# If you've ever wondered why there are so many empty houses in Spain



## expatmat

One thing that readily characterizes Spain to the new visitor is the dearth of empty housing estates. 

We were taken to numerous rental properties which on paper looked great but on arrival, you soon realized you were the only living property in the estate. 

Spain built more houses in the 10 year period running up to the crash than UK, Germany and France combined. Current number of empty houses in Spain estimated to be 3 million.

But, while these empty estates may be as Spanish as the green flashes of Mercadona or the rows of unoccupied taxi drivers standing around looking for business, the era of the zombie developer is coming to a close with a "tsunami of bankruptcies".

Eurozone crisis: Spain’s banks pull plug on zombie developers | Mortgages & Real Estate | Personal Finance | Financial Post

I'm not sure how the 2012 decree to accelerate the sale of unoccupied portfolios is currently manifesting but you can be assured of mass fire sales to liquidize stock of developers in administration. Desperate banks are going to take anything to monetize this dead stock.

Now that would be fantastic if Spain was a good place to own property. I'd quite fancy a million euro villa retailing at 300k but who wants to own assets in Spain right now?


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## Pazcat

Well I for one hope they speed up the process, once we get there and start renting we will start seriously looking for a house to buy so the cheaper the better. 
Bring it on.


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## Stravinsky

On my cycle rides I often head off to Pego and Ondara and on the round trip I come down the coast from El Verger. Along that way I pass a number of ghost estates. They were building them when we first came here. Then some stopped, others were completed and just seem to stand empty. In the summer I sometimes stop off for a sit on the beach, and its deserted.


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## NickZ

Why do people think auctioning them off will mean they'll be any less empty?


At this stage the only people buying are going to be cash buyers speculating. They won't be buying to live in them.


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## Dunpleecin

This type of thread always amuses me. It's like investing in the UK is the be all and end all. Someone says "_*who wants to own assets in Spain right now*_?" Well, there are plenty of people in the UK who are suffering negative equity and can't afford to sell their houses because they wouldn't be able to pay the mortgage off even if they do sell. And once they sell, what are they going to buy when they are already in debt with nothing to show for it and have no deposit? As energy prices continue to rise, as well as everything else this government throw at us, people are paying more and more to stay in a house which they have no hope of breaking even on, never mind making money on.

In Spain, a decent 3 bedroom house with 2 bathrooms and sun terraces and balconies can be yours for around €100,000 or even less. The same thing in the UK, in a decent area and of a decent standard is getting on for double that. So, if you're in a position to live comfortably in a nice place in the sun, or be morgaged to the hilt and possibly in negative equity, in a country that is quickly going to the dogs (and I won't even mention the rain and cold which appears to hit record levels every year) which would you choose?


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## expatmat

So you have to own a property in Spain to enjoy living there?


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## Dunpleecin

No not at all. I was merely addressing the question of who would want to own assets in Spain right now and the point was that if you wanted to buy, you'd get much better value in Spain right now than you would in the UK.


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## gus-lopez

Stravinsky said:


> On my cycle rides I often head off to Pego and Ondara and on the round trip I come down the coast from El Verger. Along that way I pass a number of ghost estates. They were building them when we first came here. Then some stopped, others were completed and just seem to stand empty. In the summer I sometimes stop off for a sit on the beach, and its deserted.


Couldn't agree more. Most places that, even in the good times , were barely lived in out of season are now ghost towns. In january I was in one place down by the sea that used to be reasonably busy & son-in-law commented that the Apocalypse had happened. He was right , there was no one , absolutely not a soul.


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## expatmat

You can have all the benefits of living in Spain without owning assets there. 

Renting is the way to go. I'd advise against anybody buying a property in Spain right now given recent developments.


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## expatmat

gus-lopez said:


> Couldn't agree more. Most places that, even in the good times , were barely lived in out of season are now ghost towns. In january I was in one place down by the sea that used to be reasonably busy & son-in-law commented that the Apocalypse had happened. He was right , there was no one , absolutely not a soul.


Shocking really how much stock is just sitting there going to waste.

I bet that's where those coveted ADSL lines are where I can't get access to them !!! 

I remember seeing similar scenes in SE Asia in the 90s where condos were sat there with wires sticking out of them and monorail tracks just ended in the middle of nowhere. Sure enough they recovered a decade later but I'm not sure we'll see the 5-10% growth rates of these countries in Spain needed to speed a recovery.


