# The Financial times talks house prices in Spain



## Pesky Wesky (May 10, 2009)

Here's the article, which I understand more or less.
FT.com / Comment & analysis / FT Columnists - Complacent Europe must realise Spain will be next
Cue Mrypg9 et al  to pull it apart
After which, I understand little


----------



## nigele2 (Dec 25, 2009)

Pesky Wesky said:


> Here's the article, which I understand more or less.
> FT.com / Comment & analysis / FT Columnists - Complacent Europe must realise Spain will be next
> Cue Mrypg9 et al  to pull it apart
> After which, I understand little


Great one Pesky even if I did have to register to read it - more junk email 

But absolutely spot on IMHO. Spain is in tatters and until there are dead in the streets no one, including the Spanish, are going to get off their rear ends.


----------



## Pesky Wesky (May 10, 2009)

nigele2 said:


> Great one Pesky even if I did have to register to read it - more junk email
> 
> But absolutely spot on IMHO. Spain is in tatters and until there are dead in the streets no one, including the Spanish, are going to get off their rear ends.


Oh, I was afraid you might have to register. I didn't, but I think it was a fluke. I could do some copy and paste, but I like the Spanish can't get off my rear end!! No, really. I've not been long back from work, have to go out again, and am going to try and sit outside for a bit. I've been doing translations, (anybody who reads my posts will know how much I enjoy that ) all weekend so didn't do much in the way of enjoyment. Still I've got over 200€ more and NO I'm not declaring it - not because I don't want to I might add, but I'm already paying 270€ to be a self employed teacher and if I want to include translating in that I have to pay more, at which point it all becomes a bit nonsensical.


----------



## mrypg9 (Apr 26, 2008)

If someone important in the world of politics and finance says something will happen, odds are it will happen. Contrary to the teachings of Friedman and other neo-con/neo-liberal economists, markets are not rational. So rumour can start panic when there is no real basis for it.
Spain's debt and deficit are per se no worse than many other EU states. Its yield on its Treasury bonds is within the 6% comfort zone.
The underlying and persistent problem is the poor outlook for economic growth. This is a structural problem for which no Party seems to have a solution. Unlike Germany, for example, Spain cannot compete in global markets on a value-added basis. It's in the same unenviable position as Greece and the other peripheral EU states...it can compete only on price. This is not a good way forward as it leads to a downward spiral.
Whoever was responsible for the daft policy of making Spain the Florida of Europe should be jailed as this policy lead directly to the construction boom and the consequent bust and massive unemployment. Most immigrants from Northern Europe are not high-net-worth individuals and the social and economic costs of the failure of so many construction companies are high and lasting.
The real shock will come when the banks are forced to disclose the extent of their exposure to loans to developers. It seems the real problem is not the glut of unsold houses which it's estimated will take at least five years to clear but land held by banks as collateral which will probably not see a single brick laid on it.
The sensible solution would be a devaluation but that can't happen and it's unlikely that Spain will leave the euro zone. No one with real influence has put that idea forward.
I think that the Eurozone's paymaster aka Germany along with other strong EU states should start working on a structured default for the likes of Ireland, Greece, Portugal and maybe Spain. Investing institutions will have to take a haircut, to use the currently modish term.
When you think about it, the high interest rates enjoyed by investors on the Treasury bonds of these states reflected their inherent risk.
So the workers of Greece, Portugal, Ireland and maybe Spain are asked to bear the burden of enabling other European investors to get their money back. Unfair. But then how many of us have investments and pensions held by these institutional investors? 
There's also the point of view that depressing economic demand by drastic cuts in public spending will make it more and more difficult for these peripheral states to generate the growth needed to pay their debts.
Only one thing is for certain: 'ordinary' working and retired people will experience a fall in living standards for some time yet.


----------



## jimenato (Nov 21, 2009)

I wonder when will be the optimum time to buy...:confused2:


----------



## xabiaxica (Jun 23, 2009)

jimenato said:


> I wonder when will be the optimum time to buy...:confused2:


not sure:confused2::confused2:

but we are very seriously considering it at the moment

& I NEVER thought I'd say that


----------



## jimenato (Nov 21, 2009)

xabiachica said:


> not sure:confused2::confused2:
> 
> but we are very seriously considering it at the moment
> 
> & I NEVER thought I'd say that


We are too - but I don't think it's time yet. It's a buyer's market and will be for a year or two yet...


