Living the dream or facing the nightmare ? For many a mediterrenean lifestyle in a warm climate with a dream home by the sea is the ultimate dream. However, Spain has been hit hard by the eurozone crisis and to many the dream has turned into a nightmare. Those who took out mortgages during the boom years up until 2008 have been facing negative equity and the suddenly very urgent perspective of potentially being repossesed by the bank. Simultaniously unemployment in Spain has hit an alltime high with more than 25% of the workforce out of work.
Thousands upon thousands of expats have traded the dream of a life in a beach resort for a return ticket to their homelands. Leaving behind less demand for services and housing. Combined the consequences for Spain and the expat community have been dire. All the bigger banks such as BBVA, Santander and Bankia have thousands of repossessed townhouses, fincas, villas and apartments on the books that theyre trying to offload at bargain prices.
Not everything is doom and gloom though. The weather is still excellent in Spain, the tourists are flocking the beaches, the food is as excellent as ever and the lifestyle is still charming. It is also worth remembering that the crisis will end. If not today then maybe tomorrow. Point being that however hopeless the employment situation and property market seems at the moment, there will be a hefty upturn too around the corner someplace. With property prices at a level not seen this low for decades this lends you a golden opportunity if you have savings or solidity to secure a mortgage for purchasing a Spanish property.
Dont buy one if youre on a tight budget or reliant on securing a job locally in Spain to pay for it. But if you want a longer term return on investment it may just be the best option out there – the demand for properties is artificially low due to the crisis and the banks limiting lending. Thus, prices are due to bounce back when the economy starts recovering and if you have invested in a Spanish property in meantime, you can reap very tidy profits. Particularly if you research a strong location and a solid property available at a bargain price via the bank foreclosure schemes. You can compare the Spanish foreclosure market to the situation if you were to for instance Buy U.S. Foreclosures, and you will soon discover that whilst the same crisis hit both market – Spain is hit the worst. Basically, that makes it all the more important that you have the economy to safely pay for your purchase, but it also commands a bigger potential profit in the long run.
Do your homework. Check the market and individual properties carefully. Acquire the help of a lawyer … but dont give up. Living the dream is still possible and in fact potentially very profitable too, if you manage to find the right property at a bargain price. Those dream homes are available in Spain right now at fantastic prices. Just do your due dilligence and dig out the best one for you and your family.
Moving to any “foreign” country can be equally as fantastic adventure, as it can be an absolute nightmare if you are not prepared, or if you don’t know a few of the tricks that help you get by from day to day.
I have indicated a few tips before you leave to come here, and a couple of tips to bear in mind when you arrive and start to make your life here.
All the points below are based on personal experience and I would encourage you to try out at least a couple of them to see what I mean.
Research, and then do some more!
I cannot stress enough, do your research before moving to Spain and don’t leave anything to chance. Rent before you buy, to get a good feel of the area you have chosen to live.
Remember, being on holiday in a place is very different form living there, and if you enjoy the nightlife, and move to a resort on the coast, bear in mind that during the winter these places can be like ghost towns and many shops, bars etc, close for the winter because of this so be warned!
Do not agree to buy somewhere “off plan” i.e. not built yet, you WILL lose all your money. Keep a UK bank account too, don’t totally cut yourself off, even if you do not plan on ever moving back, things can happen and times change.
Now you’re in Spain, what next?
Shops in Spain often choose their own opening hours, and always subject to last minute changes. They have a more laid back attitude to work, and to customer service, so save yourself the upset and expect the worse when you go shopping. Don’t be surprised, especially in some of the Chinese bargain shops that have sprung up everywhere, to be followed around the store like a shoplifter. Again, go out and try this for yourself, its true!
If like me, you like to go out and eat from time to time, money permitting, you will soon have found out that the Spanish are real sticklers for meal times, sometimes quite bizarrely so.
If you want to get a table in a restaurant for lunch (much longer, larger and slower than a uk lunch), here is a handy tip….
The Spanish, without fail, will turn up for lunch at EXACTLY 2 pm.! (Go on, go out and see for yourself, it really is true!), so if you want the best table, turn up between 1.15 and 1.30 and you will have your pick!
If you like a drink out, it is MUCH cheaper to buy wine and beer than it is to buy soft drinks. So it’s your round next!
Apart from expat resorts, Spanish don’t drink pints. The weather and humidity means that the pint is warm and flat before it gets halfway down. Drink “Terceros” (third of a litre bottles) which usually only cost about 1.50, and you will find you will waste far less beer, which as any man knows, is a crime in itself!
LEARN THE LANGUAGE! Your life will be easier and more rewarding if you make an effort and learn at least a bit of Spanish.
On a more important note, here’s a few other handy tips.
Get an NIE (Foreigners national insurance number) pretty soon after you arrive. In some towns its easy and some hard, but you need a bilingual “Gestor” to do this for you, and that is in fact another handy tip, a Gestor a cross between an accountant and a civil servant but employed outside the state system. his person can help you with many things, including sometimes, translation. Various companies will offer you similar services as part of relocation to Spain packages, but to get it done properly hiring a local Gestor is usual better.
Register yourself at the nearest health centre and get on the Spanish SIP (health card) system as soon as you can. If you are bringing kids to Spain, they will have to be on the health care system before they can be admitted to a school.
And finally, take your time and don’t expect everything to fall into place overnight. Moving to foreign shores is a big step, but if done right, you can sit back and enjoy your every own life in the sun!
