Madrid is becoming the focus for an auction on Properties in Spain. Bloomberg news pusblished this story:

April 4 (Bloomberg) — Thanks to Spain’s slumping property market, house buyers are as popular as movie stars — and they can cause even more excitement.

Reporters outnumbered bidders as lot No. 1 hit the slate in Europe’s first “Dutch auction” for real estate last weekend in Madrid. Of 216 lots, 194 were withdrawn when they weren’t purchased at the reserve price. One man, investor Manuel Sainz, bought almost half of everything sold.

“Next stop Hollywood!” laughed Sainz, head of property company Las Terrazas de San Blas SA, as he fought off the press after buying 10 properties at discounts of as much as 30 percent.

The event shows the depth of Spain’s housing bust after prices tripled in the past decade. In January, the government’s housing policy director, Rafael Pacheco, called the slowdown “moderate and orderly” after January sales volume fell 27 percent from a year earlier as the global credit shortage forced banks to reduce lending.

“Official figures are one thing and reality is something else entirely,” said Alberto Espelosin, a strategist at Zaragoza, Spain-based Ibercaja Gestion, which manages $12 billion. “It’s really difficult for people to afford a home with the credit restrictions.”

For Tulipp Showrooms and Auctions SA, set up in September, the Madrid auction was the first in a series of monthly events taking place in Malaga, Barcelona and London over the summer.

Dutch Auction

The Dutch auction, developed in 17th century Amsterdam after the collapse of the tulip bubble and used today to sell fish in Spanish ports, starts with the seller’s asking price and then moves down until the property finds a buyer.

“Six months ago if people made an offer below the list price then developers took offense,” said Tulipp managing director Jorge Zanoletty, whose father established Spain’s first regular property auctions 16 years ago. “Now they are in the mood to be more open.”

Tags: spanish, property

Spain, top of the property hotspot charts ? Well think again, a new Travel and Tourism Competitiveness report outlines which countries are better positioned to attract tourists in 2008, making them not only attractive tourist hotspot but also a good overseas property bet.

We have just seen the release of the Travel and Tourism Competitiveness Report for 2008 which makes particularly interesting reading if you operate in the property investment sector.

While tourism has always been one of the key elements in any healthy property market, it is interesting to see that countries such as Switzerland, Austria and Germany seem to be better placed than most to attract more tourism in 2008.

Tags: spain, property

The ministry of housing in Spain which includes the Andalucia property  market, has stated that houses prices rose by 4.8% in the last quarter of 2007
As a comparison house price inflation was 9.1% in 2006 and 12.8% in 2005
and 17% in 2004
Further bad news is that the NUMBER of houses being sold has also greatly reduced.
Take a look at these figues from the latest leading indicators:

Houses sold in 2007 were 128,200 which is 16% down on 2006
And worse, the SUPPLY of new houses increased by 9.4%
Because of the over supply and lack of sales, over 40% of real estate agencies in the Spain closed down.

The only positive we can see here is that prices must fall and that there are bargains to be had, if you are patient and are prepared to wait. You will do even better if you are prepared to make low offers and walk away if they are not accepted.

Buying cheap property in Spain is different to buying in the UK.
The extra costs involved can suprise you if you don’t know what’s involved in the purchase. Here are the extra costs that you are likely to have to pay:

- IVA (= VAT) for the buyer – 6% on resale properties, 7% on new builds.
- 1 % to 2% for stamp duty
- Registration fee (300 euros )
- Notary fees and legal costs

As a rough guide add 10% to the cost of the property you are buying.

So you have costs of up to 10% of the property value before you have even bought and signed for. If you are planning to invest in property in Spain or find cheap property – then this will be a large sum you have to take into account.

In the early days of the property boom in Spain, Real Estate operators dictated the market prices and commissions and were able to gain from buyers desperate to buy a house in Spain – properties were being snapped up very quickly and builders simply couldn’t keep apace with the demand.
Nowadays things have changed and the market is saturated with many empty resale properties on the market.

So you should expect to see commissions of up to 10 or 15% on new builds with the same for Estate agents dealing in second hand properties.

You want to save money and buy a cheap property in Spain?

Here is what you need to do.
Add the costs and taxes for your property to the commission that the Estate agent asks and you have a large sum.

A valid question for a business person would be :
What if I can cut out the agent?
What you could do is go directly to the owner and deal directly to negotiate the price.