My wife and I are giving Spain a look for our retirement years. Something does not fit, I am reading about these low salaries and then read the real estate column and see what the going price is for houses(chalets) and condos (apartments). If the salaries are that low how are the Spanish people affording those places. Or am I being shown different prices than the price sheet that is being shown a Spaniard? I am reading on the web for real estate along the Med that it is apprieciating at the rate of 15 to 20% per year. Are these places being sold to Spanish or are the people from other countries being gouged? Something truly does not fit with this picture!!! When we were in Spain last year we did not see any indication that people were scratching to get by on 16,000 euros per year. It seemed to me that we were handed the same menu as eveyone else, unless the hotels had Spanish and non Spanish room rates. I know the gas pumps did not seem to differentiate. About the only answer is,there are two separate prices, one for Spaniard and one for the tourist.

Unfortunately we have to pay those prices too. People is increasing their debts. Now it takes 30 years to pay your house's credits instead of 20. That's the way for the people to pay their houses.

The problem is that the whole system will go into a big crash the day credits rise. People will have to sell their mid-payed houses and cancel their credits and the prices will go down quickly. That will make people's savings lower, which will probably drive the country into a crisis.

This may happen or not, but with the current financial policies of our government could happen in two years (according some experts).

Cross your fingers!

Fernando

The thirty year mortgage is a common method of home finance here in EEUU. We also are very accustomed to using credit. However for someone to have an average salary of 16,000 euro and the prices of housing that I have seen advertized in Madrid, and other cities, a person could not qualify for the mortgage. Here in EEUU most families only put down 5% of the purchase price and then some other fees that are required by the lender to make the home purchase that bring the initial out of pocket up to 10% of the purchase price. Then on the more expensive houses they may be required to put down as much as 20%, with additional closing fees. At the salaries you are talking about, and housing prices that I am seeing, I don't see how they would ever save enough to make the initial down payment. I will admitt, that in doing internet research of real estate, that I have seen some true bargains. That has always been on the high end houses and farms. In most cases they freely admitt that the property needs some work to bring it up to modern standards. Are the majority of Spanish people living in rented housing, as opposed to owner occupied housing?

In the UK the price of housing has shot up astronomically in the last few years, initiated by the crazy UK market. Here (unless you are luckily on a high salary) you have no chance of being able to afford a house, even in partnership with another person. For instance you may have a salary of 17000 pounds. A bank will lend you 4 times this for a mortgage - say 68,000. Then you can add 1.5 times your partner's salary - let's say another 25,000, making 95,000 pounds in all. However the starter house you're looking at will cost typically 180,000 pounds. So, no chance. Part of the reason for the increase is that the numbers of young people taking university degrees has gone up (I won't comment here on the debate over dumbing-down worthless degrees). This has increased the rental value that 'buy-to-rent' owners have been able to get from their house, as 4 students in 1 house pay more than a couple renting it out.
One result of the increase in UK house prices is that those who bought more than 8 years ago have the benefit of (unearned) massive increases in the capital value of their property. Many have used this to either sell their property (or take out a second mortgage) and then buy up properties in southern Europe. This has resulted in fuelling the property market in places like southern France, Spain etc....
I understand also that in Spain the property market is distorted by council policy. There is plenty of cheap land that developers could build land on (for example Castilla-La Mancha!) However the councils will only give permission for the services to be connected on more expensive land in the big cities. Perhaps a Spanish contributor could confirm/correct this?

True. Councils use the selling of high value lands in order to finance and pay their investments.

In Spain a high majority of the people live in owned houses. Renting is not common because people think that at least a mortgage (hey, a word I learnt thank to this thread!) allows you to own your house at the end.

