We are back in London from the SIMA property show in Madrid, which is the biggest property event in Spain. Putting things together from the show (interviews, meetings, contacts) and having recovered from the excellent time and laughter that we had with real people in Madrid, the reality slaps us in the face.
Nobody can say that The Spanish Brick looks at the market with pessimism after our last article about Spanish property, but the reality is that the crisis still remains.
Pressure to sell during the show
The pressure to sell brought to the show discounts in the form of money off VAT (the developer pays the VAT) and free notary fees, for instance.
These tricks to sell are because the market is not really doing well according to the last official figure from the Ministry of Public Work: in Q1/2011 a total of 74,540 properties were sold. This means 50% less properties than during the previous quarter (Q4/2010) and 30.4% less than Q1/2010.
According to property experts in Spain, it means that the market adjustment will take longer than expected and prices will continue to fall. In fact, the latest report from the Bank of Spain is that property prices will be still falling for two more years.
Sima show: Banks repossessed on the spot
So, professionals are going to work very hard to make their sales. We give credit to the professionals in Spain and to the professional trend of the market. This year we have seen a more professional SIMA show with less marketing expenditure and more focused on offers and sales which means that the market is coming back to its reality.
The Banks coped with the attention of the public, offering finance to their assets. But their prices are still expensive, which is balanced with mortgage lending to home buyers.
Unfortunately, we did not see many rental opportunities in Spain at the show… despite the fact that the market trend is to rent. Therefore, we must conclude that the Sima show is a home-buyers show for first and second residence opportunities and a huge offer in the great Madrid.