Should Mallorcan businesses get it right? Get English right? It was once put to me that it didn't matter and that mangled English was just all part of the charm. Possibly so, but possibly it is also a case of being lazy or of mistake reinforcing mistake.
There are any number of English speakers knocking around who might help a restaurant, a shop, an event, an estate agency from making a language gaffe. Are any ever asked to give a menu, some instructions, a sign the once-over, just to be sure? Some are, but there are plenty of businesses who still manage to mangle English. All part of the charm perhaps, but there is charm and there is being professional.
Recently, we had the priceless "rules" set out by the Pollensa Music Festival, under which, among other things, it was not allowed "to enter any type of container nor devices of telephony". We know what they were getting at, but a little bit of attention might have eliminated the potential for confusion or indeed hilarity.
There have been some wonderful mistakes that I have encountered over the years. A personal favourite remains the "flesh on the tenterhooks" of a grill restaurant. The owner said that the printers who had been responsible for the translation had insisted that they could do the English correctly. Which may be part of the problem; that of non-native speakers who fall into the language trap.
"Flesh on the tenterhooks" was, one presumed, meant to be something along the lines of tender meat, but it came out as sounding like an act of torture by the Inquisition. Tenterhooks, for the record, have nothing to do with cooking and everything to do with stretching cloth.
Making a complete balls-up has arguably been made more likely thanks to the Google translator and other machine translation systems. And when it comes to idioms and slang terms, of which there are an awful lot in English, such systems are almost completely useless.
Some mistakes, however, just keep on getting repeated. And a prime example is the "state agency"; not an agency of the state, but an estate agency. You can find many states that appear to be being traded by state agencies which should in fact be estate agencies.
A new sign appeared at one estate agency the other day, replete with the same old mistake. But why does it keep being made? Has no one ever pointed the mistake out? My guess is that "state" is so common that it is thought to be correct, not least by signmakers who will insist that it is correct as they have been in this state for years.
Proper names can also be problematic. In certain cases, they always have been. In Puerto Alcúdia, the recent fire at an apartment block caused a bit of a problem as to how it should be reported. The apartments have always lacked one letter. Who originally took the "p" out of the Mississipi (sic)? The same person possibly who didn't see the "c" in the Picadilly (sic) bar. Has anyone ever noticed the missing "n" that means that the Britania (sic) bar doesn't rule the waves? (The missing "p" might be put down to being Spanish, but then in Spanish there would be a missing "s" as well - twice over; Picadilly and Britania are Spanish, but their markets have been British.)
Not that these probably matter. Test your average Brit tourist and, nine times out of ten, he wouldn't know how to spell them anyway. And it's certainly not as though the language trap doesn't work in reverse or that borrowing from Spanish doesn't come into play.
Pop along to your nearest state agency, or preferably estate agency, and you might find a property that takes your fancy. However, the state agent tells you that it is in need of reform. Has it been a naughty boy? Is it to have its law changed? The widespread use of reform to mean altering a building in some way isn't, strictly speaking, correct usage. Incorrect or not, it is a good example of a word whose meaning has been borrowed from Spanish that, because of its generality, works rather better than correct English alternatives.
And the property needing reform might well be in an urbanisation, another specific adaptation from the Spanish to mean an estate, or should it be a state? Once reformed, the property may well become "perfect", states of perfection being more widely expressed by "perfecto" Spaniards and therefore also now by English-speaking adopters.
To answer my initial question though. Tell me. Should they get it right? Go on, tell me. I command you. The abrupt, somewhat impolite use of this imperative is something else that has passed from Spanish. "Digame". Tell me.
Any comments to andrew@thealcudiaguide.com please.
Showing posts with label Estate agents. Show all posts
Showing posts with label Estate agents. Show all posts
Thursday, July 14, 2011
Friday, August 29, 2008
House Of Pain
Spanish property developers may have been going belly-up, but obviously it is not only Spanish builders suffering during "the crisis". Remember what I said a while ago about Taylor Woodrow in Puerto Pollensa having failed to yet sell all the apartments at its Pollentia Mar development? Things aren't too great for the company, Taylor Wimpey as it is now. An 85% drop in the profit of its Spanish division.
