New PM confirms that Spanish economy is still falling and has yet to reach rock bottom

[Janet]

The difference is that I see nice properties ... and they have lost around a third of their value, but no more. There is also money going into the renovation of key areas as part of Canarian Government legislation, and the money is filtered through the Cabildos and on to the ayuntamientos. I know some people would be pleased to see a total collapse, either because it would mean a free property, or because they've suffered in the islands and would feel a glum satisfaction at seeing them suffer in turn ... but this is not happening.

Tourism is the difference. The banks might end up giving bankrupt crap away in the newer and rushed-finished developments in hastily-expanded towns like San Isidro, Buzanada, and the like, but decent property built by reputable builders (rather than goldrush cowboys constructing on a shoestring budget) in good areas will not lose much, if any, more of their value than has already been lost ... and that is between 30 and 50% of 2008 prices.

In terms of traditional villages (like Arafo, indeed) then I'm afraid they are paying the price now for expanding optimism linked, without justification, to the tourist market. They now have to readjust, and in my own (fairly informed experienced) opinion, they will be the ones who pay the real price of the crisis. I suspect that here, some houses will go for a third of whatever asking price was being demanded around five years ago.

[minesadorada]

The opportunity now is to buy houses in Tenerife that simply would not be available for sale in less stringent times.  There are some really nice houses on the market now that were presumably owned by established local families that have fallen on hard times.

[Guanche]

I would get no pleasure from seeing a total collapse or get any satisfaction from seeing anyone suffer, although I do see people suffering in the North. On a personal note, I just take the whole thing on the chin. I've bought and sold several houses over the years and always made money, lucky for me. This time my luck ran out as I knew it would eventually. Whilst I won't lose money I just wont make as much as I wanted to, but as they say 'shit happens' I've enjoyed what I've done and I live in a great house so that more than make up for any loss I may or may not make.

I understand the 'Official side' trying to boost everything and talk things up its their job to do so. But when its based on stats from a EU body I have to approach it with some skepticism. A better indicator would be for the banks to publish how many mortgages have been granted and how many houses they still have on their books. How many houses have been sold and the price paid.

Just a thought, but do we think we're talking about two diffrent markets here. The tourist and expat market and the local market outside of the tourist areas? Could one market be giving a false reading to the other? Rather like the UK market London prices and Birmingham prices, for example .

[Janet]

Yes, they are two distinct markets, and it's when they're taken as one that both sides think the figures are nobbled! This is exactly my point in debate with poker about prices plummeting. Some will ... but others won't, and no-one will want the properties in the areas that have collapsed, or the ones still to come on the market from the banks desperate to offload them.

These were previously considered "propiedad basura" - utterly unsellable - but the banks have one arm twisted behind their backs now and have no choice but to release them onto the market. They won't affect the prices in the tourist-end of the market (or at least not much), though they'll almost certainly have a knock-on effect on other crap property currently on the market ... and also, unfortunately, on the traditional-property end of the market, because the market won't much distinguish between them.

This means that future real bargains will be either utter rubbish that no-one in their right mind would want, or village and small town traditional properties which have always piggybacked on other markets. Anyone who wants a property near the coast, or in the general tourist areas won't see much difference.

I agree with you though, G, that our house is a home and if it loses value it's no skin off our nose, apart from if one needs to sell and then the only rational response, as yours is, is to consider previous profits made on lucky investments in the past.

(I didn't have anyone here in mind with my comment about the glee in seeing a collapse ... but I've certainly come across it ... )