Fernando

I am assuming that when you are talking about the services you are talking about electric, phone, gas,and water. These are by private corporation here in the EEUU. They are more than happy to connect you wherever you might be, for a price. Water in the rural areas, is often done by drilling your own well. By council are you speaking of a governmental agnecy? When the governemment enters into it here is to issue the building permit and assure the structure meets building safty standards for the water, electrical, gas, and is not going to fall down on someone. Some areas do not do inspections. I am in the process of building a new house in northern Arizona and the permit is $95 and no inspections by the govenment. My friend is putting an additional room on his house and the permit was$3000, with inspections on every facet of the construction. The difference is my house is about 15 miles from town (25Km) his is in town. Mine is over a 1Km to my nearest neighbor, his is 10 meters. The time it takes to get a permit approved is another variable. Mine took about five minutes. A friend who lives in San Francisco says it takes about three months to get the plans approved and for 250square meter house it would cost about $35,000 for the permit. My plans I drew myself and presented them. His had to have an engineer's approval before the permit approval people would look at them. The reason for the heavy scrutney is population density. My point is, how close do the govenrmental agnecies watch the consruction of housing and other sturctures? Are the utilities provide by private companies or by state owned providers?

All of my Utilities are thru Private Companies, and they are not cheap. I was surprised by a 300 Euro Water bill during the summer(I was watering the grass twice a day). But my utilities even for a fairly large Chalet have been comprable to what I paid in the states for the same utilities. I am sure they have Building Code enforcement people here(Don't know for a fact)but the Pisos and Chalets going up look solidly built. Like I said in a earlier string, they are building like crazy here in Madrid. Traffic is bad enough now but when the 5-10 thousand housing units being built here in Majadahonda are occupied, it is going to be impossible to drive. I am enjoying this weekend(Long holiday weekend here) becasue a LOT of Madridians took a short vacation.

You must take into account that our cities are not like yours in the way people live or the buildings are built.

Even in our smaller cities it is usual for people to live in blocks of buildings (blocks are either residential or for offices, these two types are very very different). In Madrid there are blocks of buildings extremely expensive, and even the cheapest one is usually a good place to live.

Wood houses are unknown. Every building here is built with concrete.

Outside cities there are usually estates with (usually) expensive and exclusive houses which are similar to your house+yard (but build with concrete and bricks).

The land is usually owned by the councils, which is the governatory institution that rules a village/town/city. The councils sell this land to built blocks/houses for a high price (they usually sell only the most expensive of their properties).

Now you have the land, and private corporations build residential (or other types) of blocks (which can be from three stores to twenty usually, depending on how large the town is).

As people don't spread out over a large area of land (population density is much higher in Europe, and Spain people tend to concentrate in urban areas, no matter how large the village/town/city is), utilities are not usually a problem. The time you need it, you have a phone line, water and a power line.

The big problem is that usually the land is very expensive because councils (as I have said), sell it at high prices as a way to finance their investments (in infrastructures like roads, subways, urban constructions,...).

Fernando

When the govt. owned land is sold for development the money that is brought in from the sale goes to one of the State of Arizona's four universities. This is mandated by the state constitution. If the land is owned by a private party it must be developed as to the zoning laws of the area. Many times one can apply to the Planning and Zoning Department for a "Variance" that is the zoning is outdated and needs to be changed. Then they can build something else on their property. When the developer puts in a new "Subdivision" it is his responsiblity to put in all the infrastructure. That is the electric, water, sewers, phone, streets, street lights etc. Then the cost of that is included into the cost of each new house or whatever else he is building. We do a lot of wood construction of houses here and most of them are not built all that well. Your concrete houses and stone will last longer than anything that is built here. Stone is the oldest building material known to man. The second oldest is a material known as "Adobe." That is a mixture of clay and sand. There are adobe houses here in the southwest that are known to be over 500 years old. Those stone house in Europe and the Middle East some of them are older than that. The nice thing about stone and adobe is how well insulated it is. Some of these wooden house when they start to get old they are real cold or hot and down right drafty. Adobe houses are also very expensive. My house is wood frame stucco, and was appriased for $255,000 last year, the same house made of adobe would appraise for approx $550,000.

I don't know what is right or who has the best plans for building housing. All I know is what we have and what I have to live with. I am going to be building my new house in Northen Arizona out of stone, if you are interested Fernando I will send via E mail photos as the house while in progress. The size of the lot is approx. 2 hectars the house will be about 135 square meters. I will be starting in the middle of January.

THAT is an appreciation

Of course I'm interested! I only know a part of the USA and I would be very glad to know from other parts

Oh, guess which language the word adobe come from? Spanish! It is an arabism that was adopted into spanish from Al-Andalus times (700 AC to 1500 AC).

Fernando