# House prices drop by 12.1% in Spain in Q1 this year



## Filsh (Apr 8, 2013)

Just read an article that states house prices have dropped another 12.1% in Q1 this year. Just wondering what others think on how far prices will drop and when things might stabilise?
Here's the link 
http://news.kyero.com/2013/04/30/house-prices-dropped-12-1-in-q1-says-tinsa/


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## mrypg9 (Apr 26, 2008)

All this speculation about falling house prices is obviously of interest to those hoping for a 'cheap' bargain.
But it seems to be forgotten that this drop in house prices has come about as a result of much human misery. Mortgage debt, repossessions,evictions......all go towards enabling some Northern European to buy a house in Spain they couldn't otherwise afford.

Remember, that 'dream house' in the sun may have once belonged to a Spanish family who are now obliged through no fault of their own to share accommodation with other family members.


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## Filsh (Apr 8, 2013)

mrypg9 said:


> All this speculation about falling house prices is obviously of interest to those hoping for a 'cheap' bargain.
> But it seems to be forgotten that this drop in house prices has come about as a result of much human misery. Mortgage debt, repossessions,evictions......all go towards enabling some Northern European to buy a house in Spain they couldn't otherwise afford.
> 
> Remember, that 'dream house' in the sun may have once belonged to a Spanish family who are now obliged through no fault of their own to share accommodation with other family members.


I agree with you totally. 
But the reason for my post was not to gloat over people's misery of losing a house (I have been in the same situation myself many years ago) but to find out other peoples opinions on the economic crisis. I plan to move to Spain for a better life but I am worried about the knock on effect that the economic crisis will have in Spain e.g. higher crime rates, social unrest etc.. For those reasons it is making me think twice about moving to Spain as I do want to move to country which has some sort of stability in the foreseeable future. Hence my question asking for other peoples opinions of when we will see some sort of stability in the housing market.


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## mrypg9 (Apr 26, 2008)

Filsh said:


> I agree with you totally.
> But the reason for my post was not to gloat over people's misery of losing a house (I have been in the same situation myself many years ago) but to find out other peoples opinions on the economic crisis. I plan to move to Spain for a better life but I am worried about the knock on effect that the economic crisis will have in Spain e.g. higher crime rates, social unrest etc.. For those reasons it is making me think twice about moving to Spain as I do want to move to country which has some sort of stability in the foreseeable future. Hence my question asking for other peoples opinions of when we will see some sort of stability in the housing market.


Here in Malaga Province unemployment is at 40% and rising. For young people it's even worse.

Crime has risen - no surprise with that level of joblessness. I am frankly amazed that there has been so little genuine social unrest but you can only pressure ordinary non-political peopleso far.

Most informed commentators estimate that it could take ten to fifteen yearsbefore Spain is on its feet again.


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## baldilocks (Mar 7, 2010)

The article in question:


> April 30th, 2013
> 
> According to the Spanish Real Estate Market Index (Imie) published by real estate appraisers, Tinsa, house prices reduced by 12.1% in the first quarter of the year, taking them back to the values that were recorded in 2004.
> 
> ...



Note the areas being referred to, most of which are 'oop North' where there are far fewer 'expats' and there was much less speculative building. This is also an article produced by estate agents and "real-estate appraisers" who are notorioius for their exaggerations and inexactitudes.


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## baldilocks (Mar 7, 2010)

From the same organ:



> Andalusia to Take Action Over Empty Homes
> April 25th, 2013
> 
> The Andalusian government approved a decree last week under which, in the most extreme cases, the homes of the most needy families subject to eviction proceedings initiated by banks, will be embargoed by the region for a maximum of three years.
> ...


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## Sirtravelot (Jul 20, 2011)

12%????

That's...a lot.


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## NickZ (Jun 26, 2009)

12% a quarter . Look at the average total drop of over 30%. I bet much higher in the harder hit areas.


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## Sirtravelot (Jul 20, 2011)

Moody's says Spanish house prices will fall for the next 5 years.


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## baldilocks (Mar 7, 2010)

Sirtravelot said:


> Moody's says Spanish house prices will fall for the next 5 years.


and they are one of those 'soothsayers' that help to downgrade various countries' credibility while leaving the real culprit (the USA) untouched


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## 213979 (Apr 11, 2013)

:faint:


Sirtravelot said:


> Moody's says Spanish house prices will fall for the next 5 years.


