# Is the Spanish property market about to crash?



## Goldie5371 (20 July 2007)

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 value– 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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## greggy (20 July 2007)

Goldie5371 said:


> 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 value– but more slowly than recent years.
> ...



Unless you're living in Spain, who cares? LOL!
P.S. Jokes aside, welcome to this great forum Goldie.


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## Flying Fish (20 July 2007)

lets do a skasey


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## greggy (20 July 2007)

Flying Fish said:


> lets do a skasey



I can't believe how he never had the guts to come back to Australia to face trial. So many people went broke. But now that he's dead perhaps its best to leave him rest in peace.


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## ta2693 (20 July 2007)

greggy said:


> Unless you're living in Spain, who cares? LOL!
> P.S. Jokes aside, welcome to this great forum Goldie.




There is some ASX listed property shares like VPG who is holding assets in EU. The shareholder of VPG will care.


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## Flying Fish (20 July 2007)

greggy said:


> I can't believe how he never had the guts to come back to Australia to face trial. So many people went broke. But now that he's dead perhaps its best to leave him rest in peace.



True.


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## Yeti (20 July 2007)

Thanks Goldie, used to live in Spain, Costa Del Sol, close to the famous Marbella. Had a Goldie (Golden Retriever) when I lived there  Went back last in 2003. Shock! Real Estate building gone mad. I have heard supposedly learned experts proclaim that the Gold Coast here in Australia has been built-up almost to the limit, they obviously have not been to Spain's Costas.


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## theasxgorilla (20 July 2007)

Yeti said:


> Thanks Goldie, used to live in Spain, Costa Del Sol, close to the famous Marbella. Had a Goldie (Golden Retriever) when I lived there  Went back last in 2003. Shock! Real Estate building gone mad. I have heard supposedly learned experts proclaim that the Gold Coast here in Australia has been built-up almost to the limit, they obviously have not been to Spain's Costas.




You didn't happen to work in a bar in Tossa del Mar by any chance??


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## Yeti (20 July 2007)

theasxgorilla said:


> You didn't happen to work in a bar in Tossa del Mar by any chance??




No, wrong coast  Actually had not heard of it, Googled it, looks like a nice place, beautiful. Tossa is on the Costa Brava though, I lived on the Costa Del Sol.


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## OK2 (20 July 2007)

a large number of high-rise properties on the coast of Spain have recently been built on Government owned land where the local council have given corrupt building permits. a friend of mine had a five generation family terrace home which was prime waterfront but is now sitting two buildings back from the water.

the worst part is that most of the new high-rise properties have already been sold off to individuals who now carry a mortgage on a property they do not and never will own. local councils do not have the infrastructure to support such growth and the original locals obviously want their views back.

one big mess!!!


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## theasxgorilla (20 July 2007)

Yeti said:


> No, wrong coast  Actually had not heard of it, Googled it, looks like a nice place, beautiful. Tossa is on the Costa Brava though, I lived on the Costa Del Sol.




You're right!

Only been there once...trip to remember (or clearly, not quite remember) haha.

Went into the bar and ordered two beers in some bad Spanish and the long blonde haired guy behind the bar says in English, "you mean two beers"...it took us a moment for the penny to drop...he had an Aussie accent.  He just looked at us both and smiled and said, "it's just easier this way".  He was from Sydney and I can say he made a mess of us that night.  Who would have thought in dozey little Tossa.


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## Smurf1976 (20 July 2007)

If the Spanish market goes down then they'll be joining the US.

Are we headed for a global house price crash?

Or another round of inflation?


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## theasxgorilla (20 July 2007)

Smurf1976 said:


> If the Spanish market goes down then they'll be joining the US.
> 
> Are we headed for a global house price crash?
> 
> Or another round of inflation?




I think that the forces in play are slightly different in Europe.  Spain has been playing 'developed western european nation' catch-up since Franco left the helm.  We're talking a multi-decade process and at the beginning Spainish property was seriously undervalued.  In the meantime you've got cashed up Brits with their sterling along with robo-Paddies bringing money into the country, investing and pushing prices up.  I think the stalling of Irish markets are as responsible for suggestions that Spain may also catch its breath as anything.

As for a global house price crash...hmmm, you can wish for it, and wait for it, if you like.