The property market is in a state of stasis. The Balearics registered the greatest decline in mortgages of all the Spanish regions during June. Even the luxury end, that luxury end which "The Bulletin" would have us believe is some form of über-wedged salvation, is not necessarily enjoying the benefit of those bulging pockets. There is an agency hereabouts that wants, needs, to offload one of its offices; high overhead is a killer even at the luxury end in the current circumstances. The British market, even for those for whom high property prices may not be too challenging, has run aground, courtesy of the poor exchange rate.
There is something of a myth that the British, and other foreigners, were largely to blame (or to praise, depending on your point of view) for rises in property prices. To an extent, this was the case, but it is far from the whole story. There was one major and artificial factor in the historic elevation of property prices, and that was the introduction of the euro. I seem to have mentioned this before, but it bears repetition. It all had to do with pesetas that were never banked and which to have done so in order to obtain euros would have made those pesetas "visible". The way out of this dilemma was to buy property.
The boom in housing did clearly contribute to an overall appreciation in values, though here again one cannot be certain that all was as it seemed. The declared prices of property have increased in a land where traditionally there has been a sizeable chunk of undeclared price. Mathematics, as much as real values, fuelled the property boom. And then there were all the estate agents. That many have been the victim of the property crash may be no bad thing. So many agencies and so much desire to make healthy commissions. One fancies that the agencies were, in part at any rate, a factor in driving up prices. The director of a branch of one agency once told me that he had to curb the "enthusiasm" of his sales team for excessively high prices, but admitted that this was difficult given the equal enthusiasm amongst sellers, especially Mallorcan sellers, to extract as much as possible. The foreign purchaser did indeed contribute to upping property values, but it took and takes four to do the property tango - buyer, seller, agency and bank. Buyers were only too happy to join them on the dance floor, seduced by impressions of good investment opportunities that may not have been as they seemed. And of course the banks were only too happy to go along with it all.
A mark of the present nature of the market is that not only have agencies gone to the wall most have retrenched in terms of marketing spend. Gone, or so it would appear as one doesn't see them around, are most of the property magazines, of which there were four or five prominent ones. In spring last year, one of them approached me with regard to developing more sales in the north. It proved to be a pretty forlorn task, and that was in June of last year when the word already was of "crisis", a word that only really came into everyone's consciousness this year. The internet has become the default medium for promotion, but this is only as good as sites' optimisation can make it.
Yet there persist lunatic prices. Take this example. Friends of mine are renting a house in Puerto Alcúdia. The owner has offered it for sale at 400,000. This offer is a mere 50,000 more than a previous "valuation". How can this possibly be? The Mallorcan propensity to grab for cash is legion (and I have spoken before about the apparent "greed" that is an accusation levelled at Mallorcans), but a 14% increase at a time of extreme difficulty in the market is an obscenity of avarice; it would be even in good times. I know the property. I also know properties close by that are for sale at similar prices. The new price is totally unrealistic by comparison.
HOW MUCH IS THAT DOGGY ON THE PAVEMENT?
And continuing a theme ... It should not be overlooked that much of the canine output to be encountered on the local pavements is there courtesy of dogs without chaperon. There was me thinking that Mallorca's dogs are meant to be on the lead at all times; how stupid to think that a regulation here might be applied assiduously. Down the road lives this dog. It's a very nice dog. Pretty clever, too; either that or it has a key. Two or three times a day it goes for a trot around the neighbourhood, indulges in some prolonged and non-specific barking, finds a convenient spot as its convenience and has a good old dump. Who does let the dogs out? Not only do they have scant regard for lavatorial decorum, man's best friends have little idea when it comes to the highway or pedestrian code either. Main road? That'll do nicely. Side road? Just as good. This morning, I was about to pull away in a street in Can Picafort. Where's that damn dog gone? I saw it coming, and then couldn't see it. Had to get out to make sure I wasn't about to turn it into a dog's dinner for the local ant population.
