Cloudnine Spain Blog

[Ep1] La Piedra with Mark Stücklin & Sean Woolley

[Ep1] La Piedra with Mark Stücklin & Sean Woolley

The first in a new monthly series of podcasts featuring Cloud Nine Spain Managing Director Sean Woolley and Mark Stücklin (Spanish Property Insight) discussing the Spanish property market from different perspectives. Sean will be coming at it more from an anecdotal, evidential point of view in terms of what’s happening in Marbella on the ground, and Mark, with his years of experience of data collection and seeing what’s happening from the data side of things Mark is very well known as one of the leading voices in the Spanish property arena and is one of the authorities in the industry, often quoted by the media.

Listen to the podcast version here

Link to the youtube video here

Sean: Hello everybody, it’s Sean Woolley here from Cloud Nine Spain. With me today, I am honoured and delighted to have Mark Stücklin from Spanish Property Insight. Now Mark, if you haven’t heard of him already, is very well known as one of the leading voices in the Spanish property arena. He is one of the authorities in the industry, he’s often quoted by all the popular media, so, you know, if you read the Sunday Times, I’m sure he will have come across Mark and seen some of his columns. And what we’re trying to do here is just to create a monthly regular get-together where we can talk about the Spanish property market from different perspectives. I’ll be coming at it more from an anecdotal, evidential point of view in terms of what’s happening here on the ground, but Mark, with his years of experience of data collection and seeing what’s happening from the data side of things, it’ll be really interesting to see if his version of the Spanish market marries up to what we’re seeing on the ground. So, welcome along, Mark. Sorry about the long-winded introduction, but it’s great to have you along for the first of what I hope will be many regular discussions and chats and debates, God knows what we’ll end up doing, but thank you for being here. So tell me a little bit about you and your background with Spanish property, ’cause you are in Barcelona, aren’t you? And I’m down in, in Marbella, so already we’re sort of both ends of the Spanish mainland.

Mark: Yeah, two ends of the spectrum. I came to Spain to do an MBA, which is what brought me to Barcelona, and I met my future wife on that course, and I then stayed put in Barcelona after graduating because it’s a very nice city to live in. And my wife was here and we considered moving, following jobs to other cities, but it never happened. So I stayed put, and this must’ve been, I graduated in 2000. The Spanish property boom was just really kicking off at that time. It went on until about 2006, and it was, in retrospect, turned out to be a massive bubble. But there was, because it was a growth business, and my past had been in Havana cigars, which had been a growth business until about the 1998 when I left to do an MBA. But I was also looking for ways to, to open up alternative career paths outside of the tobacco business ’cause I didn’t see it as a very long-term good bet. I think I was wrong in some respects, but anyway. There was a boom boom business in Spain, a lot of foreigners were buying property on the Costas, the Brits were very dominant back then. The data, such as there is, for foreign demand going back as far as before 2000 is pretty sketchy. And, but I did get data on it that I still have, but I’m not sure, I can’t now find that data again in the usual data sets that like the, the databases of the land registry or the notaries or the government, wherever I got it from originally, I can’t find it again, but it looked like, you know, British demand was, was 50% of the market, and it was very, very dominant. 50% of the foreign foreign, which goes to show there were a lot of, and it wasn’t just the Brits, it was a boom, it was a full, a boom in full swing. Especially there was an off-plan kind of business going on and some estate agents catering to that foreign demand, especially on the Costa del Sol and the Costa Blanca, some made a lot of money in that period, I mean, huge amounts of money. It was just like the Wild West and it was, it was insane. And it was a bubble and it all came crashing down. I don’t know if you remember that period, Sean, I don’t know when you started off in business?