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## Flying Fish (20 July 2007)

theasxgorilla said:


> I think that the forces in play are slightly different in Europe.  Spain has been playing 'developed western european nation' catch-up since Franco left the helm.  We're talking a multi-decade process and at the beginning Spainish property was seriously undervalued.  In the meantime you've got cashed up Brits with their sterling along with robo-Paddies bringing money into the country, investing and pushing prices up.  I think the stalling of Irish markets are as responsible for suggestions that Spain may also catch its breath as anything.
> 
> As for a global house price crash...hmmm, you can wish for it, and wait for it, if you like.




Can I quote you on that? Good luck gorilla


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## theasxgorilla (21 July 2007)

Flying Fish said:


> Can I quote you on that? Good luck gorilla




Of course...which part?   The 'robo paddy' isn't my terminology though


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## son of baglimit (21 July 2007)

OK2 said:


> a large number of high-rise properties on the coast of Spain have recently been built on Government owned land where the local council have given corrupt building permits. a friend of mine had a five generation family terrace home which was prime waterfront but is now sitting two buildings back from the water.
> 
> the worst part is that most of the new high-rise properties have already been sold off to individuals who now carry a mortgage on a property they do not and never will own. local councils do not have the infrastructure to support such growth and the original locals obviously want their views back.
> 
> one big mess!!!




there was a show on TV (abc or sbs) on this subject in the last few months - made for some scary scenarios for the folk involved.


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## JacoRay (23 July 2007)

The spanish property market is very different to other European markets and is best compared with Florida, or your Gold coast. 
There are two major things speaking for rising prices.

1. The people how boast the market is not spanish people but English, german and Scandinavian people. In these contries the prices are even higher than spain.

2. More and more people likes to settle down in Spain. I talked to a taxi driver in London how said, if he just sell he ´s apartment he could buy any house down there.
In Sweden aswell (my parents lives there), there are loads of the generation born in the 40 who made a fortune and are not afraid of staying abroad. 

Its said that 20 million ppl thinking about moving there in the next 15 years.

So what would the downside of buying property in Spain be?
Since most of the people I know moved there, they use it as a second home. And what happends to summerhouses when we get a crash in the property market? They fall. EXTREMELY.

So in the long run its a safe senario. And if you ever go there dont forget to visit Basque in the north of Spain. Is 100 times as beutiful as southern spain.


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## theasxgorilla (23 July 2007)

JacoRay said:


> 1. The people how boast the market is not spanish people but English, german and Scandinavian people. In these contries the prices are even higher than spain.




Yes, it's an unfortunate reality that at this stage it still appears the people of Spain at large don't have that much money.


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## wayneL (23 July 2007)

theasxgorilla said:


> Yes, it's an unfortunate reality that at this stage it still appears the people of Spain at large don't have that much money.



The younger priced out generation are starting to get mightily p!ssed of about it as well. I hear there has been "activism" there.

Not just there, in places in Cumbria and Cornwall in England, there are groups starting to trash empty holiday homes owned by wealthy Londoners... sort of minor terrorism if you like.

Jamie Oliver and Rick Stein (who both have houses in Cornwall) also been threatened as proxy for outsiders pushing up local house prices to ludicrous levels.

Last year I mentioned the possible sociological consequences of this bubble... it's starting to happen.

http://www.contactmusic.com/news.ns...iver threatened by cornish extremists_1034113


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## tech/a (23 July 2007)

*Wayne.*

When in the UK last year had a discussion with friends about their "Villa's" in Spain.

Their concerns were/are well founded as the glut of villas remained (Over estimating demand).
This glut was/is seen by many who are not getting the returns on investment and those like our friends who have one just for a change of pace and culture, are wearing quite substantial losses on initial capital.
Looks like it will be the kids who gain from their parents investments in years to come other than the parents who were expecting the high gains.


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## theasxgorilla (23 July 2007)

tech/a said:


> Looks like it will be the kids who gain from their parents investments in years to come other than the parents who were expecting the high gains.




It wouldn't surprise me if it happens sooner than that.  Less than 10 years, probably more like 5, and they'll be toasting their success as canny real estate investors who got in on the "ground level".  Its a little over 5 years ago that parts of Gold Coast and Sunshine Coast used to suck as far as capital gains are concerned.


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## wayneL (23 July 2007)

theasxgorilla said:


> It wouldn't surprise me if it happens sooner than that.  Less than 10 years, probably more like 5, and they'll be toasting their success as canny real estate investors who got in on the "ground level".  Its a little over 5 years ago that parts of Gold Coast and Sunshine Coast used to suck as far as capital gains are concerned.



Dunno,

Some think we'll (the west) turn Japanese and have a decade of falling prices before bottoming. I'm not predicting, but it's a possibility.


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