QUIZ
Yesterday's title - Little Feat (http://www.youtube.com/watch?v=VDZn6TJwwZg). The video is an overlong recent-ish live version, but still captures the essence of what was a great piece of music. Today's title - what's the connection with their big hit and Robin Williams?
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
The property market is in a state of stasis. The Balearics registered the greatest decline in mortgages of all the Spanish regions during June. Even the luxury end, that luxury end which "The Bulletin" would have us believe is some form of über-wedged salvation, is not necessarily enjoying the benefit of those bulging pockets. There is an agency hereabouts that wants, needs, to offload one of its offices; high overhead is a killer even at the luxury end in the current circumstances. The British market, even for those for whom high property prices may not be too challenging, has run aground, courtesy of the poor exchange rate.
There is something of a myth that the British, and other foreigners, were largely to blame (or to praise, depending on your point of view) for rises in property prices. To an extent, this was the case, but it is far from the whole story. There was one major and artificial factor in the historic elevation of property prices, and that was the introduction of the euro. I seem to have mentioned this before, but it bears repetition. It all had to do with pesetas that were never banked and which to have done so in order to obtain euros would have made those pesetas "visible". The way out of this dilemma was to buy property.
The boom in housing did clearly contribute to an overall appreciation in values, though here again one cannot be certain that all was as it seemed. The declared prices of property have increased in a land where traditionally there has been a sizeable chunk of undeclared price. Mathematics, as much as real values, fuelled the property boom. And then there were all the estate agents. That many have been the victim of the property crash may be no bad thing. So many agencies and so much desire to make healthy commissions. One fancies that the agencies were, in part at any rate, a factor in driving up prices. The director of a branch of one agency once told me that he had to curb the "enthusiasm" of his sales team for excessively high prices, but admitted that this was difficult given the equal enthusiasm amongst sellers, especially Mallorcan sellers, to extract as much as possible. The foreign purchaser did indeed contribute to upping property values, but it took and takes four to do the property tango - buyer, seller, agency and bank. Buyers were only too happy to join them on the dance floor, seduced by impressions of good investment opportunities that may not have been as they seemed. And of course the banks were only too happy to go along with it all.
A mark of the present nature of the market is that not only have agencies gone to the wall most have retrenched in terms of marketing spend. Gone, or so it would appear as one doesn't see them around, are most of the property magazines, of which there were four or five prominent ones. In spring last year, one of them approached me with regard to developing more sales in the north. It proved to be a pretty forlorn task, and that was in June of last year when the word already was of "crisis", a word that only really came into everyone's consciousness this year. The internet has become the default medium for promotion, but this is only as good as sites' optimisation can make it.
Yet there persist lunatic prices. Take this example. Friends of mine are renting a house in Puerto Alcúdia. The owner has offered it for sale at 400,000. This offer is a mere 50,000 more than a previous "valuation". How can this possibly be? The Mallorcan propensity to grab for cash is legion (and I have spoken before about the apparent "greed" that is an accusation levelled at Mallorcans), but a 14% increase at a time of extreme difficulty in the market is an obscenity of avarice; it would be even in good times. I know the property. I also know properties close by that are for sale at similar prices. The new price is totally unrealistic by comparison.
HOW MUCH IS THAT DOGGY ON THE PAVEMENT?