New Spanish immigration laws for EU citizens have come into force in July 2012. First and foremost the laws tighten you can obtain permanent residency in Spain and on what terms. How does it affect you and your plans to obtain a dream home in Spain?
The most likely answer is: It doesn’t!
Hefty debate is ongoing about the new laws restricting EU citizens from settling in Spain. Is it the first step towards Spain leaving the EU? Is it a violation of the Schengen treaty? These may be future legal battles and/or polemic political debates, but the effect on you as a future home owner in Spain is likely to be minimal.
What the new law states as requirements for permanent residence in Spain:
You must be self supporting (Job, Pension, Self employed) or
Have sufficient means in the bank / other assets and
Have valid health care (private or public from your country of origin)
In other words, you can´t move to Spain and immediately sponge off the social system there. But then, were you really planning to?
If you are looking for a future dream home in Spain for your family to have as a base for a new life, you either have the cash to buy that house, a sufficiently good finances to secure a mortgage for it or at the very least enough money for a deposit and moving costs for a rental villa. That almost certainly means you have a way of supporting yourself … and if not, you should probably reconsider the move anyway.
Do as you always would. Find your preferred area, locate the property of your dreams and plan for the future ahead. The law says you have to be able to support yourself to realize your dream of a life in Spain – but it wouldnt be much of a life if you couldnt, would it? Theres a more thorough review of the new immigration law and its consequences for future expats in Spain here: Jávea Spain: Moving To Spain / A New Livelihood
The EURO has kept crashing due to the trouble in the eurozone economies. Spain, Greece, Italy, Portugal and Ireland have all been in various kinds of trouble and as a consequence you will now benefit from buying Spanish property in any other currency than the EURO itself.
Is it a good time to buy then ?
Yes and no. If you have savings in pounds, dollars, francs, Swedish kroner, rubles or whatever it might be, they will buy you more of a Spanish dream property than ever before. Not only are the prices well below their peak in EUROs, the euro itself is also cheaper to buy. Overall of course that makes coming to Spain and buying a property a unique and cheap option at the moment. However, there is a flip side to the coin. No mortgages are available from Spanish banks as they’re all overly exposed to the local property market, several of them at a level where they risk collapse.
Foreign banks in a variety of countries do have mortgages for solid customers wishing to buy a house, but may still refuse to provide one for a house in Spain. Plainly spoken, a EURO collapse or Spanish euro exit would deliver another blow to the Spanish property market and as such turn any equity into a negative immediately and/or compromise the ability to repay in case of a forced sale.
In other words, it can´t be ruled out that Spanish properties will continue to fall in prices, in the case of a default or Euro-exit it could be sudden and drastic. However, if you simply look at the prices, the value you can get right now and the long term attractiveness of the properties on the market right now, there are some fantastic bargains to be had if you have the money yourself. Buying to keep is perfectly timed, buying to enjoy is rarely a bad idea, buying with a long term purpose is most likely an excellent investment – but buying on a tight budget and a 100% mortgage with the aim of flipping the property soon is a game of Russian roulette.
You know what your dream is, your perfect vision for the perfect house in Spain to be the base of a fresh lifestyle in the sun. You are probably sitting at home looking at potential rental properties on website after website. Drooling over one magnificent looking villa or apartment in Spain after the other.
But we all know pictures can be deceiving. The rental agent may have taken the charming picture of the glorious Spanish garden with palm trees, a pool and an outdoor kitchen at just the right angle to avoid revealing the shopping mall, motorway or other unpleasantnesses just behind it. A wide angel lens may have made the tiny cupboard of a lounge look like a ballroom. The mold running down the wall may just have missed the picture to make room for the stunning view towards the patio.
Obviously, actually heading to all the properties you are interested in will reveal the thin layer of make-up applied to run-down properties in unattractive locations, however many an immigration to Spain has been enacted without a previous viewing of the rental property due to time constraints or the logistics involved. It goes without saying that taking a working holiday in the area you consider moving to is preferential. Though, even if you do decide to view all properties carefully in advance – wouldn’t it be nice to be able to narrow down the attractive ones and allow yourself more time to visit and view the attractive options?
The way forward is to insist on proper, honest and thorough video footage of the rental properties before booking a viewing. Several agents do their own videos these days. Sometimes they are spot on and helpful, at other times they conveniently show a quick panorama of the good bits but fail to take you on an actual guided tour of the property. Don´t let them fool you and never settle for second best. If the agent chooses not to provide you with a complete view of the property, why could that possible be? Laziness? Something to hide? Do you really wanna waste your precious time finding out, when you could in fact be out finding the perfect future home for your family instead?
Of course not. Go with the rental agents who provide a proper service and are not afraid to give you an honest demonstration of the qualities of their properties. .
Here is an example of how a property presentation video can be done in a way that benefits the potential tenant by taking him all around the property in a series of video slides:
This one is from a villa in Javea Spain. They can be done as actual videos, a mix of video and photos or a thorough selection of photographs from around the property. We would suggest specifically looking for the agents using Property Videos Spain as they have a reputation for making not only eye-catching presentations to get the properties rented, but also for doing so in a transparent way that gives the potential tenant a clear view of the upsides as well as downsides to the properties.
As a further bonus, the Javea rental agents using the services of Property Videos Spain will be able to supply a complete property inventory video, which is something you should always ask for when renting – it saves alot of potential hassle, frustration and expense when the exact inventory and state of the villa at the time of moving in is documented in a way that can not be brought into dispute by either side later.