The new Spain for British Expats?

[Darren]

Just been having a conversation with an estate agent friend of mine in CDS about what the 'new' Spain will be like once the country crawls out of recession.

Will it see a return to the "I've been watching a place in the sun too much" posse who came over with very little research, no jobs or made any attempt to learn the language and then wonder why it all went wrong?

Or are those days well and truly over? Do you think it will revert back to how it was before the "boom years" where it was generally the retired or the semi well informed who moved to Spain to either relax and enjoy the slower pace of life or families who want a new life with work in place already or at least well connected?

My agent friend personally feels that it will never return to the mayhem it has been for the past few years. Where banks would loan money to anyone with a surname and people would take it up not caring much about how they will pay for it.

He also feels that property prices are near the bottom end now in CDS and thinks they will stay that way for a few years and it will never ever go back to the massively inflated Spanish property prices.

For me personally, I'm a cynic I think given a few years of calm, banks and governments will turn a blind eye again. People will once again be able to get a mortgage on the pretence of they can butter a slice of bread and that will produce an income. Property prices will become silly again (IMO they were far more overpriced than the UK) and it will just happen all over again.

I'd would like to know everyone's opinion as surely you all have one, don't be worried about upsetting people as it is your own personal opinion!

[JJH]

I´m not so sure if prices will inflate as much as last time but I agree with you Darren, bankers will still be bankers and they are in it to make money. They´ll probably have very short memories.

[La Gallega]

All right Darren, I've had a glass of wine so here's my tuppence worth

We've never done a direct comparison with property inflation between Spain and the UK. However, if Spain's property inflation has been crazy, then I can only assume it's been crazy from a very low starting point. Why do I say this? Because as far back as I can remember in the UK, and in my relative memory this excludes the late 80s/early 90s crash, people found it hard to earn (let alone save) as much as their houses. Not to put too fine a point on it, it wasn't unusual in my history of bricks and mortar in the UK for properties to double in little over five years. I can personally vouch for 70k turning to nearly 300k in just under 10 years. That's more than 400% and not many people get pay rises of that calibre. Did that happen in Spain???? Perhaps. But lets not forget (and I'm speaking from personal experience having built property here since coming over) that if a property is now worth 250k euros, and it was worth 80k euros a few years back, 80k was a bit of a joke compared to the UK market in any case and from my own experience, the pound still buys more here than in the UK. Please read that last statement as it was meant, and don't do what I've found in other forums where people compare their detached Surrey 4-bedder with their massive villa with pool in 2000m2 of plot and say prices are about the same!!! They should first look for that villa in Surrey and then compare!!

I do think that things will go back to how they were. The late 80s/early 90s in the UK had massive negative equity and repo issues - bigger than now in fact (I have family in real estate businesses over there). People suddenly found their homes worth 55/60% of what they were pre-crash. A few years on, it was back to mega growth. There might be sectors in the Spanish market in particular that won't recover - apartments and flats are one of those, given the ridiculous prices asked per square metre and the supply and demand figures not supporting it. But, the classic Spanish market for tourists which is the property near the coast and in desirable areas will go back and to be honest, I think will outstrip the pre-crash figures. Simply because building regs in Spain are tightening up a lot and that big villa a km or two from the beach will go up and up when the plots around that area are suddenly not buildable anymore.

Phew.

xxx

[Tim]

That was more than tuppence worth !!!

[La Gallega]

Told ya I'd had a glass of wine!!

[Tim]

Told ya I'd had a bottle of wine!!

Just the one?

[La Gallega]

Tis only Tuesday, Tim.