Sean: Yeah, I did. Well, I came over here in 2001, so I escaped the UK. So similar timing to you and I, I didn’t really know what I was gonna do. So I fell into Real Estate and worked for one of the big companies, you may remember Viva Estates, so I worked for them for a little time and then I, like a lot of entrepreneurs, I just thought, hang on, I can do this myself. And so yeah, we started Cloud Nine, I think in 2002 was the first year we operated, and we also were involved in the, you know, the selling of off-plan properties and it was a bubble. At the time, of course, you never realize it is. And it was a lot of British and Irish, particularly buyers, the Irish particularly were buying to flip, so buying speculatively and trading on the increase in prices before completion and then selling them. But of course, you know, that did come to an end.

Mark: It’s actually the subject of an entire session.

Sean: Yeah, it is!

Mark: To go back, and look at what was going on then and analyze it and the way it unfolded and what were, you know, what the different motivations for different groups in that, in the industry at the time and what became of different, I mean, at the time I was writing a column in the Sunday Times called the “Spanish Property Doctor,” and I didn’t just look at the Costa del Sol and the Costa Blanca, I was also dealing with the Costa Brava, Barcelona, you know, it was a more, had a broader viewpoint than people maybe just working in an industry in a sector in a specific territory. But a few on, in a few articles, I touched on what was going on and I also wrote about it in my own blog. And before long I was getting, I had several very kind of heavy threatening emails from legal teams like attack dogs, in the UK. So threatening me with legal action, and so, you know, you have to take care, but it just, that’s just a symptom of what a time it was.

Sean: Yeah, I think when we all look back, I mean it was the start of all the cheap airlines, wasn’t it, like easyJet and Ryan Air, and you know, everybody, the world was in a good place, everyone was earning money and everybody wanted that little piece of real estate in Spain, didn’t they? And who can blame them? And I think that, you know, in particular, the TV shows, you know. Yeah, yeah.

Mark: It’s like dozens of them, different, well, there was a handful on both terrestrial and like cable channels.

Sean: Yes.

Mark: And all selling the dream.

Sean: Yes.

Mark: It was sort of like lots of things came together, like you said, cheap travel. The introduction of the Euro had brought down the seeming currency risk and was bringing down interest rates, the Internet making all sorts of new lifestyles possible.

Sean: Yeah.

Mark: I think there’s a demographic story there as well, about you know, the baby boomers coming, retiring, approaching retirement and looking, thinking about their future, and maybe a nice little, nice place in Spain for them, come out here with one of these inspection trips and end up buying three, two to flip and one to keep, get it free. You know, they’ve just got talked into doing things.

Sean: Yeah.

Mark: So, it’s true, isn’t it? I mean, obviously the market then reached a point, it fell off a cliff, didn’t it? Just almost overnight, really. When the shutters came down on the banks and we had the global sort of financial crisis, people just couldn’t access funding, the demand for luxury purchases like a second home just collapsed overnight, and we were left with, with the market crashing, effectively, I think it did in a lot of places worldwide, but particularly in a second home market like the Costas. So when did you start collating data and what is the, you know, what is the reason behind it?

Sean: Well, so I, like I said, I was doing an MBA and then I left and I was looking around for something to do and there was this booming real estate industry. And I applied for a few jobs with different companies, that I saw job openings and job adverts for, this is in Barcelona, for real estate companies. And that got me interested in the real estate sector in Spain. And I then joined a startup that was marketing new developments in Spain. It was a great experience, but it was very badly, the strategy wasn’t very good, you know, we were up in Barcelona trying to market new projects, in Barcelona at the time there was very little foreign demand and there was no industry, so to speak, for foreign, you know, there is now, but there wasn’t at the time. And so we were trying to compete with the likes of, you know, Viva, Cloud Nine, and selling from Barcelona and without really the know-how, how to do it. And certainly not the temperament to do, be able to do it, But I turned out to be quite good at marketing, as in, I got lots of PR and articles, ’cause that was sort of, had some background in that from my previous life. And then I left that and what I could clearly see from that experience, which only lasted a few months, was that there was no data, there were lots of people buying and lots of claims being made, lots of sales, sales claims about where prices are going, where, you know, where volumes were going, a lot of the future based on, none of us unfortunately can see where we, you know, have the crystal ball, but you can distort your projections for the future based on how you interpret the past. And it was clear that there was just absolutely, I mean certainly not in English, any information available to people who were looking to buy in Spain about the basic stuff like, you know, what historically or in the recent quarters or whatever period you’re looking at, what are the trends?

