Is the bottom of the housing pyramid stable? Here it might well be.

So how far will prices fall in the housing market? Estimates of the UK market this year vary but about 15% would seem to be the average. However where is the bottoming out point of house prices in the UK and elsewhere? As prices fall the possibility for first time buyers to get into owning a property grows and surely this means that at some point the demand outstrips supply and prices bottom out and maybe even start rising again. The issue at the moment would sem to be lack of lending by the banks and building societies rather than lack of real demand, nobody can get a mortgage.

Anyway in Spain and, more particularly for me and this blog Valencia, the government is going to force lenders to do just that, lend, very soon. So it is possible to look at a potential bottoming out of the market in the following way. The average Spanish person earns around 1500 Euros per month and when both partners in a couple earn that, then they have 3000 Euros income with which to play with at the bank. The banks will use around 1000 Euros per month as a rule of thumb for repayments. At an interest rate of 4% which will be in place by about March time this would mean repayments on a loan of some 200k would come in at around 958 Euros pcm over 30 years on a repayment mortgage. Therefore we can surmise that any property under 200k has the potential to be bought by these new first time buyers and properties around the 100k mark can be bought by those average wage single people who are looking to buy. So has Spain reached the bottom? Well there are a few other factors to consider but bear in mind that the cheaper areas of Valencia are now seeing properties in the 100k mark and other provincial capitals the same and there is a good possibility that it may have in the cities where demand is still good. However the negatives that need to be sorted are as follows;
1) The banks will only give up to 80% of price.Therefore people need to have saved 20% plus costs of purchase or have, more usually, a family member who can supply them with it.
2) You need to jump through a lot of hoops to get funding at the moment.
3) Interest rates at 4% may well drop in the short term but be aware that if they went up to 6% where they were a few months back then repayments would be 230 Euros pcm more (More or less)
4) Oversupply of rubbish on the coasts.

The good news is that buying BMV property in Spain now and renting it out will give a really good return if you can get the mortgage as an interest only loan on a property at 100k will cost about 350 Euros pcm and return some 550-600 Euros in rental. (Remember I am talking about cities not the coast)

For any advice regarding your mortgage or investing in Spain then get in touch with me. We may be able to get you a much better deal than you would otherwise be offered. And remember also that the lifestyle here and the cost of living is certainly cheaper than the UK or many other areas despite the drop in value of the pound.

Waiting for the right exchange rate

So many people getting in touch at the moment wanting to rent with an option to buy. Why? Well as mentioned in my last blog entry about the imperfect storm enveloping the market why buy if you are coming here from the UK when you can wait and maybe the pound will recover some of the lost ground and get back toards where it was earlier in the year, around 1.27 Euros to 1.30 Euros to the Pound? Now there is no guarantee it will although many "experts" feel that is where the sensible point is. However, the likelihood is that as soon as parity with the Euro is reached then hedge funds and speculators will stop betting against the pound as they have been doing and shift the momentum in the opposite direction.

Therefore we are getting more possiblities for renting into the site and some of the for sale houses are also available for rent. Get in touch and ask for more info on info@valencia-property.com if you are unsure. Six month option contracts are becoming more and more prevalent. Make sure your contract protects your rights and gives you the right to buy without being gazumped when the right time to buy turns up.

The Imperfect Storm

The market is a tad moribund at the moment. An imperfect storm is brewing. The reasons are as follows

1) Sterling has dropped from 1.47 to 1.06 Euros in just over a year.
2) Interest rates hit a peak of just over 5.7% in August meaning the revisions of peoples' mortgages were fixed for a year at 6.7%
3) Point 2 doesn't matter as banks are still not lending
4) Prices are falling so people generally will wait.
5) The UK market is moribund so people who want to buy cannot sell their place.
6) People believe fallacies like those reported by Trevor MacDonald and the Daily Mail.
7) Recession means that jobs are being shed just like the UK.

