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07-09-2007, 07:30 AM

According to the Times, the Spanish property market is about to burst. This leaves many sellers, buyers and property owners in an insecure position. What is going on? Is the real-estate market in Spain really about crash?
The Telegraph believes that there is no reason for any panic. In Spain the prices of the houses have been rising through the roof since 1997. Luckily, this increase is stabilizing. This leaves the market with more realistic prices than in the past, with advantages for both sides, chances for selling are higher and it will go faster and buyers pay reasonable prices.
According to the Spanish government the property inflation is slowing down from 18.5% in 2003, 17.2% in 2004, 12.8% in 2005, and 9.1% by the end of 2006. The first three months of this year the prices have increased with 7.2%. That is the lowest quarterly increase of the last few years. After the prices have grown with incredible rates in recent years, property prices are finally stabilizing.
The fact that the Spanish property market is over-provisioned cannot be neglected. Therefore there is a possibility that, in some isolated areas, the prices will slightly drop. But there is little chance that this decrease will occur in all of Spain. The prices of the properties in popular areas like the Costa Brava, Costa Blanca, Mallorca and Barcelona will most likely continue to grow because of their valueâ€“ but more slowly than recent years.
Instead of heading towards an inevitable crash, the Spanish property market is preparing itself for a soft landing. Property owners and buyers around the areas mentioned do not have to fear a sudden depreciation of their properties, since these properties will hold their value in the future.

From realestate-dreams.com

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tenerife estate agent
mallorca property

Homefinder · 07-09-2007, 11:56 AM

Hi Kimberly859

Is this addressed to your clients or the Spanish Estate Agent Forum? I think we all know better than that!
If your figures are correct, and I am not disputing them, then the increase has been 83% in 5 years. This is simply not sustainable.
This kind of increase could happen in a developing area for the first few years but Spain is a realtively mature market. There are 1,000's of reasons why not and Gordon Brown and the Bank of England have been hitting homeowners in England with interest rate increases to stop it happening there at all costs.
If you consider a reasonable figure, say 3%, that is still an increase of 16% in 5 years.

I am sorry to disagree but my feelings are that nothing now can prevent a crash.

I work in Costa Blanca North which is one of the most mature markets of all. Second home developments here started in the late 60's and have continued steadily since. Moraira now has virtually no new building land and the market is nearly all resales.
Here prices peaked at the end of 2004, have fallen steadily since and the reduction has been around 15%
We still have a lot of interest, visits to our websites and viewings but sales are dwindling dramatically. It seems to me that, because of all the publicity about the "Spanish property bubble bursting", buyers are waiting for prices to fall - and that would actually cause prices to fall!
We have talked a lot on this Forum about taking on over-valued properties and waiting whilst the sellers reduced before we could sell. ColinS has written a lot about this and think that it is the only way to properly serve our selling clients. I wonder if he agrees with me that prices still have to come down.

A tidy, modern 3-bed villa with a pool and 800 M2 plot was going for 400,000 in 2004. Now it is 360,000 to 380,000. Our local "benchmark" property has got to come down to 300,000 before buyers start clamouring. That's 25% down since 2004.
What do you think ColinS?

Homefinder

Colin S · 07-13-2007, 04:00 PM

Hi, sorry for the delay replying to this but IÂ´ve been a busy man this week.

In answer to your question as to whether there will be a crash the simple answer is a big fat NO.

There is only one factor at present that points towards a property crash and that is over supply, with under demand due to reluctance and higher interest rates in the U.K. also having an effect.

From my position here on the Northern Costa Blanca we are seeing prices reduce (in some cases substantially) and not before time, with the abundance of re-sale and new development properties on the market, I firmly believe that this will force down the price levels by around 25% over the next 12 months.

Most of the prices on the market we are already aware are overpriced so these properties will correct themselves to normal market value making it more affordable to buy a property.

Mortgage rates and employment are the main factors in property market crashes and both are not even close to suggesting a crash either now or in the near to medium future.

The host of T.V. and Media companies who have built up Spain over the past 10-15 years love nothing better than a shock story and what better to pick on than those who have a property in Spain, telling them the market will crash soon. These people are mostly journalists who do not know much about the Spanish Property market.

If they did, they would clearly see that this market will have a price correction but will be in for a soft landing, even a soft landing has itÂ´s tough times and we are experiencing these at present but IÂ´d give it another 12 months before the market bounces back.

If there is a property crash in the next 12-24 months IÂ´ll eat this computer.

Homefinder · 07-13-2007, 06:28 PM

Thank you for you opinion. I sincerely hope that you are right but, if I were you, I would buy myself a palmtop - just in case.

Does anyone else have an opinion?

Homefinder

Homefinder · 08-18-2007, 04:01 PM

Quote:

Originally Posted by Colin S

Hi, sorry for the delay replying to this but IÂ´ve been a busy man this week.

In answer to your question as to whether there will be a crash the simple answer is a big fat NO.

There is only one factor at present that points towards a property crash and that is over supply, with under demand due to reluctance and higher interest rates in the U.K. also having an effect.