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## Pazcat

expatmat said:


> So you have to own a property in Spain to enjoy living there?


Bit of an odd question really and not sure why it should be limited to owning a property in Spain only but then again it is the Spanish forum.
Of course the answer to the question is no, not necessarily but why ask that question, why does anybody bother buying a property anywhere?

There are many reasons why people would prefer to buy if they could and I could go on to list some of reasons why we will eventually buy in Spain.
If you take words like assets and speculators out of the equation then you are on the right track to finding the answer.
Not everyone is out to make a buck and maybe have more personal wants in buying a* family* home, even if they are in the minority.


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## Pesky Wesky

But, if you want to buy a house, Bankia's having a sale!

*Bankia Habitat lanza su primera subasta 'outlet', con más de 500 inmuebles con descuentos hasta el 60%

Bankia launches its first 'outlet' auction with more than 500 properties with discounts of up to 60%

*Yahoo! Noticias España - Los titulares de hoy

You only need to have been living here/ coming on holiday here for a couple of years to know why there were so many empty houses. Everywhere you looked there was a sea of cranes, not only on the coast.

It's explained in this video which did the rounds a while ago


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## expatmat

Pesky Wesky said:


> But, if you want to buy a house, Bankia's having a sale!


Stick around long enough and Bankia's own branches will be on that list


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## mrypg9

I don't 'wonder' why.

But there are two issues here: one, why so many were built and two, why so many are empty.

The first issue relates to the laws of supply and demand. Supply simply outstripped demand. Boom became bust.

The second issue is more complex. Some time ago I posted a photo of a sales board I came across, advertising pisos in a development along the coast not far from here. Original price 135k euros, then 30% reduction, then 55% then 75% ...now it's 'Diganos el precio'.
Now....any enterprising local authority should be considering buying up that quite large development as low-cost rental housing for those on low incomes. When I was Chair of a UK Housing Association we went on a shopping spree and bought up dirt cheap very many repossessed former copuncil properties, bought under the Right to Buy scheme by tenants who defaulted on their mortgages.
Incidentally, doesn't 'dearth' mean shortage?

But you are 100% right about renting. When we left the UK we sold all our properties, business, residential and rental. We rented in Prague, we rent here. 
Moving from Prague to Spain was problem-free...no house to sell.
Same here. First rental, a piso, wasn't for us so we moved..easy-peasy. When we and our dog are too decrepit for this house we now live in we'll move...again easy-peasy.


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## baldilocks

Unless you are only planning on being here temporarily or are speculating, then unlike others, I would recommend buying as soon as you can afford to do so *for cash*. With a cash-bought house, you have no large outgoing (rent/mortgage) per month that you must find, irrespective of what emergency bills arise so you are unlikely to find yourself without a roof over your head.

Personally I wouldn't buy on one of those urbanisations, many are rubbish-built and their community charges are often quite high, especially if half the properties are standing empty. Unoccupied properties deteriorate at an alarming rate so you need to find something that is, or was recently, occupied.

Another reason you will find a number of empty properties has nothing to do with the housing boom/bust, unsatisfactory property or anything like that - it is down to Spanish inheritance laws. The law requires that the property of the deceased (both testate and intestate) is divided according to a certain formula. If the legatees cannot be found or, if present, cannot agree on the sale of the inherited property then it can't be sold and will often be left empty, to rot and fall down (we have one next to us in the next street - each winter, a bit more falls off).

You will also find, in some areas, especially National/Natural Parks empty cortijos. Franco tried (and succeeded in many cases) to get people out of the countryside and into the towns and villages where they were much easier to keep an eye on and less likely to be engaged in rebellious activity (as if they would!). In addition many of those cortijos were in prime hunting country (e.g. The Cazorla Natural Park) and Franco was a hunter. Who wants to hunt on other people's property when they may well shoot you for trespass?