So in order to give you a reason to buy here we need to point out the lifestyle advantages, the excellent possibilities for starting up solid businesses, the cost of living which is still much lower than in the UK, the social factors affecting your life here, the availability of rentals with an option to purchase further down the line, possibly when sterling rebounds, and finally the fact that our prices are already dropped markedly, especially those being sold by English speaking clients because if they are selling to repatriate the money back to the UK they have dropped the price a lot so that for you in pounds it costs no more. Ask me for more info.

Last real week of work

I am currently laid up a bit, relying on public transport to get me round with the broken collarbone, and yes I know I am too old to be playing football especially for everyone who has told me, but I will be back. Anyway, I have just had a realization. This is the last week before Xmas in effect because schools finish on Friday and from then everything slows down in Spain until after Kings' Day on the 6th of January. So if you need anything doing here make sure it is arranged this week because otherwise it might be a long time before it gets done. Meanwhile Skype me on grahamvp or ring me on +34 961662892 if you want anything because I will definitely be out and about this week trying to get my stuff out of the way.

200th Post so More Good News

Thanks to my friend Robert Burns for the info. If you have a pension you want transferred outside of the UK he can help you.

Despite all the bad news we are still seeing investment and infrastructure projects into the Valencia Region. Recent announcements include:

# The Alicante Trade Fair (IFA) is to invest 360m euros including a new multi purpose sports and events pavilion.

# The opening of a "Short Sea" connection between Valencia and Sardinia. Expected 25 percent increase in traffic between Spain and Italy.

# Hits Mobile jointly owned by a Kuwaiti Group and Metrored from Valencia are setting up a base in Valencia to target international mobile calls.
And if you want a Hits phone to get cheap phone calls to the UK and elsewhere then sign up with me here and I will get back to you

# Molino Real are to donate 15m euros for the rehabilitation of the Paterna area of Valencia.


And finally, to quote the Chamber of Commerce, the Air Cargo Center in Manises Airport "is a strategic area for multimodal transport since Valencia is situated in a privileged location in the Mediterranean Rim."

It's the place to be...the Generalitat de Valencia.

Oh and Valencia are in the Champions League places and the new stadium is moving along nicely now.

Do you want to reduce your mortgage payments?

If you are following the updates here and on our other sites you may already know that we have been negotiating for clients who want to reduce their mortgage payments with their banks. This is being very successful and we have currently reduced mortgage repayments for people between 500 and 1400 Euros per month for times ranging from 2-3 years. If you want us to get you a better deal on your mortgage in Spain then for a fixed fee we can get you a much better deal and take that pressure off you.

More Rain in Spain. Bumper harvest to follow

And it just keeps on coming. Expect a bumper harvest of olives, oranges and all of the other stuff you get from Spain because the last month or so has been virtually every day and apparently in the vast majority of places the "good" rain that comes down not in a torrential torrent but at a more leisurely pace making sure that it soaks in rather than running off.
Christmas mandarins should be really juicy this year.

In Valencia we are consdiered to have had a real Gota Fria this year, this is a type of monsoon that engulfs this specific area of the Med around October time. Anyway if you want to know what it can look like check out these images from the Riada of 1957 in Valencia. (Turn the music off though)

How to Make Great Paella - The Ingredients Count

So if you didn't read the Times online last week you can find the answer and some of the names of the best restaurants in this article here. remember that the piccie illustrating this article is not the traditional stuff you get served around here. Just a clue. When you see the old biddies walking round a field with a plastic bag or at the side of a road, they are not picking up fag ends, they are getting the snails for the paella.

Personally I would go for Raco de La Olla in El Palmar as the best paella restaurant in El Palmar but opinions are valid of course.

Is it me or is it getting busy here?

The last week has seen a rush of enquiries and interest in many properties from both a rental and a purchase viewpoint. Why is this? I have a few theories but my favourite might just well be the following. Are people in the UK now so sick and tired of hearing about the impending doom and gloom and how everything is going to be horrible for a couple of years that maybe they just want to step off the treadmill and experience something different for a while?