Mark: Yeah.

Sean: So, and also not just what are the trends, but also what are the costs, what are the pitfalls, what are the risks? But done from a non-sales perspective, not actually trying to sell, I mean I was trying to, I was looking for a business model for, so I left that company and I set up “Spanish Property Insight,” which is the website that I had running since then, since 2003, I think. And the idea was to provide good quality information, reliable information in English, both on costs, risks, issues to, you know, and the process to make it easier for people to get that right, and data. But the business model was always in trouble, because how do you get people to pay for that?

Sean: Yeah, and I guess, I guess because you’re not coming at it from a sales angle, you know, you’re not trying to flog houses or apartments, I guess that’s why you’ve become the, the darling of the media, if you like, they always come to you for a soundbite or a quote or a piece of data because they know that there’s no ulterior motive.

Mark: Yeah, well, they like an independent voice, they like voices, they like, I mean, I know this because I’ve spent, one of my hats Is a journalist, I wrote for the Sunday Times, and I write for my own blog and for other publications as well, always on the subject of just the Spanish property and the Spanish property market and journalists, so I’m sometimes in the market for a good voice. I’m trying to make a point and you want to illustrate it and it’s nice to have it presented and given like a personal kind of touch if it’s spoken through someone who knows what they’re talking about. So you’re quoting someone and that’s what they like. And so that definitely helped me get a lot of PR, also, I just happen to have a lot of data. And that’s another thing that journalists like.

Sean: And you know, in terms of the data, obviously if you’re sitting in the UK, and you’re looking at maybe making a purchase in a town or a city, you can access so much data, can’t you? You can go onto a couple of websites and before you know it, you’ve found out what that particular property has sold for over the last 20, 30 years, you can, you can see all the historical data of the property, the street it’s on, the area it’s in, the county, it’s incredible, but I guess there’s none of that here in Spain, is there?

Mark: Yes, That’s the thing. So anyway, I mean, what I, just to rewind a little bit and then address the point of what data is there, what’s it good for, how do you get it, who’s using it? Over the years, the business model didn’t really work. I mean, at the beginning in the boom years I had some advertisers, the developers, and that was, that was perfectly reasonable, it worked quite well. But then the crash came along and all the advertisers dried up. So I then turned to consulting, which was advising the banks and the funds that were trying to restructure on how, what, what to do with these repossessed assets of theirs. But lastly, I’ve been focusing really just on data and content that’s of value to people, whether they are buyers, owners, sellers, or especially in the industry. It’s like what information is valuable to those different groups, and both as data that you could process and use in charts and tables, but also in the analysis of that data. Which brings me to the present day and what data there is in Spain compared to other countries. Like you said, in the UK and in the US and other markets, it’s very easy to go online and find exactly, like you said, comparables, specific comparables, so that you can see, I’m looking at, I’m interested in this property and I want to know what’s sold around this property in the vicinity, you can set vicinity to one kilometre, two kilometres to whatever. And then you get the history of sales, which then, you know, no two properties are exactly the same. But you get a very, it’s very useful for giving both buyers and sellers and agents, everyone in the, you know, all the actors in the game an idea of where prices really are. And that’s the one thing. So now when people, back in those days when we were both getting going, there wasn’t much data and certainly not in English. Now there’s a lot more, and some of it’s actually been quite good, unfortunately, it’s inaccessible. You have to go to different websites where they may or probably don’t offer a version in English. And when it is in English, the translation is quite, you know, interesting. And then the format, the way that you have to extract the data is never user friendly, that’s what I can say for sure about the different databases online in Spain, whether it be the government, the notaries, the registries, they don’t make it easy for you to extract the information. And so that’s what I do, I get all the information from all the public databases, and there’s actually quite a lot of good, very good information out there. But the one thing there isn’t, you don’t have, is the comparables, the sales comparables, which is almost like the anchor. In every deal, everyone wants to know that, buyers want to know that they’re not overpaying, vendors want to know that they’re not underpricing, agents wanna, the most reasonable market price to make a sale happen quickly. And when you, I mean I’ve seen this in some areas that I’ve analysed where, everyone’s lost. There’s like, there’s no anchor. everyone’s at sea. The buyers can’t just don’t, they think the prices, they see properties hanging on the market for ages and not selling and the price is not really going down. So that’s, that says, tells ’em one thing, that there’s no, there’s no kind of liquidity and there’s no movement. And, and vendors on the other hand, they go online, they have to reach a decision on how to go to market, at what price to go to market. And they’ll talk to agents, I’m sure, and I’ll tell you how I see it, and then you tell me how you see it. That they, you know, they, what do I sell for? So they go online and they look at the portals. Well, they’re only ever looking at asking prices, because that’s all there is available. We don’t have sales prices.

