A view from the Costas

Thursday, July 11, 2013

A view from the Costas

The dream still exists in Spain! Yet so much bad news has been coming out of the country during the past few years that I sometimes wonder whether I am actually living in the same place.

Worse still, I suspect that if you are thinking of buying a holiday home here, or coming to live here permanently, you may have gained the feeling that the country has become a pariah state.

In fact, of course, life is a good deal more complicated than is shown in much of the news, not least because a great deal of "white noise" is created by vested interests. These include the popular press, which loves shock-horror stories, and those trying to talk up the Spanish property market for their own purposes.

Few people living outside Spain have any idea what is happening to the property market, and what it is really like to live in Spain at the moment.

What is the truth?

Well, little has really changed over here, if you have money. The climate is the same and the overall quality way of life as seductive as ever.

Indeed, as I write this in March, sitting outside with my laptop, in 20C of glorious sunshine, the UK is being blasted by sub-zero winds and snow flurries.

I am just about to go for lunch with some friends (€8 each for three courses and wine), to be followed by a return to working in my garden. Tomorrow (a Saturday), I am due to go rock climbing and then my wife and I are going on a tapas route (€2 for a tapas and glass of wine) in the evening.

Could I do the same in the UK? Hardly. Many retired friends of mine are living the "life of Riley", with the crisis in Spain a relatively abstract concept.

The reality over here is that if you are in financial trouble then, undoubtedly, you will suffer. Equally, if you bought a property between 2005 and 2007, you will have lost a lot of money on your home and it will be hard to sell. In either case, you will feel aggrieved.

Which brings us to what's actually happening in the market. Over the years, some of the statistics that have come from the government in Spain have been misleading and have actually understated the reduction in house prices.

Even here, no one really knows exactly how much Spanish property has fallen in price, but my best guess is that it has dropped careful, you can buy safely, both in terms of price and legality, and pick up property at extraordinarily good value.

Indeed, Spain is now, after a number of years of pricing lunacy, finally providing the value for money for which it was famed, a generation ago. This is not to say that the property market in Spain has stabilised. Few people would claim that, and I believe that, on average, properties in Spain will fall in price by around 5 per cent this year.

However, there has been a surge of foreign property buyers in Spain over the past year, between 45 per cent and 50 per cent since 2007. Prices in many areas are now similar to what they were in around 2002.

Averages, needless to say, are rarely satisfactory, and the Spanish property market has enormous variables. At one extreme, there are properties that are, frankly, worthless, while at the other end there are properties that are well worth buying and which will now, more or less, hold their value and, possibly, increase in price. The latter, invariably, tend to be quality properties, in prime locations, whether apartments or villas.

Certainly, I do not think that buying in Spain is something to avoid. On the contrary, I have no doubt that, if you are very with opportunistic Scandinavian buyers, in particular, hoovering up some of the more tempting bargains.

Indeed, if you are selective, as an incoming expatriate, with a secure income and sufficient cash to buy what you want, you can have a great life here. It may sound cruel, but the truth is that the troubles of other expatriates or Spaniards are largely irrelevant to you, and should not colour your decision as to whether to come here or not. Go on, do it...


A Place In The Sun