----------



## xabiaxica (Jun 23, 2009)

jimenato said:


> We are too - but I don't think it's time yet. It's a buyer's market and will be for a year or two yet...


we know exactly where we want to be - took us 7.5 years to work it out - there are a couple of likely properties available there

we just have to get a price we are prepared to pay

we realise that the 'value' might yet drop for a couple of years - but this is for a home, not an investment (although prices have been well above what we've been prepared to pay even for a home until recently)

for investment the OH prefers the US


----------



## andmac (Nov 9, 2010)

Good thread!

It's funny, I was talking to my landlord to say I would be looking to buy here in the next twelve months (now money is about to come in after spending six months perfecting my business prior to launch).

He told me not to buy now as some people will come to buy summer homes when it is all nice and sunny. Wait until January when no one is here. Bit like buying a convertible car!

He also said don't trust an estate agent - use your language and local contacts and you will surely find something for 30% of what an estate agent would market a property at!

He also agreed that the country is in a mess and the next 2 years should see a buyers market. My feelings are that for buyers it will only get better before it gets worse!


----------



## xabiaxica (Jun 23, 2009)

andmac said:


> Good thread!
> 
> It's funny, I was talking to my landlord to say I would be looking to buy here in the next twelve months (now money is about to come in after spending six months perfecting my business prior to launch).
> 
> ...


absotively - no agent - local contacts!

the + in our favour will be a cash buy & English owners who are _usually_ a bit more realistic about the 'value' of the property


----------



## Pesky Wesky (May 10, 2009)

Here's an article about the article if you get what I mean
FT forecasts Spain will be next in seeking financial assistance — MercoPress

And here are some gems from that article (Perhaps this needs to be incorporated into the first post??????)



> Münchau says “Spain had an extreme property bubble before the crisis, and unlike in the US and Ireland, prices have so far fallen only moderately” and forecasts prices would have to fall by “another 40% from today’s level”.





> More important the number of vacant properties is about one million, “which means that the market will suffer from oversupply for several years”.





> However there are also good news says FT: under a worst-case scenario, Spain would still be solvent since the public sector debt-to-GDP ratio was 62% as of end-2010, which according to Ernst & Young, in its latest Euro zone forecast, projects the debt-to-GDP ratio to increase to 72% by 2015, still below the levels of both Germany and France.


----------



## bob_bob (Jan 5, 2011)

What worries me about buying in Spain is what the value of the house will be when you pop your clogs, how much will the children end up with? Will they be able to sell a 25 year old villa?

If you have cash then 'buy to rent' in the UK is still a good option if you pick your areas and the rent can fund your property rental in Spain.


----------



## nigele2 (Dec 25, 2009)

bob_bob said:


> What worries me about buying in Spain is what the value of the house will be when you pop your clogs, how much will the children end up with? Will they be able to sell a 25 year old villa?
> 
> If you have cash then 'buy to rent' in the UK is still a good option if you pick your areas and the rent can fund your property rental in Spain.


Bob bob my mother died recently 5 years after my father. They have left my brother and I a big fat inheritance. But I wish they had spent more of it and enjoyed it. Yes it's nice to leave the kids something but they (the kids) might also appreciate very happy memories of you enjoying yourselves and living your dream (sorry Mary couldn't resist it ).

From what my research tells me unless you're in the high end spanish property game they will have to pay either zero or very little tax if there is a will and they'll have a lovely holiday home - not so bad


----------



## nigele2 (Dec 25, 2009)

Just been thinking about when is the right time to buy in Spain (in part stimulated by a load of house ads being dropped in my lap by 'she who must be obeyed)?

For me, and I'm sure many brits, it is not the house price that is the key issue but the exchange rate (middle below 1.13 today). I cannot see value at even today's prices at anything less than 1.20. 

And more news today that the UK is rapidly building its exports and getting a better balance between manufacturing and services BBC News - Exports shrink UK trade deficit in February doesn't give me confidence. Against that background why would any UK government allow the pound to rise? 

I guess if the pound weakens further might it actually give a window for a few of those previously trapped with property in Spain to get out? [In my own case despite my property in Spain loosing 10% of its value in 5 years I'm still sitting on a profit if I sell and convert back to pounds - and it is a profit that Spain cannot tax  ]. More downward pressure.