Sean: Exactly.

Mark: So they see, you know, the guy down the road’s asking, I don’t know, 500,000, my property’s nicer than that. Of course it is, everyone’s always got a nicer property, so let’s make it 520 or something. And buyers likewise are just seeing asking prices. They don’t know the actual sales prices. You know, what’s the closing price? They just don’t know. And vendors, at least they’ve got an estate agent, they’ve got their own data from their own sales. But you know, sometimes they don’t have enough sales data and current sales data to be able to really know what the, you know, you need to be a big agent with lots of deals and lots of transactions to be able to get a good feeling for a specific type of property in a specific area. What is actually the market price which you then adjust for each individual property’s characteristics. So that’s the one thing I think that makes buyers very nervous. ‘Cause they really don’t know if they’re being, if the asking price is reasonable, ’cause they’ve got no comparable, and it encourages vendors to ask too much because unrealistic expectations. And I guess it leaves you guys in the middle trying to try make sense of all of that. How do you see it?

Sean: It does, you’re exactly right. You know, there is nowhere to hang your hat. It’s, a lot of it is gut feel, a lot of it is greed and fear, and where you are positioned within that, that matrix. We often get buyers, particularly buyers who are used to that access to data, who come along and say, right, sure, what’s this really worth? It’s worth whatever you or somebody like you is prepared to pay. That’s the bottom line. And which is a horrible thing to have to say because you should be able to say, hang on, well that one sold for that, that one sold for that.

Mark: Yeah.

Sean: And I think as an estate agent with experience here, we can, we can rely on that, stuff that’s happened during our work over the last couple of decades. We can understand that, okay, that sold, forget the asking price, that sold for 500,000, so this one, yep, slightly better, slightly worse, whatever we can, we can then pitch it correctly. But I don’t know how new agents, you know, new to the market who has just landed here from, you know, planet Zonk or whatever, I don’t know how they cope, because they haven’t got that years of experience to say, you know, okay, well that’s sold in 2012 for this and then it’s sold again in 2015. Very often if I’m picking up a new listing and I’m not quite sure of myself in terms of where to pitch something, I’ll phone an agent who I know have specialized in that area or sold a few properties in that development over the last few years. I pick up the phone and say, you know, Jim, Jenny, you know what, what do you think, I’m about to take this on? Do you have any guidelines? And I think it’s vital to be able to have that, you know, support of your fellow agents and your collaborators so that you don’t over or under pitch things. ‘Cause that can create carnage. I mean we’ve got situations at the moment I know I’ve been pretty vocal on our videos about, there’s two or three agents out there who are, I think, creating this bubble at the high end of the market in Marbella where they’re almost, I can almost imagine ’em sitting around a table just almost putting figures into a bowl and just drawing them out and saying, “Yeah, we’ll, you know, we’ll ask for this”, where it’s not based on a per square metre price, it’s not based on the location price, it’s just what they think they can sell it for. And it’s a crazy way of doing it. But you know, that’s what’s happening.

