Posting in Government
VALENCIA -- No, the Spanish aren't the ones investing in it.
VALENCIA -- People want to live in Spain. The economy could be falling apart, but mild weather, laid-back style, and respect for elders make people want to turn the world's fourth most-visited country into their home or second home. While the housing and job markets are certainly not thriving like they were five or six years ago, if you've got an income that can travel with you, many people -- especially from China, as well as Northern Europe -- are choosing here.
SmartPlanet talked to Graham Hunt, real estate agent and owner of one of the very first Spanish property websites Valency-Property.com, which he started about 13 years ago. A definite part of the housing bubble's rapid growth and pop, Hunt is optimistic about the future and the present. "Because we were so successful, when the crash came, [in 2006, 2007] the business was organized really badly. But now," he says, his real estate business is "getting better and better, the last three years, doubled [profits] twice year over year."
There's no doubt that part of his nearly-continued success is this ex-Liverpoolian's embrace of the Internet as a marketing tool. SP cannot stress how rare this is in Spain. In 2011, one-percent of Spain's GDP was online sales, doubling the previous year; while, in that same year, 18 percent of the U.K. GDP was e-commerce. Imagine when Hunt started over a decade ago.
He is trying to spread his e-success around the Valencian province and then the rest of España. He asked, "How many times have you searched for real estate sites in Spain?" Following an awkward silence, he says, "You go to the single websites for the estate agents, [and] firstly, it's in flash and it's got music so you immediately turn it off."
Hunt says that, on the typical Spanish real estate agent websites in Spain, only 15 percent of agents respond to inquiries within 24 hours, while only half of agents reply to voicemail and calls. From a sales perspective, this is illogical at best, since folks that reach out to you are obviously more interested. Plus, the agents are paying to be a part of these real estate online portals, so they are effectively wasting their money.
Hunt says what SmartPlanet often hears, that the Spanish -- besides tickets and travel -- don't believe in online retail. "They want to touch, see and decide on something, and actually have a relationship with the person who's selling it," he says. "Also people don't trust putting their credit card details online. People don't trust it because it hasn't been communicated that it's actually more secure than a restaurant" or store, where their receipts and credit card information can be left behind. Even Amazon.es only began in the last year, while Spain's version of CraigsList SegundoMano is, as Hunt says, "a nest of cons." It is clear that "e-commerce is taking off, but it's a long way behind."
Hunt attributes at least part of his success to the Internet. Beyond ValenciaProperties, he has created the iPad-only, Spanish Property Magazine, now in its fourth issue. It's a collaborative magazine, where companies can pay to highlight their best deals of a month, as well as issues focusing on certain areas of Spain. He says the reason they chose iPad-only content is that there have been more than 100 million sold. "No company has ever sold 100 million units of anything in that time period," Hunt says.
Now, he is definitely looking international, as he only offers it in English. "I only want people who can buy properties to come through my estate agency," Hunt says. He pointed out that the majority of the Spanish don't have any money down, so "it's 100-percent mortgage and they can't get that." The banks here aren't offering any mortgages, except for the homes they've repossessed. "Go into a bank and say, 'I want a mortgage. Once they pull themselves off the floor laughing, [there are] dozens of hoops" to jump through, and then they will "try to sell bank property instead."
Hunt is looking off the peninsula for clients and readers of his magazine because "People still think [Spain] is a really good place to live and, if you've got your own job and your own investment," it works -- because there aren't exactly jobs, particularly for foreigners, in Spain, unless you create your own.
"I want my clients to be coming here, who have their own business and can work from anywhere." He says, "A lot of oil people -- a month on and a month off, generally the costal regions, put their kids in international schools."
His iPad zine is specifically marketed towards the Chinese. "The Chinese are coming over, looking for return on their investment. The property bubble in Shanghai has to be seen to be understood -- 800,000 [euros in] Shanghai for an equivalent 150,000 in Valencia; two hours out of Shanghai, about 600,000; three hours out, 350,000," Hunt says. He says the Chinese can get that return on investment in the south of Spain, where, getting "rent of 600 euros a month, they can get five percent return on their investment." Contrary to the large emigration of the Chinese into Madrid, in Valencia, "at the moment, the ones I'm getting, they are buying property as an investment, as there isn't in China because they aren't going to get anywhere near that return on investment."
Earlier this year, GlobalTrade.net became another news source to talk about the Chinese real estate boom in Spain. "These upper-income Chinese residents tend to buy their homes on cash-only transactions," reads the article, as these immigrants look to snatch up some of the more than three million empty Spanish homes, at a bargain rate. The newest buzz is that the Chinese are now buying one-million-euro homes around Madrid.
According to James Smyth, blogger who lives and translates in both Spain and China, "There are already 166,000 Chinese citizens residing in Spain, the majority of them from Zheiiang Province," next to Shanghai. He says, "In the Community of Madrid, there are 46,420 [Chinese residents,] 4.37 percent of the foreign population." Whether the Chinese are running the omnipresent convenience, euro and inexpensive clothing shops and restaurants -- all of which, the Spanish simply refer to as chinos -- or if they are looking to invest in property to rent out or for their second homes, there's no doubt that they make up a rapidly-growing homebuyers' market in Spain.
But the Chinese aren't the only ones. Hunt's other clients include "Northern Europe -- Belgians, Swedes, Norwegians, and French. Some to get a second home or they've sold theirs and are looking to retire or semi-retire here. And Americans and Canadians," though most of them are looking to relocate. "People still think it's a really good place to live and if you've got your own job and your own investment," it works.