And continuing a theme ... It should not be overlooked that much of the canine output to be encountered on the local pavements is there courtesy of dogs without chaperon. There was me thinking that Mallorca's dogs are meant to be on the lead at all times; how stupid to think that a regulation here might be applied assiduously. Down the road lives this dog. It's a very nice dog. Pretty clever, too; either that or it has a key. Two or three times a day it goes for a trot around the neighbourhood, indulges in some prolonged and non-specific barking, finds a convenient spot as its convenience and has a good old dump. Who does let the dogs out? Not only do they have scant regard for lavatorial decorum, man's best friends have little idea when it comes to the highway or pedestrian code either. Main road? That'll do nicely. Side road? Just as good. This morning, I was about to pull away in a street in Can Picafort. Where's that damn dog gone? I saw it coming, and then couldn't see it. Had to get out to make sure I wasn't about to turn it into a dog's dinner for the local ant population.
QUIZ
Yesterday's title - Little Feat (http://www.youtube.com/watch?v=VDZn6TJwwZg). The video is an overlong recent-ish live version, but still captures the essence of what was a great piece of music. Today's title - what's the connection with their big hit and Robin Williams?
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
Wednesday, December 12, 2007
Dallied And Dillied
You wonder what all the fuss was about. I still hold with the accusation that the Juaneda group could have handled the closure of the Hospital d’Alcúdia better, but the fact that it plans to open a new facility in Alcúdia softens the blow. This new centre will be located in two buildings on the Camí del Mal Pas (this is the road leaving Alcúdia in the direction of Bonaire, La Victoria and also of course Mal Pas). As such, it won’t be that far from the closed-down hospital and will offer pretty much all that was available at the hospital save for in-patients and presumably also intensive care (which ceased at the hospital some months ago).
But why did Juaneda not just say what they had planned rather than letting the rumours drag on? Had they envisaged, all along, a new facility and shifting actual hospitalisation to Muro, and had said so, they could have saved a lot of headache, confusion and ill will. That patients will be assigned a bed down the road in Playa de Muro is hardly an inconvenience, and it was never going to be an inconvenience: Juaneda’s obfuscation allowed it to be presented as such.
The front page of the current “Mallorca Zeitung”, the German weekly, flags up the promise of riches for estate agents in the form of Russian buyers. I knew there was a reason why Anna Kournikova was a “face” of Mallorca. What better for some oligarch, pockets bulging with roubles and various other denominations, than to offshore the wonga into a Mallorcan dacha with its own helipad, beetroot plantation, vodka distillery, and lodgings for the bodyguards? Should be fun for someone trying to sort out that money trail. Should be fun for some of the estate agents with their translations as well. Russian? There are those that struggle with English, some of them run by the English. Comprises of, anyone?
QUIZ
Yesterday – “Fire”, The Crazy World Of Arthur Brown. Today’s title – in honour of Juaneda, where does this line come from?
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
But why did Juaneda not just say what they had planned rather than letting the rumours drag on? Had they envisaged, all along, a new facility and shifting actual hospitalisation to Muro, and had said so, they could have saved a lot of headache, confusion and ill will. That patients will be assigned a bed down the road in Playa de Muro is hardly an inconvenience, and it was never going to be an inconvenience: Juaneda’s obfuscation allowed it to be presented as such.
The front page of the current “Mallorca Zeitung”, the German weekly, flags up the promise of riches for estate agents in the form of Russian buyers. I knew there was a reason why Anna Kournikova was a “face” of Mallorca. What better for some oligarch, pockets bulging with roubles and various other denominations, than to offshore the wonga into a Mallorcan dacha with its own helipad, beetroot plantation, vodka distillery, and lodgings for the bodyguards? Should be fun for someone trying to sort out that money trail. Should be fun for some of the estate agents with their translations as well. Russian? There are those that struggle with English, some of them run by the English. Comprises of, anyone?
QUIZ
Yesterday – “Fire”, The Crazy World Of Arthur Brown. Today’s title – in honour of Juaneda, where does this line come from?