Mark: Yes, I’ve heard about that. You know, in areas where there is an, let’s say an ultra high end, which is in Marbella, a little bit in the North Costa Blanca and then in Barcelona and some parts of the Costa Brava, and the Balearics, especially the Balearics.

Sean: Yeah.

Mark: There’s large parts of the rest of Spain, that just isn’t this ultra high end market. And Madrid, of course. So I’ve heard that, you know, that I’ve heard agents complaining that people put unrealistic prices on, you know, you hear 70 million, 50 million. I mean I’ve seen them, and they’re always jumped on by the press as well.

Sean: Yeah.

Mark: It’s like, “Wow!”, you know, ’cause it’s like property porn or sort of sensationalist.

Sean: It is, yeah.

Mark: And then, you then never hear what it actually sold for, and it probably sold for like a 50% discount on the announced go-to-market price. And which then, so that just distorts people’s expectations, it distorts vendors’ expectations, it distorts estate agents’, who also, you know, until you get the final price,

Sean: Yeah.

Mark: And asking, At that end, it’s crazy.

Sean: And that’s the problem, isn’t it? Is how do we find the sold prices, because obviously we’ve got the advertised prices, they’re all over people’s websites and portals and god knows where. But is there a way that you can access the data to see what those sold prices are, and how do we then marry them up to what the asking price was? And ’cause it’d be fascinating to see what the differential is. I’m sure it varies month to month, year to year, you know, we’ve just, post-Covid, we’ve been very, very busy, we’ve had that sort of pent-up demand of people coming over here and we’ve actually got a lot of deals away at asking price or even slightly above if it’s got to an auction situation, which is unheard of really. But then other years where it’s been a little slower, obviously the asking price has been lower and substantially lower.

Mark: The discount, what I call the negotiated discount.

Sean: Yeah, yeah, exactly, that’s the term. So how do we, how do we find the sold prices? Can we do that?

Mark: No, so this is the problem, you know, well, the notaries and also the registrars, I mean the notaries do know the declared deed price. As you may remember 20 years ago, there used to be a big, it was much more common to find a portion like a, they used to pay for a percentage of the deal of the, of the declared, the final price, in not the declared price, the final price, in cash under the table.

Sean: Yeah.

Mark: It was called, it was called “B money”, it was called “black money”, under the table, undeclared payments. And it used to be, especially, I mean, you don’t get that when you’re buying off-plan new builds, although I guess it was possible, but generally speaking, the off-plan, well, the under construction or new, where you’re dealing with a professional vendor, which is a developer or resales from private vendors. And on the resales and private vendors, which is the biggest share of the market. It was common 20 years ago, and it had been common for decades beforehand in Spain, common practice that, you know, to pay in cash for undeclared, let’s say 2010, between 10 and 30 or even more percent, and that cash was kind of kept under the mattress. And what was the benefit? Well, it just reduced, because the transaction prices, transaction costs are quite high in Spain, both taxes and, and like, you know, notary fees and registry fees and stamp duty, that all sort of stuff just reduces that, and capital gains as well.

Sean: Yeah, yeah.

Mark: And I don’t know what percentage, and I haven’t ever seen an estimate of the percentage of deeds of sales per year, back in let’s say 1999, that had a cash handover, but I guess it would’ve been, you know, 50%.

Sean: Yeah, I would’ve thought so, I would’ve thought so. And of course, that’s fine as a model, although it’s illegal, it’s fine as a model if it carries on. But of course, what’s happened over the last 10 years, it’s just gone, isn’t it? Those cash deals are gone.

Mark: I mean I’d say it’s almost disappeared. Once again, I don’t have any data, but I think it used to be very common, the notary used to get up and leave the room, and the buyers and sellers and out would come the cash. Now it’s just, I was talking to a notary friend, he says, no, it just doesn’t happen anymore. Which is not to say it never happens.

