Spanish House prices till falling by up to 14.5pc a year, with the coastal regions popular with British and other international buyers recording some of the biggest falls, according to Sociedad de Tasación, a surveyor.
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| Supply of holiday villas outstrips demand |
British Are Biggest Foreign Buyers of Spanish Properties
The British are the biggest foreign buyers of properties in Spain, owning an estimated 170,000 homes in the country, mostly along the Costas.
At the peak of the frenzied construction boom, Spain was building 700,000 homes and apartments a year – around four times the volume in Britain – but after the developers went bust, many are now in the hands of the country's banks and cajas.
The Story of Bob Puddicombe
Like thousands of other British expatriates, Bob Puddicombe and his wife, Phyllis, found that their retirement dreams of a place in the sun turned into a nightmare following the financial crash.
After 13 years living in the south of Spain, the couple returned home in 2012. Their three-bed villa in Almayate, near Malaga, was initially on the market for €250,000 (£206,000). It eventually sold for just €87,000 (£71,500). They have moved back to the Plymouth area, where they lived before moving to Spain.
Mr Puddicombe, who is nearing 70, said they decided to return to the UK as they were getting older and wanted the security of the NHS. But at the same time the adverse exchange rate has hammered the value of their pension in recent years. "At least we were able to sell, and have used the proceeds to buy an ex-council house back in Britain," he said. But many of the friends the Puddicombes left behind have not been so fortunate.
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Spain in Economic Doldrums
Well, looks like the economic situation in Spain is getting from bad to worse. The Spanish are still stuck in economic doldrums. In 2006/07, unemployment reached a low of 6%. After the financial crisis, things just got worse and worse and now unemployment exceeds 25%.
Experts point out that this unemployment is structural. The Spanish politicians do not have the political will to restructure the economy. At the rate this is going, I'm not sure what will become of Spain.
Dare to Invest in Spain?
Would you dare to invest in Spain? You could get a nice holiday villa for under €100,000! In recent times,
International estate agents are talking up the Spanish property market in holiday hotspots, promising that the collapse in prices is over and that buyers need to act now to bag a bargain.
But figures from Eurostat, the EU's data agency, show that prices continued to fall throughout 2013 across much of Europe, while boom-time developments in Spain, particularly those far from the coast, may never find buyers at any price.
Anyway, if you really want to buy in Spain, be careful about falling into the trap of using pricey English-only property websites. Spain's equivalent of Rightmove, with the widest selection of properties, is called Idealista.com. (which also means you need to know Spanish? Or Google Translate may work)
Singapore's Property Prices Will Always Rise?
Well, the bigger point is this. In Singapore, we tend to assume that property prices can only go one way, i.e. up. Will that always be true? Will our economy always be so strong and rosy? At its peak, the holiday villas in Spain were only going for €250,000. You can't even buy a HDB flat for that price these days.
I don't have a crystal ball but do think about these issues. It may be foolhardy to assume that prices will always go up and up.
Do share your views and thoughts on our community forum here.
References
http://www.telegraph.co.uk/finance/personalfinance/houseprices/10795315/30-second-briefing-UK-house-prices-vs-Spanish-house-prices.html
http://www.telegraph.co.uk/finance/personalfinance/expat-money/10792602/Our-250000-Spanish-villa-sold-for-just-87000.html
http://www.ibtimes.com/its-long-way-recovery-spains-unemployment-rate-remains-26-despite-gdp-growth-predictions-1577504
http://www.theguardian.com/money/2014/apr/26/property-abroad-spain-prices-falls
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