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## eyepod (Apr 21, 2013)

mrypg9 said:


> All this speculation about falling house prices is obviously of interest to those hoping for a 'cheap' bargain.
> But it seems to be forgotten that this drop in house prices has come about as a result of much human misery. Mortgage debt, repossessions,evictions......all go towards enabling some Northern European to buy a house in Spain they couldn't otherwise afford.
> 
> Remember, that 'dream house' in the sun may have once belonged to a Spanish family who are now obliged through no fault of their own to share accommodation with other family members.


Well, the solution is obvious. Everyone knows that rich Russian oligarchs have purchased houses in Spain with laundered money. Therefore, Brussels needs to confiscate 40% of value of all real estate over 100K euros. Of course, Germans will be exempt as they have already made a 40+ billion euro 'investment' in Spanish banking via the ESM.

"Because of bad bungling by Brussels, before betting on Iberian banking, better beware" 'Plan B'


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## Tilley (Jun 10, 2012)

It's always been impossible to work out when the bottom of a market is for some reason and buy accordingly though, I think that folk who manage to buy at the bottom just do so by fluke.

Probably better to look on a house as a home rather than an investment, the later can lead to lots of grief and heartbreak. Just go for something you love in an area you know well if you are going to shell out.


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## Dunpleecin (Dec 20, 2012)

Tilley said:


> It's always been impossible to work out when the bottom of a market is for some reason and buy accordingly though, I think that folk who manage to buy at the bottom just do so by fluke.
> 
> Probably better to look on a house as a home rather than an investment, the later can lead to lots of grief and heartbreak. Just go for something you love in an area you know well if you are going to shell out.


Sound advice, although I fear that the "I must rent" brigade will take exception citing all kinds of economic reasons why you must have the brains of a donkey to buy somewhere!

Spending around €5000 in rent per year for 5 years whilst waiting for prices to hit rock bottom means the house you're looking at has to drop by 25000 in the 5 years before you buy it and even then you'll only just break even with no profit. So if you're going to lose 25k why not take the above advice and have somewhere of your own straightaway and who knows, it might not go down that much! In which case, you're better off.


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## GUAPACHICA (Jun 30, 2012)

Tilley said:


> It's always been impossible to work out when the bottom of a market is for some reason and buy accordingly though, I think that folk who manage to buy at the bottom just do so by fluke.
> 
> Probably better to look on a house as a home rather than an investment, the later can lead to lots of grief and heartbreak. Just go for something you love in an area you know well if you are going to shell out.


Hi - I know this is an Expat Forum and that the availability of thousands of cheap houses and apartments for sale is a great opportunity to purchase the _'Spanish dream_!' 

However, it is very hard, when Spanish friends, their families and neighbours are facing such extreme financial hardship, to read positively worded posts about a potential further drop in property values and the opportunity for expats to buy at a 'fluke' price 'at the bottom of the market!' It's as though, for ourselves, Spanish misery and despair were now invisible - certainly not a salient factor, worthy of consideration.

Yet, we talk a lot, here, about the generosity and hospitality of Spanish people, in general and how welcoming they've been to many of us, upon relocation to their country. We also recommend '_integration_' as far as possible, to _'newbies'_ hoping to settle here. 

Maybe, we ought to remember, then, that the wonderfully cheap Spanish property is not located in a vacuum - but in a country inhabited by other human beings, many of whom are desperately afraid they'll be evicted from their homes - as were 350,000 others, during the past four years - or, perhaps, have to face negative equity and/or unemployment, with no chance of selling up to escape the subsequent debt trap! 

Tragically, there have also been several suicides linked to the receipt of eviction notices! 

Obviously, expats will take advantage of current opportunities to purchase cheap Spanish properties - we live in a 'Capitalist' market-driven economy, don't we..?
I'm merely advocating we should, perhaps, display some sensitivity and compassion towards our Spanish hosts, when speaking or writing of the benefits to be gained by the fortunate foreign purchasers! Anyway, for anyone who's interested, here'a a Spanish News site's report on the '*eviction'* issue:

PressTV - Evictions become nightmare for Spanish citizens

Saludos,
GC


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## baldilocks (Mar 7, 2010)

GUAPACHICA said:


> Hi - I know this is an Expat Forum and that the availability of thousands of cheap houses and apartments for sale is a great opportunity to purchase the _'Spanish dream_!'
> 
> However, it is very hard, when Spanish friends, their families and neighbours are facing such extreme financial hardship, to read positively worded posts about a potential further drop in property values and the opportunity for expats to buy at a 'fluke' price 'at the bottom of the market!' It's as though, for ourselves, Spanish misery and despair were now invisible - certainly not a salient factor, worthy of consideration.
> 
> ...


