago. They have an ambition to clean up EU corruption and had to get their own house in order first.
What we need is Spain and the property industry to admit openly to its failures and introduce a clear strategy for recovery and rebuilding TRUST.
Two wrongs don't make a right!
Maybe there has never been a better opportunity for the Spanish Property market to become transparent and professionally regulated and turn its back on the rodents that have played their part in its self destruction.
Is there an overarching strategy to do this?
Who are the leaders in the recovery?
Where are the positive NEWS stories on national media?
Without pro-action nobody is going to jump to help are they?
So we expect our property investments to be devalued by around 50% and set at a new level before any confidence returns.
Who in their right mind would buy now before that new level.
As for those caught in the toxic debt and equity trap....what are the prospects and industry advice? Because without it there will only be BAD press.
Justin is making great efforts to throw a positive light and is to be applauded.
What he needs is a total industry backing or approach similar to the banks PR offensive.
This may only happen if the Spanish Banks are seriously danaged by their 'sub-primes' and market collapse that they have to be bailed-out by the EU in which case there will have to be STRINGENT CONDITIONS including wiping out corruption.
It may just need that as the imputus for recovery.
UK seems to have proven their intervention strategy.
Zapatero failed to even mention this black hole in his deficit reduction plans. Why was that?
Because they are passive and expect to be helped I guess. That kind of approach is weak and it will fail.
It it takes a more right-wing approach to sort this mess out then so be it. Something has to be done at a Government universal level.

Dee said:
Wednesday, February 17, 2010 @ 9:34 AM

O listen to the doom and gloom merchants.. if you can only see the bad things in Spain then believe me you would see the bad things in ANY country you live in. Ive been a resident of Spain for 8 yrs.. yes its not UTOPIA for goodness sake but then where is ??? If you try accepting Spain, its people, its customs on the basis of "that is the way it is" instead of constantly trying to change it, and wishing that it was the UK with sunshine then you might appreciate the country and the Spaniards and this lovely country more. As for Spain being corrupt... great coming from a country whose Politicians have just swindled the tax pàyers out of Millions.!!!! . and if Im going to be swindled, cheated and ripped off where better to come than Spain where the BRITISH Tradesmen (cowboys) have got it off to a fine art. This is the coldest winter since Ive lived here... Ive had years where its usual to wear tee shirts in January. Cheer up folks it will soon be so hot you will have something else to moan about.

Clive said:
Wednesday, February 17, 2010 @ 12:19 AM

If you end up saying it is more expensive to live in Spain than the UK, then you have not done sufficient homework, and the best place for you is back in the UK. Spain consists of far more than just the urban sprawls of Madrid / Barcellona / Malaga / Marbella / Torremolinos / Benidorm / Alicante and similar places. If you blinkerdly choose one of these areas, then yes, expect to pay more for just about eveything, and be ripped off like anywhere else in the world.
As it is, I am a pensioner, renting a cortijo in a Spanish village. I run a car as well. However, I pay far far less 'council tax' than in UK; (about 80% less); negligeable water rates; far less for gas and elec; much less for car fuel and tax and mot; vegatables are so much cheaper; a beer at the local taverna - about £1.20; wine is SO cheap as well. And I still have something left over to save for the occasional holiday. And I can arrange a barbeque party 1 or 2 weeks up front, and know that it is not going to rain when the time arrives.
I feel so sorry for people like your commentor no. 1. They are missing SO much of what is on offer here, ie REAL Spain. More expensive in Spain...? Absolutely not where I live.

steve m said:
Tuesday, February 16, 2010 @ 10:09 PM

enjoyed your article but believe that not all you say is correct
yes spain is agreat country but the property market will be depressed for years to come when recovery does come the crocodiles will emerge from the swamp again but if you watch where you tread they need not be aproblem also GB is still a good place and not everone is as negative as you think
I will be retiring to live up in granada later this year which is comment enough

Martin said:
Tuesday, February 16, 2010 @ 9:53 PM

I Have had a house in spain for three years near arboleas,and love it, but i live in the uk and visit as often as i can. I have felt it with the week pound, i do have a spanish mortgage on the house and that is where the exchange rate has hurt the most,However i am certain that like everything, there is always a 5 year economic pattern with property,intrest rates,stocks and bonds, so my advice is to hold on to your spanish assets, and it will come good ,just around 24 months to wait before we get real improvement. All the best Martin

robert said:
Tuesday, February 16, 2010 @ 9:46 PM

spain is a disgrace corruption on a massive scale worse than africa and part of the EEC
so received vast amount of money from thre EEC to build up their backward country
uncontrolled speculative building by Spanish nationals
who ran with the money and drive Mercs instead of riding Donkeys
anyone buying in Spain till this is all sorted out is just stupid
unless they can affrd to loose the money

pete said:
Tuesday, February 16, 2010 @ 8:55 PM

stayed in roquetas de mar just loved the area we go 3 times a year will retire there made lots of friends we email one another and meet up on our hols a beautifull country lots to see and do found it cheap to live foods good try to speak the lingo and enjoy your life

Summer said:
Tuesday, February 16, 2010 @ 7:23 PM

@ James
Yes, living here is entirely different. The same as it is living anywhere you have been to on holiday.
If people don't expect that to be the case, then they are on a n on-starter.

@ Mark
Nice article.
I'm fed up with all the "debilitating negativity so prevalent in the UK" being poured onto Spain.
Life is different here (and often frustrating and downright confusing too).
But it's still a great place to live.

James said:
Tuesday, February 16, 2010 @ 6:59 PM

Sorry don't agree. We did rent for a year with the intention to eventually buy.After renting we decided, thankfully, that Spain is great for a holiday but living here is entirely different, and the gloss soon wears off.If it's not for the weather, why live here. It's now expensive, more so than the UK, the housing market far worse than the UK and the winters are so cold. Afraid can't see any benefits!

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