There Are 5 Responses So Far. »

1. 

   Comment by Mark Harrison on 31 January 2008:

   There’s little doubt that Spanish property was massively overpriced compared to historical norms, but the fall was happening BEFORE the credit crunch spillover.

   Since the end of the Second World War, average property prices in Eurpope have cycled between about 3x and 5x average incomes.

   Current UK prices – 7x average incomes
   Current Spanish prices – 14x average incomes

   Our take is that it was purchasers from elsewhere in Europe, particularly the Boomer generation in UK and Germany, that had driven up prices, buying second homes in Spain as retirement properties. (Think of the South Coast of Spain as Europe’s Florida.)

   We see a couple of key issues caught Spanish market hard over the last 12 months:

   1: Germany signed a “tax information treaty” with Spain. That means that the German Government now get information about German owners of property in Spain direct from the Spanish Government – and Germany taxes that kind of thing

   2: The accession of other countries, particularly Cyprus to the EU, has meant that there is a lot more competition for retirement homes PLUS Cyprus has a property law system modeled on the British one, so works the way UK buyers would expect.

   Example difference: In the UK, like the US, when you die, you choose who you leave your house to. In Spain, you have no such choice. Spanish Law mandates the split between your surviving spouse and your children. The UK boomers are beginning to realise this, and thinking that maybe Spain isn’t so great a place for Intergenerational Wealth Transfer.
2. 

   Comment by West End Estate Agents on 21 February 2008:

   It’s not easy
3. 

   Comment by Emma Haller on 2 July 2008:

   The Spanish government are not making any incentives for people to buy properties.
   Currently no one could afford the incredible fees involved in both buying and selling.
   greed is a huge factor in the spanish property market.
   Think like a citizen and not about profit and you will find that there is a happy compromise that can be made.
4. 

   Comment by Sebastiaan Kemna on 4 September 2008:

   We are lucky in Mallorca (Majorca) insofar as we are not effected by trends on the Mainland. So far, prices are maintaining there levels although we are seeing some flexibility in the resale market. Most of those however are due to a low GBP rate which allows the British seller to drop their price without effecting their GBP return.

   Neither have we had the over-development in Mallorca as can be seen on the peninsula which further insulates from the downturn. That said, in the foreign media there is often no distintion made between Spain and Mallorca and believe me, they are different. All in all, it is harder to close deals but at least there is still a market.

   Agree with the above comment … stop thinking as and investor and think of the fact that you will own a beautiful holiday home on a paradise island!
5. 

   Comment by barcelona apartments on 8 December 2008:

   I own a real estate agency in Spain and I would not, sadly advise anyone to buy a property. Wait until may, at least.

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