"I think Spain's a very nice place to live and I still think younger people are very respectful of their elders," Hunt says, using the example of Valencian teens moving to allow seniors to pass, while the seniors pat niños on their heads. Of course, folks love the weather, and "the fact that it's perceived to be safe and it's perceived to be a nice place to live," says Hunt. He continues to argue that Spain doesn't seem "foreign," like Northern Africa or Bulgaria, which once saw Brits and the Irish flocking to summer homes or retiring there, before they found themselves a bit out of place.
Hunt says, "International sales have gone up this year -- quarter after quarter. People who are not already living here are coming into the country," particularly since the British Pound is up again.
This is in addition to the fact that "prices have dropped 35 to 40 percent," during the last five years. This is the percentage Hunt has seen. Some real estate agents can be selling up to a 53 percent drop, while the government is saying about 21 percent. He says that this low number is based on government statistics, which are inevitably skewed. "It was always bad figures because there was always so much black money," he says. It's common knowledge that over a quarter of all of the 500 Euro bank notes have been in Spain since the beginning of the currency ten years ago, mostly floating around the housing market.
"We always suggest to pay the full amount," he says, because, nowadays, houses aren't selling for what they used to, and, when you resell the house, with less black money available, you cannot claim the previously-higher price, thus receiving a smaller break on your capital gains tax. "Now there's less black money now and therefore the capital gains is much higher. They might actually be selling at a lower place than they bought, but they blur everything," because of the under-the-table aspects of the previous deals, Hunt says.
While he is optimistic about how his opportunities are continuing to rise in Spain, he believes, "There's no end to the crisis," in the foreseeable future. There's no doubt that Hunt is on "Team Let's Leave the Euro." "From my point of view, the lower the prices go, the more sales I'm going to make. When the prices were the highest in 2007, I'd get asked by clients if this is a good investment, I'd say, 'No way'," he says.
When the "Pound, Swedish Kroner, Chinese Yen, American and Canadian dollars...go up against the Euro, they are more likely to buy in Spain," he says. "In the worst case scenario, Spain leaves the Euro" and we have a new Peseta, devalued by 30 to 35 percent, "I'd have to fight clients off with a stick" because the day-to-day living is so attractive, as long as "they are earning in another currency, like a pension." He says that, "on a personal level, I think it's the only way Spain will be able to get out of its debt. It'd be suddenly cheaper to build stuff -- Germany, England, the U.S., will build factories here."
Photos: Spanish Property Magazine
Nov 11, 2012
You make sense out of the most complex topics.
Well I believe that people have different preferences in respect of living at places but as for Spain is concerned it is always good to live there. http://kathylangsnerhomes.com/
I also wish to live in Spain and as Graham Hunt said they are optimistic that people will opt to live in Spain in spite of falling economy. http://www.bairstoweves.co.uk/forsaleoffice/tamworth/264/
Great to read about someone walking the walk with a positive attitude. There seems to me to be a consensus emerging that for the next few years the Spanish economy will be recalibrating itself - that entrepreneurs and small businesses will be a driving force and that opportunities will be there for the creative. There does seem to be something about Spain, moreover, that transcends statistics. A remarkably diverse cross-section of people are drawn to this country, whether it be to its magnificent cities or to the expat communities of the coasts, whether it be the property trade, online entrepreneurship or self-sufficient farming. Spain itself is a renewable resource
I thought the information was spot on although I was disappointed with the lack of attention to detail by the writer which detracted from the article. (Liverpoolian, Swedish kroner, SegundoMano etc) . What's not to love? At midnight tonight I was having a coffee in a pavement cafe ....try that in the middle of November in Stockholm, Helsinki or Berlin! Better still was that I was in shirtsleeves and my more-than-I-could-eat supper was less than one stop on the bus in Oslo, or two pints in London! Spain has been my home for 10+ years and will continue to be my home as long as I can have hi-speed internet access Spain has its challenges. It will bounce .... of that I have zero doubt!
Always good to sea a reasoned analysis of Spain and its property market. Big falls are always followed by rises (unless things get so bad that we all need to live in teepees) and Spain is looking like a more attractive place to buy property in every day. Foods not half bad either!
I agree that the level of respect shown to elders is much greater here than in the UK. However, it's respect across all the family members. I remember going out for a meal with my children in the UK. Now I know I'm biased but they are not particularly noisy. However, the glares and stares we received from other tables if they deigned so much as to open their mouth were borderline offensive. It's the polar opposite in Gran Canaria where I live. However, I do take issue with Graham's claim that people prefer Spain over the likes of North Africa and Bulgaria because it's less different. The expat communities in any of these locations would cushion the impact of relocation. Which is why I choose to live away from them. Spain/Turkey/Wherever is different: adapt/live in an expat bubble/return to your home country.
Nobody that hasn't been to Spain knows how true are the statements on this article. I've lived there in Barcelona and Valencia for many years and can vouch for every single printed word. The weather, the food, the cities, its people..., wow! just remembering those days I could start crying over my keyboard inconsolably till tomorrow! I've also lived in the USA, in Italy and in Argentina, NOTHING compares to Spain. If you have the economic possibilities explained within this article, PLEASE, get rid of everything, dust your passport AND GO!!! You'll never regret it.
Good to hear it David. It's about time people started talking about what it is really like to live in Spain. I know hundreds and hundreds of people quietly getting on with their very happy lives here.