Skip to content

Talk of recovery in Spain turns out to be wishful thinking

Such is the state of the Spanish property market at present. An example is a thread on the propertycommunity.com forum which starts off on an optimistic footing. Enquiry levels are up fourfold in the last two months, potential buyers are booking last minute flights to view well priced property and sales are increasing.

Wow, but don't get too excited. As Property Wire's news section points out today lending in Spain is on a downward spiral and there over a million new properties, most of them on the Costas, that remain unsold and that is likely to increase to 1.2 million unless there is a sudden recovery.

Reaction on the thread backs this up. The only people selling are desperate; many of them UK pensioners who can no longer afford to live in Spain as exchange rates have eaten away their income.

{jumi [adcode/adsense-468×60.txt]}

Over on the eyeonspain.com forum the best advice is not to sell unless you have to and few in Spain expect any recovery in 2009. One interesting prediction is that in the future as the property market does recover then more people will buy via the internet. Poster Brian Rowlands, a chartered surveyor, suggests it could go the way that airline flights have gone with internet selling moving to the fore.

But perhaps one thing that is hinted at is particularly apt – Spain may be popular and have lots of bargains at present but without finance few can afford to buy at present. It still also has major illegal building and land grab issues.

There is also an indication of the impact of the property crisis on life in Spain. The sun might be shining but people are struggling on lower incomes and losing their jobs. Although generally there is not a lot of sympathy for real estate agents they too are ordinary people and their business contributes to the local community in a financial way.

An example is given on the forum – One property company had 80 reps, a fleet of 60 cars, 100 backroom staff, an admin office, telesales office, Almeria offices and a swanky marina side designer head office. They now operate with a skeleton staff and those that have been laid off are not being paid. That's a lot of people affected and it is just one business.

There is still a lot of discussion around about property sale contracts in Dubai with the Real Estate Regulatory Authority dealing with more disputes and a new standard contract about to be introduced. But the issue affects anyone buying a property anywhere in the world and it comes down to the basics of reading the small print.

Too often, especially for lifestyle property buyers, the rose tinted spectacles take over and the excitement for buying a dream home can cloud the neccessity to know what you are signing. The issue is put very clearly this week on the calabriahomes.com forum and poster trigger points out that a contract is something that should be mutually agreed upon.

You have the right to accept or decline and you also have the right to add or take away certain parts of that contract. It should be a negotiation process, not an obligatory requirement of the purchaser.

It is also important to get the contract translated into your own language. Posters on this thread point out that this can be expensive, especially if you are giving a lawyer power of attorney to compete the sale on your behalf. But the key question is missing – how much is a mistake worth? A mistake can be rectified easily before the contract is signed but not so easily weeks or even years later.

Once the dream property has been built another issue that can be affected by the rose tinted spectacle syndrome is wills and inheritance. There is plenty of information on the inheritance laws in France and what they mean for property owners but less so for other countries which makes a post on themovechannel.com forum on the situation in Italy particularly helpful.

For example, the cost of translating all the relevant foreign documents into Italian after the death of a foreign owner of an Italian property can often be greater than the cost of making an Italian will.

Related