It only matters whether you buy at the bottom of the market or not if you are an "expat" and not an "immigrant" The latter are coming here with the intent of staying so it doesn't really matter whether they could have saved a couple of thousand Euros since they aren't interested in selling, at least in the short term. The expats, on the other hand, tend to have, by definition, less of a sense of permanence and are more interested in making a "quick buck".

Of course, the other side of the coin is: 
If you buy cheap, 
then sell dear, 
that's more CGT to pay, 
I fear.​


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## mrypg9 (Apr 26, 2008)

eyepod said:


> Well, the solution is obvious. Everyone knows that rich Russian oligarchs have purchased houses in Spain with laundered money. Therefore, Brussels needs to confiscate 40% of value of all real estate over 100K euros. Of course, Germans will be exempt as they have already made a 40+ billion euro 'investment' in Spanish banking via the ESM.
> 
> "Because of bad bungling by Brussels, before betting on Iberian banking, better beware" 'Plan B'


So my son and dil who bought their house cash fifteen years ago with hard-earned income from responsible UK jobs should pay 40% penalty because a comparative handful of crooks made money out of property???? And everyone else who retired to Spain and bought property with the proceeds of a lifetime's honest work?? The vast majority of immigrant-owned property is owned by people of comparatively modest means, many of whom are over-exposed and struggling to survive.
100k euros is nothing, not in Spain or anywhere in Europe where property is concerned. Real wealth starts well beyond that level.

The phrase 'everyone knows' really means that the user is expressing his/her subjective opinion which may or may not have basis in fact.

I'm guessing your post is tongue-in-cheek.


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## maxd (Mar 22, 2009)

Dunpleecin said:


> Sound advice, although I fear that the "I must rent" brigade will take exception citing all kinds of economic reasons why you must have the brains of a donkey to buy somewhere!
> 
> Spending around €5000 in rent per year for 5 years whilst waiting for prices to hit rock bottom means the house you're looking at has to drop by 25000 in the 5 years before you buy it and even then you'll only just break even with no profit. So if you're going to lose 25k why not take the above advice and have somewhere of your own straightaway and who knows, it might not go down that much! In which case, you're better off.


I have a primary property outside Spain and do not pay rent. Say I am looking for a holiday villa @ 400K now a 10% fall in a year is already 40K saved. So I guess what you say is true only if you live in Spain.

If you are a speculator you should really start buying in a rising market,, i.e look at the long term downtrend stopping and starting to go up again. Definitely not there yet.

I guess it is truly tragic for many Spanish people, not to mention foreigners who bought at the wrong time. I personally saw it coming back in 2005 when people that rent to our business were actually subsidising their mortgages and renting out to us at a net loss on the hope of capital appreciation. In all honesty that is bonkers, if there is no business case.

On the other side we signed rents right at the top when the market was on fire because there was nothing else available and we had a painful 3 years of not being stuck in some units that made us nothing.

You can blame the government for pimping property but you also need to take some personal responsibility for signing on the dotted line.


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## puertouk (Aug 22, 2010)

mrypg9 said:


> All this speculation about falling house prices is obviously of interest to those hoping for a 'cheap' bargain.
> But it seems to be forgotten that this drop in house prices has come about as a result of much human misery. Mortgage debt, repossessions,evictions......all go towards enabling some Northern European to buy a house in Spain they couldn't otherwise afford.
> 
> Remember, that 'dream house' in the sun may have once belonged to a Spanish family who are now obliged through no fault of their own to share accommodation with other family members.


And what about all the Brits who have lost their homes, in both the UK and Spain!!!


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## doro (Aug 1, 2010)

maxd said:


> If you are a speculator you should really start buying in a rising market,, i.e look at the long term downtrend stopping and starting to go up again. Definitely not there yet.


Nobody can speculate anything right now in south Spain, as there are more that 500k empty houses and there is no sign of economical progress.