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## mrypg9

baldilocks said:


> Unless you are only planning on being here temporarily or are speculating, then unlike others, I would recommend buying as soon as you can afford to do so *for cash*. With a cash-bought house, you have no large outgoing (rent/mortgage) per month that you must find, irrespective of what emergency bills arise so you are unlikely to find yourself without a roof over your head.
> 
> Personally I wouldn't buy on one of those urbanisations, many are rubbish-built and their community charges are often quite high, especially if half the properties are standing empty. Unoccupied properties deteriorate at an alarming rate so you need to find something that is, or was recently, occupied.
> 
> Another reason you will find a number of empty properties has nothing to do with the housing boom/bust, unsatisfactory property or anything like that - it is down to Spanish inheritance laws. The law requires that the property of the deceased (both testate and intestate) is divided according to a certain formula. If the legatees cannot be found or, if present, cannot agree on the sale of the inherited property then it can't be sold and will often be left empty, to rot and fall down (we have one next to us in the next street - each winter, a bit more falls off).
> 
> You will also find, in some areas, especially National/Natural Parks empty cortijos. Franco tried (and succeeded in many cases) to get people out of the countryside and into the towns and villages where they were much easier to keep an eye on and less likely to be engaged in rebellious activity (as if they would!). In addition many of those cortijos were in prime hunting country (e.g. The Cazorla Natural Park) and Franco was a hunter. Who wants to hunt on other people's property when they may well shoot you for trespass?


Well, we're here for good, Baldy, but we won't be able to stay in this large house when we're even older and even more decrepit and poor old Azor won't need a huge garden and won't be able to get upstairs...
I estimate a good few more years then we're off, probably to Estepona, in a nice adosado in or near the town centre within easy tottering reach of our favourite bars and restaurants. It won't be in an 'urb'. Until then, we're enjoying being where we are.
All we'll have to do is pick up the phone and call Pickfords. No waiting for a buyer...

We've had enough of being property owners and the responsibilities that go with it. 
yes, the money we've spent on rent since we left the UK has been enough to buy a small house here. But in Prague and in Spain we've enjoyed living in properties we could neither afford to buy or would want to buy and we've had no worries about being tied down, repairs, finding we have neighbours we don't like and so on.
As we don't intend to leave any money when we kick the bucket, this lifestyle suits us.
But I accept it may not be right for others.


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## extranjero

There's more to living in Spain than the sun. It also rains here, often with dire results,such as sahara rain, flash floods;it can be very windy; It is extremely cold in winter in uninsulated houses.You only have to look at the new Reporting assets in Spain law. There's healthcare, taxes, nightmare bureaucracy to name but a few


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## pete_l

Pesky Wesky said:


> Bankia launches its first 'outlet' auction with more than 500 properties with discounts of up to 60%


And that just prolongs the problem. 
Why buy a house at a 60% discount, when next year (or next month) there will be more up for grabs at a 65% reduction?

It's basic economics that you don't buy into a falling market, so it will need some imaginative solutions to break out of the spiral of decline. As mentioned though, the problem may be solving itself. If so many of these houses have been uninhabited for years, or never completed, in the first place, then in due course they will be uninhabit*able* and so the number of (liveable) houses will reduce as so many estates just rot away.


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## Nerdycroc

I totally agree with this thread. We are retired and moving to Spain for the very reasons given.
Driving down to our rented villa in Murcia Sunday 14thApril amd start looking for somewhere to live. Bring it on!!


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## expatmat

pete_l said:


> And that just prolongs the problem.
> Why buy a house at a 60% discount, when next year (or next month) there will be more up for grabs at a 65% reduction?
> 
> It's basic economics that you don't buy into a falling market, so it will need some imaginative solutions to break out of the spiral of decline. As mentioned though, the problem may be solving itself. If so many of these houses have been uninhabited for years, or never completed, in the first place, then in due course they will be uninhabit*able* and so the number of (liveable) houses will reduce as so many estates just rot away.


Agree on the creative part. The spanish housing market snake that swallowed the basketball of supply is still to dump its inventory on the market. 

The above news about Bankia auctions should be considered in light of bankia's own position (see news). It's pretty much bankrupt by way of share price and this offloading of inventory is a desperate last throw of the dice to find liquidity before the unthinkable happens (or is that 'thinkable' now the EU has given the green light to the dreaded "bail-in") 

In short, I would only dabble in bankia's fire sale if I wore asbestos pants.


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## Pazcat

I've seen the bankia site and other banks offers and they don't have much in the way of anything I'd consider buying anyway. It's all overpriced and in places I wouldn't want to live to begin with, as it's been said before the only people buying from them are going to be speculators and speculative landlords.


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