Spanish Property

Personally think it's suicidal to take $AU and invest them in €EU denominated investments. Spain has a ways to travel before it sorts itself out. In the meantime I see the potential for civil war there again as Catalonia pushes for autonomy and the Basque separatist movement has for the time being quietened down but is by no means over. 

Europe's a slow moving train wreck and Spain is one of the lead carriages. 

If you are just looking for a holiday home and a place you will personally use and enjoy then there are some great bargains in Europe. If you are investing for rental return or capital gains, think very carefully and do ALOT of research. 

I reckon you're bang on the money. I hear there's cheap property in Libya, Egypt and Syria at the moment.

I know you meant this as a joke, but Lybia is actually very high on alot of radars at the moment. So are Spain and Italy. I know, they don't come with guarantees for regulated environments like Japan or Australia, they're scary foreigners, and they aren't deemed as safe as a term deposit in a big league bank or a bar of gold or platinum in the safe, but hey, it takes all sorts of crazy hipsters, don't it?

Daunting at first and requiring extensive research or connections, yes, but a gamble? I beg to differ- or at least not more of a gamble than your own back yard. There are many countries where the correct infrastructure setup will enable anyone to invest much more safely than in their countries of origin.

In Australia's case for instance, almost every property purchase, as regulated and "safe" as it seems, is a gamble, trying to beat neutral or close to neutral cashflow with appreciation speculation. There are far more reliable income generating, positively geared property investments available in other countries at the moment.

Scott, you are very right.

Sorry Ziv, an expert you are on other countries, not on Australia.

The risk in purchasing Australian property is very much lower. There is pretty much no chance of there ever being a civil war, currency as mentioned above is stable and the mentality behind the majority of property owners is one of stability.

While the cash flow returns are probably not as good as other countries, there are still excellent opportunities here. Grass isn' t always greener on the other side of the world. For someone to go to a country they may never have been to, try to negotiate and learn about property in what may be a 3 week holiday, have finance/cash at the ready and to purchase?! May not be the best option.

I also got the email on Libya, it was titled worst areas to buy property.

Once again, just my opinion. Emotion out, reason and rationality in. Holidays tend to be emotional times.

Cheers

D

No argument regarding Spain, definitely never advocated buying or even researching seriously on a 3-week holiday either. All I'm saying is that moderation in views and a balanced perspective is required. Australia is safe (legislation and social profile are at least), and probably reasonably well placed appreciation and asset protection wise as well.

However, reasonable long term cashflow, while being only one of many factors (albeit a crucial one, particularly in today's climate), is not the norm here, and requires extensive deal mining/creative renovations and builds to achieve.  Affordability is another major issue. And as far as regulated environments go, while Spain certainly isn't it, it isn't the only country in the world. Singapore, Hong Kong, Japan, the UK, Germany, France etc are only a few of the global property investment Meccas that have the same characteristics of safety and stability, with many other equal or often better factors to consider as well. Not many likely civil wars breaking out there either, and some of them offer far better deals than Australia has been in recent years. 

Italy as well, while I could be wildly wrong, is far too significant to too many lobbying international powers (the Catholic Church would be one that comes to mind almost immediately) to go completely underwater over the long term. Far more speculative than all of the mentioned above though, I do realize that. Lybia is the perfect frontier market for today's high risk venturists, and while I don't play or recommend anyone do that field, there are a great many who do so profitably. As long as you know what you're getting into and mitigate risk the best you can. It'll be much higher, but so will the yields. The USA isn't very far from that category atm, incidentally. It's certainly as easy to get stung there as it is in Italy, maybe easier, or so it would seem from what people have been posting on here in increasing frequency.

As someone who lived in Spain for 6 years until earlier this year (2012) and who is the Marketing director for an online property advertising company which seems to be attracting a lot of listings from foreign run real estate agents in Spain. My advice would be this.

Think very very carefully, there appears to be a lot of bargains on the market and it is true the prices have dropped considerably, however the price you see isn't the one you pay.  You must add 10% purchase tax to the price and be warned that 10% is calculated on what the banks valued the property at 6 years ago so you may get a bargain at 10,000 euros only to find you are required to pay 25,000 euros purchase tax.  Depending where the property is you may be required to pay a monthly community charge whether you are living in it or not, you will be required to pay tax on the property every year and at present Spanish IVA (vat) stands at 21% with tax at 26%.

If you wish to buy a development project be warned the red tape and license fees can be a nightmare and expensive, for example forget structural work, even if you want to change your kitchen you will be required to obtain permission from your local town hall and will need to pay for the privilege.

Many foreign buyers have found it impossible to cope with the red tape and meet repayments and many properties have been on the market for up to 4 years with some people just locking up and handing back the keys.

I personally have heard so many horror sorties over the last 5 years that I am glad I stuck to renting and kept my property in the UK.  That said yes the life style is a good one, so I would suggest before taking the plunge you take an extended break and rent in Spain for a minimum of a year before even considering buying.

Hope this doesn't put you off but does open your eyes a bit.

Cheers

Ah, finally, the voice of localized experience and reason. Thanks for chiming in, Scott, it's a refreshing change from the "beware the evil European property market" voices so common here! Of course there are risks and particular issues to look out for, but which country doesn't have those? That's what DD is all about – making informed choices, as opposed to knee jerk reactions.