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
Monday, August 27, 2007
It’s Build A House Where We Can Stay
There’s a new museum on the way. The Alcúdia town hall has agreed that the central Culture Ministry (in a consortium with the town hall, the Balearic Government and the Mallorca Council) will take responsibility for the construction of a new Pollentia Museum (Pollentia being the Roman town). This will be sited opposite the school (close to Mercadona and next to Sa Romana restaurant) on the Calle Pollentia. The hope is that this will offer something more dynamic than the current small museum next to the Sant Jaume church. Well, we’ll see. To be brutally frank, the current museum is a tad unimpressive, so anything would be an improvement. With the mooted arts and sciences museum on the site of the old power station by the commercial port (23 May: Red Rain), the new building will give - in the words of Ultima Hora - “a great impulse to cultural tourism in the north of Mallorca”. Maybe. I’m yet to be convinced, though if the power station site really does have something exciting, that impulse could yet be realised.
PROPERTY MARKET
The hike in interest rates coming from the European Central Bank is having a negative effect in the sense that - obviously - mortgage repayments have risen substantially. Moreover, according to the head of the association of Balearic estate agents, the interest rises have caused a fall in demand by as much as 20%. While defaults are not necessarily going to happen, the Spanish central bank has nevertheless called on banks to try and prevent defaulting (which has, presumably, to mean a limit on credit). Putting this in context, there has been an annual 7% increase in the granting of loans/mortgages over the past three years. So, while the property market has been buoyant, the worry is that it has been predicated - as in other countries - on too-easy credit. Talking to local estate agents, it is clear that the market has, certainly at the lower and middle ends, all but ground to a halt.
QUIZ
Yesterday - Joni Mitchell. Today’s title is a line from ... ?
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
PROPERTY MARKET
The hike in interest rates coming from the European Central Bank is having a negative effect in the sense that - obviously - mortgage repayments have risen substantially. Moreover, according to the head of the association of Balearic estate agents, the interest rises have caused a fall in demand by as much as 20%. While defaults are not necessarily going to happen, the Spanish central bank has nevertheless called on banks to try and prevent defaulting (which has, presumably, to mean a limit on credit). Putting this in context, there has been an annual 7% increase in the granting of loans/mortgages over the past three years. So, while the property market has been buoyant, the worry is that it has been predicated - as in other countries - on too-easy credit. Talking to local estate agents, it is clear that the market has, certainly at the lower and middle ends, all but ground to a halt.
QUIZ
Yesterday - Joni Mitchell. Today’s title is a line from ... ?
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
Thursday, June 28, 2007
Things Can Only Get Better
Well, hopefully. Word is things are not too great this season. There again, you hear this every year. Someone said it’s 30% down. There are complaints of lack of people and especially lack of spend. We have been here before. Last year, to be precise. That was a record year, allegedly.
All-inclusives are the devil in all this, but there are other factors. And people are being more careful with the money. Why? Debt, that’s why.
Another departure from Estate Agent Street in Puerto Pollensa. Barnard Hamilton’s office has closed. But this is a positive closure. The new one is at the start of the pinewalk. And very impressive it is, too. Very impressive.
A letter to “The Bulletin” sheds some light on the resurfacing of roads. Apparently it has to be done when the weather’s hot - for technical reasons that I don’t need to bother you with. I had kind of thought this might be a factor. Except. Why then do they surface roads when it isn’t hot? Confused? You soon will be.
Which brings me to the quiz. That last line came from a very famous sitcom. What was it? Also, in recognition of Tone’s departure and Gord’s ascent, I’ve wheeled out today’s title. No prizes for knowing D:Ream, but who was number one when Tone became PM first time round. Was it Oasis, R. Kelly or The Spice Girls?
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
All-inclusives are the devil in all this, but there are other factors. And people are being more careful with the money. Why? Debt, that’s why.
Another departure from Estate Agent Street in Puerto Pollensa. Barnard Hamilton’s office has closed. But this is a positive closure. The new one is at the start of the pinewalk. And very impressive it is, too. Very impressive.