Spain will undergo a transition too of course, it is inately tied up in the World economy just like everywhere else but despite the last three weeks of rain, and today it is even drizzling which never happens here, the country, the people and the atmosphere always seem less oppressively depressing. Any ideas why? Are we all ostriches waiting for the nuclear winter of recession to freeze our upturned backsides?

Lovely House. Villamarchante 399000 Euros

So if you want a great place to live, totally modernised yet having tha loving touch and oozing rusticity about a fifteen minute walk from the village with lovely views over the Turia River Valley and just twenty five minutes from Valencia or the airport then maybe you should be looking at this property. 399000 Euros will get you this and it has everything you could possibly want including an excellently stocked Bodega currently but you would have to pay extra for the wine if available.

Check out the video below and make your appointment to come and see this excellently put together property.

Banco de Santander Success Story

Banco de Santander has developed from a small regional bank to become one of the major players in European banking and the biggest bank in Spain over the last few years. It has now decided that it wants to dominate the European scene, starting with the UK, as it does the Spanish banking scene. In Spain where Santander goes the other banks soon follow and it seems that they have started to open the tap to new mortgages, a tap that has been closed now for almost a year. Expect other Spanish banks to follow.


Banco De Santander HQ in Sao Paulo

So what made the Santander strong in the current market? Spanish banks never bought into toxic debt to the same extent as other European banks as they were too busy being parochial in Spain by funding developers here, hence the huge construction boom of recent times, and also they looked to Argentina and other Spanish speaking South American countries as well as Portuguese speaking Brazil to develop their brands in new markets. So busy were they that when all of the newly repackaged toxic debt from the States was offered they didn't even bother looking at it. So now they are cash rich and picking up good deals like Abbey, Alliance and Leicester and Bradford and Bingley in a sort of Buffett way, buying in at the best time.

So why is the Spanish housing market dropping so much, just like the UK market? The major reason that transactions in Spain are down 26% this year is the lack of availability of credit. The 33% drop in mortgages given out is one of the proofs of that. People still want to buy but cannot because of the restrictions on lending and therefore the market in dropping in price bringing in even more people who want to buy. Obviously there is an oversupply of two bed two bathroom flats in coastal areas but the latent demand for the larger conurbations (Madrid, Barcelona, Valencia, Seville, Bilbao) is still there as the population grows year on year and rural depopulation increases as people look for opportunities in the cities. If the Santander open the taps again expect the Spanish market in the major towns and cities to perk up, especially if, and that is a big if currently, it coincides with a drop in interest rates from the European Central Bank.

So what will be the next target for Santander in the UK and when will the Competition Commission start looking into their adquisitions?

Leave the key under the rug and put the cat out.

I have read so many negative blogs about the situation in the UK today due to banking failures in the States and the stock market plummeting that it surprises me that there is anyone left in the country. Why don't you just leave and join the exodus? So anyway, if anyone wants to come and join us here in Valencia please make sure to bring a few things.

1) The intention to learn the language
2) A positive can do attitude
3) Respect for the culture of the country even if that means putting up with goats been thrown from towers etc...
4) Money. Two years of it minimum so that you have time to learn the language and set up a business you can be proud of.
5) An intention to add something to where you are. Remember givers gain.

We will be delighted to help you.

Referring back to my blog last week on Ecademy and to my podcast from the weekend which you can listen to below have a look at the positivity pouring out of the first and the news from Valencia and Spain too. It is not all doom and gloom. If you still decide you want to go then get in touch, ask me about anything regarding living in Spain or particularly Valencia and start planning your future. Remember you do have a choice. Sit back and let the media batter you into following the crowd into a recession or get off your touche and do something to make your life better.