Sean: Yeah, exactly.

Mark: But it is far, far less common. So that means that the deeds’ price is actually a reliable guide to the sales price, whereas it didn’t used to be, it might be 10, 20, 30% under the real price. So nowadays the notaries have, let’s just assume there’s like 100% of sales are now, you know, fully declared on the price. And that goes into the deeds and that goes into the notary’s database, which has a lot of information, it’s very complete, but it doesn’t get, and then it goes to the land registry, but it’s never published, that it’s never available to be searched as a database in the way that we’ve talked about earlier, like for comparables, it sounds extremely valuable and it would do a huge amount of good to the market by bringing it much more down to reality. It’s the lack of information and lack of sales comparables, which allows things like bubbles to inflate or which makes the ups and downs of the cycle more acute.

Sean: Absolutely, absolutely.

Mark: So apparently I’ve talked to the notaries and the registrars, it’s something to do with data protection laws in Spain that the government doesn’t allow it. And this is a real shame because it would be doing, it would just increase confidence and transparency in the market, makes people more, it just increases the market in general.

Sean: Absolutely.

Mark: Makes the market more efficient.

Sean: You’ve given me a little sneak preview in the last couple of weeks of your amazing data center, which collates all this information, doesn’t it? And you know, you can then go into different things like areas and types of property and buyer demographic. It’s absolutely fascinating and incredibly useful for someone like me. How useful do you think that would be for a buyer or a seller? What can a buyer or a seller do to improve their position and knowledge when it comes to data?

Mark: Well, I think until now it was difficult. There’s a few, I mean, some estate agents and some portals do collect data and interpret it, but at the end of the day, it’s, you know, done for their agenda, it’s there to support their own agenda, everyone knows that, and you absolutely can’t blame them for it. And so what I’ve gone and done, and it’s taken six months now, but I’ll have it ready, I’ll launch it next week or the week after, is to gather in all the, so I’ve gone to, not all but most of the public data. There is a lot of public data, it comes from the government, the housing department, which is within this ministry that’s called MITMA, used to be Fomento, it’s now called MITMA, which is the Ministry of Transport and Urban Agenda and something like that. Then you get it from the notaries and the land registry. Then you have regional governments like the Junta de Andalucia or the Generalitat in Catalonia, and they all produce a certain level of data. And then you get the municipal level, you get the town halls, which small town halls I don’t think, but you know, Marbella Town Hall has a data section. And so what I’m doing is I’m going to all of these different places and just to get public data and then bringing it, but they’re all kind of tricky and fiddly. And so I’ve standardized them all into standardized tables, which make it easy to work with and easy to compare. I’m only bringing together public data and I’m adding value by bringing it all together and making it standardized and giving good graphics. You said earlier that it would be very useful for people in the industry and I believe it should be because in order to know where the market’s headed, you know, you have to have the basics, the sales trend, the price trend, the new supply trend, the mortgage financing trend, the foreign demand, just the basic trends is useful to have at your fingertips and also in order to talk to your clients, because how many clients do you ever deal with who want to know what the market, what the trends are, that you can then back up with the data?

Sean: Every single one of them. And you know, it’s always-

Mark: Maybe onto something?

Sean: Yeah, exactly. And that’s what’s always been frustrating. You may have seen myself and Alfredo, we do normally a quarterly kind of market update. And it’s based on, as I say, it’s based on anecdotal evidence, it’s based on, a lot of it is gut feeling, a lot of it is obviously related to us, and what I’m hearing about the market in general in this little area. And so it’s very difficult to say, and that is backed up by the data, showing that over the last three months or 12 months this has been happening. So, you know, when I say that of our last 26 sales, 22 have been to North Americans,

Mark: Mm-hmm.