A letter to “The Bulletin” sheds some light on the resurfacing of roads. Apparently it has to be done when the weather’s hot - for technical reasons that I don’t need to bother you with. I had kind of thought this might be a factor. Except. Why then do they surface roads when it isn’t hot? Confused? You soon will be.
Which brings me to the quiz. That last line came from a very famous sitcom. What was it? Also, in recognition of Tone’s departure and Gord’s ascent, I’ve wheeled out today’s title. No prizes for knowing D:Ream, but who was number one when Tone became PM first time round. Was it Oasis, R. Kelly or The Spice Girls?
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
Tuesday, June 19, 2007
Whatever You Say, Say Nothing
I have to keep confidences. You would be amazed what people tell me. Or maybe, you wouldn’t be amazed. But I keep schtum. Or at least I can say in general terms. Remember the piece about the property market a few days back?
There is a well-known estate agency hereabouts that is up for sale. Why? Can’t know for sure, but over-stretched, over-ambitious, negative cash flows, these could all be aspects. Or maybe it’s just can’t be bothered any longer.
If it is all the former, then it tells a story. A story about expansion that places profit before cash flow. Beware entrepreneur. Cash flow is the stuff of any good business. But also a story that may be salutary when it comes to the chasing of moolah in the property market. Shake-out time? Maybe. There are two former estate agents along Estate Agent Street in Puerto Pollensa that have “for rent” signs on increasingly decaying shops.
More positive. Opening this evening is the Diablito restaurant in what was the old Nico’s place in Puerto Pollensa. Some might recall Diablito in Puerto Alcúdia’s Alcudiamar, now Chili. Good luck to them.
Quiz: Ok, schtum leads me to today’s title. Which band recorded an album with this title? Again, they have featured here before. Also, what is the origin of “schtum”?
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
There is a well-known estate agency hereabouts that is up for sale. Why? Can’t know for sure, but over-stretched, over-ambitious, negative cash flows, these could all be aspects. Or maybe it’s just can’t be bothered any longer.
If it is all the former, then it tells a story. A story about expansion that places profit before cash flow. Beware entrepreneur. Cash flow is the stuff of any good business. But also a story that may be salutary when it comes to the chasing of moolah in the property market. Shake-out time? Maybe. There are two former estate agents along Estate Agent Street in Puerto Pollensa that have “for rent” signs on increasingly decaying shops.
More positive. Opening this evening is the Diablito restaurant in what was the old Nico’s place in Puerto Pollensa. Some might recall Diablito in Puerto Alcúdia’s Alcudiamar, now Chili. Good luck to them.
Quiz: Ok, schtum leads me to today’s title. Which band recorded an album with this title? Again, they have featured here before. Also, what is the origin of “schtum”?
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
Friday, June 15, 2007
I’m Forever Bursting Bubbles
Has the property bubble in Spain finally burst?
The stock market took a dive a while back as investors sold property stocks in anticipation of an end to the boom. And now it seems as though the harsher realities of the market are about to hit home. I spent some time this morning speaking with some local estate agents. There is some “difficulty” was a comment on more than one occasion. For difficulty, read lack of sales.
Fact is that there is a glut of speculative development, a general view that property is overpriced, some concerns over legalities and also interest-rate rises.
Much of Spain’s recent economic boom has been based on the construction sector. The downturn in the market threatens, it is said, two out of five construction companies. As the boom has lasted, more and more players have come into a market - across the sector - eyeing strong returns. But no boom lasts forever.
Despite this, it is also being said that a drop in prices may not feed through for at least a year if not longer. Perhaps so, but there is one factor that may hasten this. It is not uncommon for people to buy a new house with an existing property (and mortgage) acting as a form of collateral, so to speak. While the intention may be to sell the first property, there has not always been pressure to do so, especially if the market is buoyant and interest rates are reasonable. Take these elements out of the equation, or rather replace them with instability and increased mortgages, and the pressure to sell - at a lower price - becomes a likelihood. It is also the case that consumer debt in Spain is over-leveraged (in other words, people are too stretched, even by comparison with the UK). It may sound remarkable to UK readers who will be aware of the apparently disproportionate house-price to salary ratio, but the ratio of house prices to wages is above that of the UK.