(The photo refers to a house newly reduced to 345000 Euros to live the good life in Turis. Stunning place reeduced because the owners have moved back to Buenos Aires and need some cash. See it here)

A Question Well Answered

I put a question up on Linkedin, if you don't know it it is a sort of grown up Facebook! Here it is;

What is the single most important thing that an estate agent can do to attract you to purchase a property?

Anyway I had some great answers but one stood out because it meant research not just a gut feeling. It came from Colin Gorvett and this was the answer.

"I asked this question of my office this morning; and the top 5 things they believed their clients (purchasers) required of them were:
1. Positive/reassuring attitude
2. Knowledge - of the market, neighbourhood, and industry
3. Interest in the purchaser and their needs
4. Understanding of the possibilities and options of improvement to a property
5. Punctuality and respect of the client"

Colin has a real estate agency in Cape Town, South Africa being a Consultant at PRO-PROP Property Consultants. He shares with me, and it seems his office does too, the ethos that we have here. First seek to understand the needs of the client and then work from there to help as much as possible.

With all the negativity associated with being an estate agent it is good to know that others see things in the same way. To see all of the answers go here

Thanks a lot Colin and hopefully if anyone who reads this blog is coming your way they will keep you in mind. Here is Colin's link
PRO-PROP Property Consultants Cape Town
PRO-PROP is an innovative property consultancy based in Cape Town, South Africa.

The Summer Lull

As usual everything is relatively quiet in Spain in August. Many shops shut up their doors for the whole month but this year the shutting up for the second half of the month is paticularly pronounced. It will be interesting to see how many estate agents, building companies and promotors don't bother to open up when September comes around.

Meanwhile, things are moving on apace with property as bargains are to be found throughtout the site at www.valencia-property.com and you have a chance to get a great deal through the people who wish to seel and release some equity on their property. Check out the site for more info and book your visit early because September looks very busy so far.

The Formula One Track

Just four weeks to go before the Formula 1 race here in Valencia and still lots of work to be done. I have attached a load of photos here for you to peruse and make up your own mind. The track itself is finished but appraently it was reported today that access points are too limited currently in case of crashes. In the photos you can see, stands that will be erected, the track itself at various points, tyres and various views.

Today I was given tickets for the first day of practice, thanks Will, and I will keep you informed of any major news right here.

Do You Want to Care for An 85 Year Old?

An absolute bargain of a house has come up for sale in Javea reduced from 270000 Euros to 180000 Euros for very urgent sale due to liquidity problems of the builder who owns it. This is 40% BMV compared with the local market as the owner needs money now. (I only have outside photos at the moment but I am assured it is very well kept inside and you can see it here) The only downside is that it has a sitting tenant with lifetime usage of the property. It may be possible to buy her out of this right for a price as she is 85. Meanwhile the house itself is 128m2 with three bedrooms, a couple of bathrooms, kitchen, lounge and covered and open terraces. The plot of almost 1000m2 is spacious and it is set in an excellent area of Javea, Portichell, near to all the local amenities.

Some More Video

Here are some pics that we took today and a video. The video was taken this morning when finally we got some sunshine after a week of cloud and rain. The house photos were taken this afternoon and it is a bit of a shame because the clouds had rolled in and the fantastic views from this house were made a lot greyer.




The videos are of the garden and living room of a house in La Pobla at 290,000 Euros. Excellent place to live surrounded by great facilities and just fifteen mins from Valencia on a good traffic day. Four bedrooms upstairs, a spare room downstairs, living room, kitchen, two bathrooms, toilet and garage along with covered terraces and a shared garden with large pool and friendly neighbours.

The pictures below are of the house in Catadau. The price of 400,000 includes the finishing of the house and surrounding walls and there are options to have a pool if required. The kitchen and the living room are huge and very well presented. There are four bedrooms although one would be better suited to being an office. However the office could go in the kitchen because it is huge. The views are spectacular all the way to Cullera to the south and Valencia to the north east.