Sean: where does that come from? You know, is it just because the exchange rate is in their favor or is there an underlying trend there that goes back maybe to last year or the year before? So it would be great to be able to confidently talk to a client and give them that anecdotal stuff, which is not, which is not incorrect, it’s just a feel for the market, which I think is very useful. But to have that as well as the data that’s been collated by someone like yourself who knows what they’re doing and how to do that, would be incredibly powerful. We get asked every day by clients, you know, what’s been happening in the market, who’s buying, what’s happening with prices? And of course the big question, what is going to happen? And that’s the one we can’t answer. But, you know, I think like you said, if you can give people that knowledge of the trends and what has been happening and who is buying and why they’re buying and a lot of this, there’s always a myriad of reasons, you know, there’s the post-Covid effect, there’s the lifestyle changes, there’s the home working element now, there’s the Brexit has played a part, you know, all these things are kind of all jumbled up and they all play a part. But to be able to actually see the data and then talk to a client about what you’re feeling on the ground would be incredibly powerful, I think.

Mark: I’m now gonna spend much more time analyzing the data and actually, and we can discuss these, this analysis in sessions like this, but I’m gonna do a written analysis of what’s going on in specific markets and I’ll be consulting people on the ground like you, about how are you seeing this data that I’m seeing? How’s that showing up at the coal face?

Sean: Exactly. It’s really interesting, isn’t it? Because again, there’s lots of different types of buyers in the mix here. Obviously, you’ve got your Spanish domestic market, and then when you get into the tourist areas, you’ve got what can be predominantly a second home market. I know that in Marbella, obviously there’s a domestic market and Spanish people looking to buy and rent, but there’s also a large second home buyer market, and people buying second homes have different aspirations and different thoughts and different, you know, ways that they’re gonna use the property. So I don’t know if your data would-

Mark: Yeah.

Sean: I don’t know if your data would allow those differences to be shown, because that’s always been the problem, isn’t it? That people regard, you know, like the Marbella market, if they see a report saying that, oh, the Spanish housing market is in trouble, actually, like Marbella, Costa del Sol, it’s a bubble within the Spanish housing market, and it doesn’t have the same form.

Mark: It’s just really a completely different segment, like this when in, even in the crash, like the Spanish property, so when the bubble burst in sort of, it started deflating in 1990, in 2006, but the real kind of ugly, brutal crunch, didn’t come immediately, but you know, I mean, new building, so housing fell off a cliff in 2009, in 2008, 2000, and the industry, the building industry, the home building industry in Spain declined by 97%. I mean, you know, it almost disappeared.

Sean: God.

Mark: Dramatic. But in, you know, take a place like Formentera, in the Balearics, there was no crisis whatsoever. There was just more demand than there was, more people trying to buy than sellers.

Sean: Yeah.

Mark: Like, you know, it has been for, you know, decades. And so even the brutal crash played out differently in different segments and different regions. And so it’s really useful to have a segmented analysis, which is what I’m very much focusing on. I’m not just gonna like, I don’t like that, in fact, the way that the housing data is reported in the Spanish press is unhelpful. They never give any context, or any…

Sean: No

Mark: And because the government and the road notaries and the registrars and some private companies all publish their own housing market data, like the big picture, and they do it, some do it quarterly, some do it monthly, and like for example, notaries who publish the most timely data, although their database is actually terrible to try and extract information from, but they do it monthly and it’s referring to sales that they witnessed in the month. And it might, what they’ve done, they’ve just released in, here we are in November, they’ve just released September. But the registrars are talking about, they do it quarterly and it’s about deeds that were inscribed in the land registry, in the registry in that period, which is not the same as sales at all, so…

Sean: No, no.

Mark: So the government is based on user’s evaluations, I mean, so they’re all using different methodologies and different preparing to different timeframes, but it’s all reported in the press. You might hear one week it says sales boomed in September or something, and the next week it sales crashed in September. There’s actually no, no context whatsoever. And I think it’s useful to have a national picture, you can see, well, Spain, it’s good to have that picture, prices and, and sales volumes. But the real story is the segmented are the segmentations because everyone at the end of the day is buying in a certain segment and they wanna know what’s happening in that segment. So yeah, I definitely spend a lot of time looking at how to segment the data.