So needing a bigger property on the peninsula perhaps Bob bob's idea of renting out the UK property and renting in Spain will be the route for me for the next 5 years even though I don't like the idea. Jojo's issues make me shudder and of course being a landlord in the UK is no less hassle.

It's beginning to make my head hurt. Perhaps I'll move to Germany instead - after all that is where the younger generation of my spanish family will be


----------



## bob_bob (Jan 5, 2011)

nigele2 said:


> Bob bob my mother died recently 5 years after my father. They have left my brother and I a big fat inheritance. But I wish they had spent more of it and enjoyed it. Yes it's nice to leave the kids something but they (the kids) might also appreciate very happy memories of you enjoying yourselves and living your dream (sorry Mary couldn't resist it ).
> 
> From what my research tells me unless you're in the high end spanish property game they will have to pay either zero or very little tax if there is a will and they'll have a lovely holiday home - not so bad


I agree to an extent, both mine know I'll spend what I will and they will have whats left. The divorce has left me two houses (one in three flats and both giving good rental income), and the one I live in, I've had a nice lump sum off a pension, another due in four years and I've a house in Winchester coming when an aged aunt shakes off this mortal coil (not for many years I hope as she is a youthful 87) so financially I'm pretty well fixed and everyday think myself lucky for being in this position in my mid fifties, but, I'll not put money into a property that I'm not confident will sell at a profit in years to come and an upturn in Spain could well be after I am gone, the kids could end up with a lot less than I paid for it. At the moment here in Wales I can buy a three bedroom house for about £65k at auction, spend £5-6k on it and generate about £5000 a year income, now thats not a bad return and it will creep up in value every year...Spain has yet to hit rock bottom. I got my first house at age 18 and over the years have bought and sold a good few and I always made good profit so don't want to change my streak now. Remember, buy in Spain and your mobility has stopped in an instant, your stuck; so really put your thinking caps on before committing.

In the meantime I need to rent in November, thats for another thread.


----------



## samui13 (Nov 18, 2008)

nigele2 said:


> Bob bob my mother died recently 5 years after my father. They have left my brother and I a big fat inheritance. But I wish they had spent more of it and enjoyed it. Yes it's nice to leave the kids something but they (the kids) might also appreciate very happy memories of you enjoying yourselves and living your dream (sorry Mary couldn't resist it ).
> 
> From what my research tells me unless you're in the high end spanish property game they will have to pay either zero or very little tax if there is a will and they'll have a lovely holiday home - not so bad


I dont know where you are getting your information Nigele, but I think you might want to have a good read up on it. Inheriting property in Spain if you are non resident is a very costly affair. I am also in the same situation as you. My mother died a couple of weeks ago and my father passed away 6 years ago. I am one of three children and we have already been to see a Spanish lawyer in Spain. My mothers apartment is valued at 200,000E and I am expecting to have to pay ITRO 10-14E for my third of the property. Then this has to be paid in full within 6 months of the date of death, regardless if the property has sold or not.

Stew


----------



## nigele2 (Dec 25, 2009)

samui13 said:


> I dont know where you are getting your information Nigele, but I think you might want to have a good read up on it. Inheriting property in Spain if you are non resident is a very costly affair. I am also in the same situation as you. My mother died a couple of weeks ago and my father passed away 6 years ago. I am one of three children and we have already been to see a Spanish lawyer in Spain. My mothers apartment is valued at 200,000E and I am expecting to have to pay ITRO 10-14E for my third of the property. Then this has to be paid in full within 6 months of the date of death, regardless if the property has sold or not.
> 
> Stew


Stew I know the rules vary between regions and believe that without a will there are potholes (like falling back onto state calculations which tend to be harsher than regional rules) but even so I'm surprised that on an inheritance of 66.667 Es that you are paying so much. At a minimum I would have expected a tax free allowance of between 10 and 15 thousand and a tax rate of not more than 13.6%.

You offer a range 10-14E so presumably the detailed allowance calculation has not been done?

It would be interesting to know what region, if there was a will, what allowances are being claimed, and if your residency in Egypt (?) has any impact. Appreciate that might all be a bit private but I'm sure anything you could share would assist people who may wander by here  Nigel

ps. I believe that you can apply to an extension of the payment period but of course that would attract an interest payment.


----------



## Beachcomber (May 10, 2009)

So now you know! I think there are hundreds of thousands of dispossessed property owners who would not wholeheartedly agree with this bold claim.


----------