Frankly.. Spain absorbed a chunk of expats.. maybe is near the limit? There are also some other nice country's under "the sun" for expats, with nice living conditions.

And yes, indeed, the prices are going down more.

The situation from 2005 will never come back. Not now.. not in next 10 years I think. Not even in Spain, is a global problem.


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## mrypg9 (Apr 26, 2008)

puertouk said:


> And what about all the Brits who have lost their homes, in both the UK and Spain!!!


We are talking here about property in Spain.
Let's not forget that many Brits and others overextended themselves. As someone -maxd - pointed out, personal responsibility comes into this.

I and thousands of others are getting piddling interest on our investments accrued after a lifetimes' work in order to subsidise the imprudent who went chasing their 'Spanish dream'.

It cuts both ways.


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## eyepod (Apr 21, 2013)

My comment was a lampoon of Brussels, I couldn't agree with you more. The sad truth is that Brussels did rob people in Cyprus, there was a lack of due process, just a bunch of vague media speculation that they were getting Russian dirty money, no proof or court process. At the time there were at least some high ranking EU individuals saying this was the new model, I heard them with my own ears on TVe. Pretty scary considering Spain might need to access the ESM again.


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## doro (Aug 1, 2010)

And why do you think Brussels did know the Cyprus situation before gone public? Brussels do not control banks, is not like IRS in USA.


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## eyepod (Apr 21, 2013)

doro said:


> And why do you think Brussels did know the Cyprus situation before gone public? Brussels do not control banks, is not like IRS in USA.


I didn't say Brussels knew or didn't know anything. I said Brussels robbed people. Taking 40% of peoples bank accounts over 100K euros without due process or warning and severely restricting withdrawals, what would you call that?


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## baldilocks (Mar 7, 2010)

mrypg9 said:


> The phrase 'everyone knows' really means that the user is expressing his/her subjective opinion which may or may not have basis in fact.


So was the late MT's "and YOU know..."


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## Filsh (Apr 8, 2013)

eyepod said:


> I didn't say Brussels knew or didn't know anything. I said Brussels robbed people. Taking 40% of peoples bank accounts over 100K euros without due process or warning and severely restricting withdrawals, what would you call that?


They didn't even have the decency to wear a mask when they robbed them!


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## baldilocks (Mar 7, 2010)

eyepod said:


> I didn't say Brussels knew or didn't know anything. I said Brussels robbed people. Taking 40% of peoples bank accounts over 100K euros without due process or warning and severely restricting withdrawals, what would you call that?


Where on earth did you get that fanciful idea that Brussels (by which we presume you mean the EU) robbed people in Cyprus?


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## eyepod (Apr 21, 2013)

baldilocks said:


> Where on earth did you get that fanciful idea that Brussels (by which we presume you mean the EU) robbed people in Cyprus?


I will repeat my question to you, would you call that robbery or what word would you use? Or perhaps you are only questioning who was responsible? Certainly the government of Cyprus voted to committ this act, but do you really think the EU was not responsible?

But you bring up a good philosophical question - In the midst of a sever debt crisis, who really is to blame.


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## mrypg9 (Apr 26, 2008)

eyepod said:


> I will repeat my question to you, would you call that robbery or what word would you use? Or perhaps you are only questioning who was responsible? Certainly the government of Cyprus voted to committ this act, but do you really think the EU was not responsible?
> 
> But you bring up a good philosophical question - In the midst of a sever debt crisis, who really is to blame.


Because it was a general levy and not restricted to speculators who took a gamble on high-yield high-risk investments,I'd say yes, it was robbery.

Your last point: no 'philosophy' involved, really. It's simple: some people were imprudent and took advantage of cheap and easy credit to buy their 'dream' home in Spain or wherever. Some were financially illiterate, others took a calculated risk...and lost.
Some people who thought they had steady well-paid jobs found out they were no longer safe or well-paid, became unemployed and homeless through sheer bad luck, no fault on their part.
It's wrong to generalise.
But there was a time in the UK when cheap credit was shoved in people's faces. About ten years ago in the UK I had several credit cards and when I totalled up the credit available on each it amounted to almost £100k!!!!! Then you used to get books of cheques made out in your name which you could cash...Each one for £1000. No wonder some people couldn't resist temptation.

