Unless you live in Spain or have a home in Spain, you’re probably like us and you’ve maybe read about the problems in the Spanish property industry and thought ‘oh well, that’s a shame’ and then moved on. However, when you stop and actually think about what the effect the terrible situation of the market is having on those who have invested all their savings and all their hopes and dreams on a new life in Spain, the whole issue takes on a much more dark and gloomy feel.
You only need to hop on to a handful of expat forums and property abroad websites and read the heart wrenching tales of those who are despairing of ever having set foot in Spain to begin to feel the real pain that so many people are going through. But just whose fault is Spain’s dire property market situation? Some smug types blame the Brits who parted with cash for off plan property, others lay the blame at the door of dodgy developers, but what about the planning officials and the banks, they all have had a role to play. And the next important question to ponder is whether there really is any life left in the Spanish property market.
There are those out there who truly believe that the naivety of some and greed of others who thought they could not lose by buying property in a market where over 200% gains had been made in 10 years makes it their own fault that they have lost everything. In the Telegraph recently there’s a tale of a couple who had an achievable, realistic and modest dream. They sold their UK house, bought one for their sons with the profit and invested the rest in a villa in Spain on a golf course. The course has never been finished, their home has never been built. Their dream has gone up in smoke and they are living in a Spain they now hate in a rented apartment with little chance of ever recouping their losses.
In the Guardian there is the tale of a fifty something woman who sold everything in the UK, bought 2 apartments and a villa in Spain and learnt Spanish. She wanted to earn an income in the summer from the apartments and work all year round to give herself an income. She has found no work, her savings have dwindled to nothing, her properties have fallen in value and she has no chance of escape.
These tales are totally typical. There are thousands of people in the same boat especially now that the Spanish builder Martinsa-Fadesa is in administration – joining hundreds of others and also joining half of Spain’s estate agencies which have all closed their doors. So are these people to blame? Yes, some of them are ‘guilty’ of naivety and a few of greed…but the vast majority are not. The vast majority had a dream, were sold their dream and then lost the lot because someone somewhere failed. But who?
The builders who built without planning permission? Maybe, but what about the ones who do get local planning permission from greedy town councils keen to generate some revenue but who fail to get regional permission? Whose fault then? And what about the aforementioned golf course that was never built? There the developer has assets worth millions but is seeking financing for a few million just to get going again. The banks are not interested. These are the banks which were throwing their money at developers and investors and buyers and builders. These are the banks which are guilty of immature and ridiculous lending decisions that have now undermined housing markets across the entire world.
I would say the blame starts right there, right at the top of the ladder…and it slowly works its way right down to those who were ‘foolish’ enough to trust and think that they could actually have their dream life in the sun. Why then is it always the ones at the bottom who suffer most? You can certainly expect to see a few heart attacks, a few suicides, a few nervous breakdowns and quite a lot of personal insolvencies thanks to the dire state of the Spanish property market.
And finally, to answer the question – is there the possibility of there still being any life left in the Spanish property market now? Well, yes…because Spain is still an attractive place to live, it is still a favourite with expats and retirees, and yes because there is still demand for private villa and apartment rental. But really, people need to tread oh so carefully and not invest unless they are certain that every single aspect of the sale is backed by a myriad of watertight guarantees such as the fact tat any deposits that are paid are bank backed. There are many bargains to be bagged in Spain and vendors are increasingly desperate…but this does not mean a buyer should leap in with both feet. Be very, very wary of every aspect of the Spanish property market and do not expect to make a fast buck.