From my position here on the Northern Costa Blanca we are seeing prices reduce (in some cases substantially) and not before time, with the abundance of re-sale and new development properties on the market, I firmly believe that this will force down the price levels by around 25% over the next 12 months.

Most of the prices on the market we are already aware are overpriced so these properties will correct themselves to normal market value making it more affordable to buy a property.

Mortgage rates and employment are the main factors in property market crashes and both are not even close to suggesting a crash either now or in the near to medium future.

The host of T.V. and Media companies who have built up Spain over the past 10-15 years love nothing better than a shock story and what better to pick on than those who have a property in Spain, telling them the market will crash soon. These people are mostly journalists who do not know much about the Spanish Property market.

If they did, they would clearly see that this market will have a price correction but will be in for a soft landing, even a soft landing has itÂ´s tough times and we are experiencing these at present but IÂ´d give it another 12 months before the market bounces back.

If there is a property crash in the next 12-24 months IÂ´ll eat this computer.

Hi Colin S

Your main business is resale property, correct? Like me you operate in an established area, in fact where it all began in the 60's and an area where there is little land available for new development.
We both agree that there will be a soft landing here as long as sellers are prepared to consider price adjustments. I notice from your moraira site that several sellers make adjustments every week. I see this happening all over our area. In fact I publish a Movers and Shakers Page. Right now this is my most visited page. This would indicate that visitors are interested in which properties have sold after a price adjustment.

I believe that there will be a crash, especially in areas of intensive development.

I believe there will be a soft landing in popular areas as long as the sellers and their agents act quickly and sensibly.

You may be interested to note that the price of a typical property in Moraira has appreciated at almost the same rate as a property in London in spite of a fall in value of the Moraira property of 15% since 2004. Moraira-Info.com - Spanish-Real-Estate-Future.

I believe (Pray to God!) that Costa blanca North will have a soft landing.

Will you (and other members) please, please look at the Survey. I am going to put a form on it to make it easier.

Homefinder

ToniW · 09-03-2007, 07:22 PM

Up and Coming Hotspot: Valencia (Spain’s New Barcelona)
August 16th 2007

Valencia is undergoing a similar transformation to the one Barcelona experienced thanks to the 1992 Olympics.

Two major events – the 32nd America’s Cup (which brought a spectacular yacht marina worth 500 million euros) and the upcoming Grand Prix (for which a new Formula One circuit bordering the harbor, Monaco-style, has been built) – are changing the face of the city and bringing billions of euros into the local economy.

Thanks to this, awareness of the city has increased tremendously and investors are beginning to see Valencia’s true potential as a rising star in Spain.

Much like Barcelona, Valencia has a refreshing combination of old city charm, fascinating modern architecture (the best example being Santiago Calatrava's City of Arts and Sciences, which emerges smoothly from the glassy surface of the Turia river) and sandy beaches.

So far investors in the area are predominantly Spanish, but foreign professionals are beginning to get interested in Valencia as a markedly cheaper alternative to Barcelona. New shopping areas, restaurants, hotels and other recreational facilities are springing up along the city’s waterfront, along with improved communication to the area via new metro stations and additional bus stops.

For individual buyers, investing in a property in Valencia is attractive as well. Prices are still on the rise, which is no longer the case in Madrid and Barcelona. What’s more, the average cost of a property is an estimated 40% lower than in Madrid and almost 50% lower than in Barcelona.

Homebuyers can expect constancy from their investment in Valencia because its property market is fuelled largely by people who want to own a home and live in the city, not by flighty investors or vacationers.
A few areas of interest in the city are Rufaza, which offers well-preserved historic buildings with modern interiors; and the seafront area of Cabanyal, within close proximity to the beach and enjoying some of the city’s best restaurants (this area will improve its communication with the city center by an extension of the main avenue into the district).

With an entire old district open for redevelopment and an upcoming high-speed train connection to Madrid, Valencia’s promise for the future undoubtedly makes it one of the most appealing investment opportunities in Spain for professionals and private consumers alike.

Homefinder · 09-03-2007, 11:37 PM

I agree with ToniW except for one thing and that is her reference to "flighty investors and vacationers".
Obviously "investors" refers to those looking for short-term gain and/or off plan profits and, the way things are going, we won't see many of them any more anyway.
However, still a lot of buyers ARE interested in rental income. Most are not looking for anything they could get in (say) London and, as ToniW says, they are looking for second homes. Nevertheless, lots of them like to feel, that once they have made the initial investement they don't have to spend money every year maintaining the place. They are not looking for actual income but just enough to pay IBI, maintenance, community fees, IRPF etc.
Obviously Valencia has no way forward without tourist accommodation. If there are no "flighty investors" who want to let then where do thay stay?
Sorry but I wear two caps and can see both sides of it.

Homefinder

Richie · 09-10-2007, 08:54 PM

Good idea for producing more content in a natural way Homefinder, SE's will love that and you don't see many Real Estate sites producing good discussions like that nice one, I filled one in for you.