Sean: We’re going to be looking, listeners and viewers, we’re gonna be looking at a lot of these different segments over the forthcoming months. We’re gonna be, there’s so many things we can look at, we can look at the effects of different things that have happened, COVID, Brexit, lots of different things I’m sure that we’ll be discussing over the forthcoming months. But I just wanted to ask you one final question before we leave things for today, having given people a little taste of what’s to come and how we’re gonna be trying to get to grips with this market. All the data that you are collating and the data that we as property professionals can use to talk about the past and how the market has developed, can we use that to say to people how it’s gonna head forward, you know, where it’s all heading? Do you think the data is reliable when looking to the future? Or can it only really be used to look at the past?

Mark: For a lot of the time the trends are quite predictable, but then they suddenly change. And so we don’t know when, I mean, for example, the home sales in Spain, it was a surprise to see the boom that came after the pandemic. I was genuinely surprised, especially in this, in the second home market. And it’s been astonishing how strong, I mean, demand, there’s been record foreign demand since the travel restrictions eased, it’s been hitting new, you know, not quite back, I told you at the start, at the beginning, I mentioned the beginning, there was this, like, there’s data going back to the two early 2000s, which I can’t, I haven’t yet had time, I’m sure I’ll get to it someday, but where foreign demand was much bigger was higher than it is today. And the Brits were very, very dominant. But it’s been, on any record going back to 2007, I think you know, foreign demand in 2021 and in the first half of this year is selling, is selling records, contemporary history, and that took me by surprise. But you can see that this year, the trend is clearly as the year starting, as the year’s progressed, the sales growth has been steadily declining. It went from 36% sales growth in January, that’s overall, all segments, the whole market combined, down to 0.8% in September. So we don’t know, you know, in October, I’m not expecting price to see sales growth of 50%. It’s easy to say, well, it’s gonna be around 0%, might be probably even, I would bet, I would bet it’s gonna be negative. So negative sales, so it’s useful, you know, we don’t know what’s gonna happen for sure, but the trends can be quite good at guiding you to draw conclusions, which is what you in the industry, to give your clients good advice on. Well, you know, where are we, are we in a bubble or are we in a steady market, or are we in a slightly declining market, and how to pricing decisions to make and how to approach negotiation, that’s all useful. So even though we don’t know what’s gonna happen tomorrow, that can help guide the decisions you make, always bearing in mind that what might happen tomorrow is, you know, a complete surprise or a Black Swan or something like that.

Sean: Exactly. And who could have predicted Brexit, Covid, war in Ukraine, all those things, the Kwasi Kwarteng mini-budget, so,

Mark: Yeah.

Sean: there’s lots of different things that are causing these trends to either continue or to be broken. But it’s fascinating, fascinating talking to you, Mark. And thank you so much for making the time. I know you’re a busy guy, you’ve got a lot on your plate at the moment. So thank you for taking the time to talk with me today. And I hope this is something that we can really get stuck into over the coming months, and we can start looking at these almost itemized things within the market in general, because I know that we’re gonna get a lot of feedback from our listeners and viewers, and they’re gonna be asking lots of questions, you know, ask Mark about this, ask Mark about that. So prepare yourself, sir, for some difficult questions.

Mark: Well, I’m just looking at the data all day, but I think it’ll be very interesting to look at different segments.

Sean: Yeah.

Mark: And then compare and contrast sort of what I see in the data and what you see at the, at the, Front Line

Sean: Exactly. And between the two of us, hopefully, we’ll, we’ll be able to, to point clients in the right direction, even if it’s not the direction they thought they were gonna go in. But, you know, at the end of the day, as long as we can be open, transparent, use the data that’s there and guide people, that will be, I think a job well done. Thank you, Mark. Thanks for coming on and I will see you hopefully next month.

Mark: Very good. I look forward to it. Take care.

Sean and Mark: Bye bye.

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