A fair percentage of our British neighbours have already sold up and left, many have gone back to their home land with a few relocating to other parts of Spain or France. There are still many whose homes are on the market who would like to return to Blighty.
Sadly, they face two major obstacles to fulfilling this dream:
1. Spanish house prices have dropped by at least 28pc from their peak in March 2008 and face a fall of 8pc this year and 5pc next year as the Spanish "bad bank" Sareb gradually sells its stock of 91,000 foreclosed homes.
Quote from the Daily Telegraph
Experts say the key reason why Spanish prices held up well in the early years of the crisis is that banks held onto foreclosed properties from bankrupt developers rather than take losses immediately and “clear” the market.
This began to change in 2012 as Santander, BBVA and other banks rushed to liquidate their portfolios before the onslaught from the nationalized banks folded into Sareb. The Spanish authorities have ordered Madrid to accelerate the pace of Sareb sales as a condition of the EU bail-out in July 2012.
Madrid consultants RR de Acuna said last December that there are almost 2m properties waiting to be sold, including 800,000 used homes on the market, and 700,000 units on the books of developers, 450,000 seized or in foreclosure and 250,000 still being built.
The group said prices are likely to fall a further 30pc in Madrid, Barcelona and other big cities before touching the bottom in 2018, with even steeper drops lasting a decade in some of the coastal areas that ran wild during the bubble. It said acres of concrete would have to be torn down and returned to pasture.
2. Since the beginning of the year, house prices have steadily risen in the UK. The government schemes in Britain to kick start house sales are having an effect. The Help to Buy scheme gives buyers up to 20% towards the cost of a new build up to the value of £600,000. The effect has been to create a 30% increase in mortgages since last June and has pushed the average price of homes in Britain close to £250,000 (over 290,000 euros).
NB Quarter of a million pounds is the price where stamp duty on houses rises from 1 to 3% so it is a significant figure for both buyers and sellers.
A glum prospect
Even if they can sell their houses in Bigastro, our neighbours face the prospect of having too little in return to buy anything remotely similar to their Spanish homes back in Britain. I joked with one of our neighbours that you could sell your house here only to buy a garage back in London – sadly that is probably true.
For example, I found a 140 sq m four bedroom new apartment in Bigastro for 72,800 euros and a three bedroom town house of 119 sq m for 120,000 euros. One of the Christina style. three bedroom, two storey houses on our estate is going for 89,000 euros – that is the equivalent of £77,000. For that price you’d get a two or possibly three bedroom terrace house in a somewhere like Bolton or Widnes back in Britain. Even the three bedroom, two bathroom Marias with a pool are selling for the equivalent of £129,000 which is just over half the average price of a house in Britain.