We live in a society where instant gratification is the norm. Does anyone remember the 1970s Barclaycard ad strapline: 'Take the waiting out of wanting'?
But I was brought up to avoid debt. It was seen as 'sinful', a weakness. We bought what we had the money for. No HP. No loans. So we didn't have many inessentials. I learnt to save and wait for things I wanted. I bought the house we lived in with cash and still pay my credit cards in full each month. It's a habit.


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## eyepod (Apr 21, 2013)

mrypg9 said:


> Because it was a general levy and not restricted to speculators who took a gamble on high-yield high-risk investments,I'd say yes, it was robbery.
> 
> Your last point: no 'philosophy' involved, really. It's simple: some people were imprudent and took advantage of cheap and easy credit to buy their 'dream' home in Spain or wherever. Some were financially illiterate, others took a calculated risk...and lost.
> Some people who thought they had steady well-paid jobs found out they were no longer safe or well-paid, became unemployed and homeless through sheer bad luck, no fault on their part.
> ...


I had to rub my eyes - I thought you were describing my country!


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## Lonely (Aug 11, 2012)

mrypg9 said:


> All this speculation about falling house prices is obviously of interest to those hoping for a 'cheap' bargain.
> But it seems to be forgotten that this drop in house prices has come about as a result of much human misery. Mortgage debt, repossessions,evictions......all go towards enabling some Northern European to buy a house in Spain they couldn't otherwise afford.
> 
> Remember, that 'dream house' in the sun may have once belonged to a Spanish family who are now obliged through no fault of their own to share accommodation with other family members.


How strange...no one complained when they went up by 300% in a decade.


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## doro (Aug 1, 2010)

Lonely said:


> How strange...no one complained when they went up by 300% in a decade.


The wheel is rolling. A good question is when the prices for houses will stop to drop


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## mrypg9 (Apr 26, 2008)

Lonely said:


> How strange...no one complained when they went up by 300% in a decade.


Well, did you expect them to?

It's always the same: profits, when they accrue, are seen as untouchable. Yet when losses are involved, everyone expects the state to bail them out in some way or other. Some people seem to lack a basic understanding of how capitalism works.

Anyone with the most basic knowledge of economic history would have realised that boom follows bust and that such an inflated level of profitability would and could not last.

Perhaps we will now learn to abandon our obsession with regarding bricks and mortar as a speculative investment tool. Sympathy should go to those who merely saw a house or flat as a roof over the family head and not a means of generating unearned income.


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## puertouk (Aug 22, 2010)

mrypg9 said:


> Well, did you expect them to?
> 
> It's always the same: profits, when they accrue, are seen as untouchable. Yet when losses are involved, everyone expects the state to bail them out in some way or other. Some people seem to lack a basic understanding of how capitalism works.
> 
> ...


People also forget how much money people staying in apartments and villas spend while on holiday, thus generating money into the economy. Bars, restaurants, car hire, petrol/diesel sales, trips and places of interest. Plus many more businesses including suppliers to the bars and restaurants and all the staff at these businesses.


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## mrypg9 (Apr 26, 2008)

puertouk said:


> People also forget how much money people staying in apartments and villas spend while on holiday, thus generating money into the economy. Bars, restaurants, car hire, petrol/diesel sales, trips and places of interest. Plus many more businesses including suppliers to the bars and restaurants and all the staff at these businesses.


Depends entirely where the cash goes. Some goes outside Spain.

Most people who come to Spain aren't big spenders. But the Russian market is on the up and Russians who holiday here seem to spend more than the average Brit.
Spain could profit from a more upmarket image.


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## Tilley (Jun 10, 2012)

mrypg9 said:


> Depends entirely where the cash goes. Some goes outside Spain.
> 
> Most people who come to Spain aren't big spenders. But the Russian market is on the up and Russians who holiday here seem to spend more than the average Brit.
> Spain could profit from a more upmarket image.


LOL so funny, you have obviously never holidayed with Russians, nor would I think from what you write enjoy to do so. 

In Cyprus and Egypt for example they went into their 5 star AI hotels and never came out again for the whole fortnight except maybe to find the beach, or make the odd trip to Lidl (in Cyprus) if they couldnt sneak out enough food from the buffets to take to the beach for a picnic. Contribution to local economies ziltch, even less than the Brits that you denigrate so willingly.

Sorry sneak isnt the right word, they were blatant.  But the Cypriot and Egyptian staff are to scared to tackle them about the 'dont take food from the dining room rules' incase they lose their teeth.


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