For the potential buyer, therefore, this could all be good news, though the potential volatility - at least in the short term - may mean buyers holding off. Whether this market shift also affects Mallorca as much as the mainland is another question, though - as some estate agents are suggesting - “difficulties” are already in the system.
On the other hand ... Back in 2002 I distinctly recall it being said that prices would come down within a couple of years. It was argued that prices then were inflated, largely as a result of the introduction of the euro. Well, that is no longer an issue, and it could just be that the property market, as then (when prices kept going up), turns out to be more robust than is being suggested. But the euro remains an issue in one very important respect, and this is - arguably - the nub of the whole property story. Spain entered the single currency with an exceptionally low interest rate, which the European Central Bank seems likely to increase. Interest rates have been below inflation rates, thus creating the circumstances for boom.
The Bank of Spain is saying that there will be no crash, placing faith - in part - in the level of immigration to buoy demand. The Bank’s main concern lies with the financing arrangements of the leading construction companies, which also means the lending arrangements of the banks.
Quiz. I’m not letting you off. It’s a great question, yesterday’s, so another day at least ...
PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
N.B. Acknowledgment due to www.ft.com for some information in compiling today’s piece.
The stock market took a dive a while back as investors sold property stocks in anticipation of an end to the boom. And now it seems as though the harsher realities of the market are about to hit home. I spent some time this morning speaking with some local estate agents. There is some “difficulty” was a comment on more than one occasion. For difficulty, read lack of sales.
Fact is that there is a glut of speculative development, a general view that property is overpriced, some concerns over legalities and also interest-rate rises.
Much of Spain’s recent economic boom has been based on the construction sector. The downturn in the market threatens, it is said, two out of five construction companies. As the boom has lasted, more and more players have come into a market - across the sector - eyeing strong returns. But no boom lasts forever.
Despite this, it is also being said that a drop in prices may not feed through for at least a year if not longer. Perhaps so, but there is one factor that may hasten this. It is not uncommon for people to buy a new house with an existing property (and mortgage) acting as a form of collateral, so to speak. While the intention may be to sell the first property, there has not always been pressure to do so, especially if the market is buoyant and interest rates are reasonable. Take these elements out of the equation, or rather replace them with instability and increased mortgages, and the pressure to sell - at a lower price - becomes a likelihood. It is also the case that consumer debt in Spain is over-leveraged (in other words, people are too stretched, even by comparison with the UK). It may sound remarkable to UK readers who will be aware of the apparently disproportionate house-price to salary ratio, but the ratio of house prices to wages is above that of the UK.
For the potential buyer, therefore, this could all be good news, though the potential volatility - at least in the short term - may mean buyers holding off. Whether this market shift also affects Mallorca as much as the mainland is another question, though - as some estate agents are suggesting - “difficulties” are already in the system.
On the other hand ... Back in 2002 I distinctly recall it being said that prices would come down within a couple of years. It was argued that prices then were inflated, largely as a result of the introduction of the euro. Well, that is no longer an issue, and it could just be that the property market, as then (when prices kept going up), turns out to be more robust than is being suggested. But the euro remains an issue in one very important respect, and this is - arguably - the nub of the whole property story. Spain entered the single currency with an exceptionally low interest rate, which the European Central Bank seems likely to increase. Interest rates have been below inflation rates, thus creating the circumstances for boom.
The Bank of Spain is saying that there will be no crash, placing faith - in part - in the level of immigration to buoy demand. The Bank’s main concern lies with the financing arrangements of the leading construction companies, which also means the lending arrangements of the banks.
Quiz. I’m not letting you off. It’s a great question, yesterday’s, so another day at least ...
PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
N.B. Acknowledgment due to www.ft.com for some information in compiling today’s piece.
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