PropertyDispatches askes why prices are not in freefall.
We note the recent article describing the continual supply of new build housing and the poor take up by the market.
So how come prices are not falling?

An interesting question is: Why haven’t prices collapsed in those areas where there is a massive oversupply of property, much of it unattractive and in subprime locations? Prices of similar properties in the US have fallen hard and quickly, but not in Spain.

As one person comments in the forum, “I’ve been looking at buying a property in the Canary’s now for over 12 months now and have not witnessed any crash. Developers still want the original price for properties “no room for negotiation”. Private sellers are refusing to drop the price on properties that have been on the market for some time, and estate agents continue to put properties on the market based on the values apportioned to properties that are not selling.” So if the market is so bad, why aren’t prices tumbling?

These are the reasons that I can come up with:

First of all, foreclosures in Spain take a long time. It appears that many mortgage lenders take a year or more to respond to mortgage delinquencies, after which the repossession process can add on another 6 months or more. This delays the time it takes for repossessions to come on to the market, so a slump in the market does not translate quickly into distressed prices.

Secondly, many investors have just walked away from their deposits (some managing to claw back part of their money), leaving their properties to developers who put them back on the market at list prices. Developers are loath to drop prices, and until now many could afford not to. This may now change, as developers are caught between falling operating cash flows, and rising financial costs, with no access to new borrowing.

Tags: spain, houses, prices

In order to answer some concerns people have about buying property in Spain we set up an intereview with our practising English Spanish lawyer based in Spain, Des Sparkes.

Click here:
Spanish lawyer conversation
Runs for approx 30 minutes

Des answers questions such as:
How can I stop my property being grabbed back by the authorities?
How can I know for sure I am dealing with a fully qualified lawyer?
How do I avoid all the sales pressure and take time to make my decision?
Are there things I should watch out for when I go on an inspection trip?

Des recently took part in a BBC program so we thought you’d like the benefit of
some of his knowledge.
Des is available at www.sparkeslawyers.com

“Another extranjero bites the dust”

What happens when you follow the programs on TV and make the move to relocate to Spain?
This from spanishpropertyinsight.com

  (All names have been changed)

Like many people that move to Spain we had been avid watchers of “A Place in the Sun, “No Turning Back” and similar programmes. We were particularly scathing of those who got into difficulties – how could they be so naïve? Why did they not check this or that? We said to ourselves that we would not fall into such traps little thinking that within 2 years of moving to Spain we would have made many avoidable mistakes. How did this happen? Well the story begins with our initial planning.

When I retired we decided to go for broke and sell up completely in the UK on the basis that if we were going to move to Spain we were going to commit wholly to this course of action. We sold our house near Guildford relatively quickly and also the car. With our furniture in storage and arrangements made to rent a property in Salobrena that we had not even seen we set off from Gatwick with David our 3 year old in tow and the cat Charlie.

The estate agent was waiting as planned at the rendevous in Salobrena and he took us to what would be our new home for the next 8 months right on the sea front and providing an excellent base from which to explore and learn about the local area. We had decided that we wanted a villa with 3 / 4 bedrooms set in approximately 1000 sq m of land and with good access to the local schools and shops. As it transpired this was not as straightforward as we thought it was going to be. We viewed over 50 properties several of which initially seemed to be just what we were looking for but in each case when we investigated further there were drawbacks and snags that put us off. It was at this stage that we decided on a change of strategy and this is were we headed down the path that led to our undoing.

Tags: spain, estate agent

ETA in Spain are still active with the upcoming March genaral election

Authorities in Spain arrest suspected members of the political wing of ETA and ban two other political parties.

MADRID — Amid a bitterly divisive campaign for next month’s national elections, the Spanish government is cracking down on Basque separatists and their potential ballot-box voice with a string of arrests and the banishing of political parties.

The police and judicial actions underscore a sobering backdrop to the March 9 elections: the collapse of a landmark truce with the armed Basque organization ETA that had appeared to have ended the decades-old conflict. There are no negotiations or other prospects for peace on the horizon.

That will exacerbate tensions in the contest for a new parliament and prime minister, elections already threatened by possible violence, according to officials. Three days before the last national elections here, in 2004, Islamic militants killed nearly 200 people in the deadliest terrorist attack in continental Europe in recent years.

Spanish authorities this week arrested 14 people suspected of being members of ETA’s political wing, a banned party called Batasuna.

Acting on a request from the government of Prime Minister Jose Luis Rodriguez Zapatero, a high court judge, Baltasar Garzon, directed a series of nighttime raids rounding up the suspects. On Wednesday, Garzon interrogated the 14, who are suspected of attempting to reconstitute the leadership of Batasuna, which was largely dismantled late last year.

Tags: spain