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[EP8] La Piedra Podcast - Spanish Election Special with Mark Stücklin & Sean Woolley

[EP8] La Piedra Podcast - Spanish Election Special with Mark Stücklin & Sean Woolley

The 8th episode of “La Piedra”, Cloud Nine Spain Managing Director Sean Woolley and Mark Stücklin (Spanish Property Insight) tackle the hot topic of Spanish politics in line with the recent general elections and offer their view on how this might affect the real estate industry.

Listen to podcast the version here

Link to the YouTube video here

Sean Woolley:  Hello, everybody. I’m Sean Woolley, managing director of Cloud Nine Spain. We’re a real estate company based down here on the Costa del Sol. And with me, as always, on La Piedra Podcast, I have Mark Stucklin from the Spanish Property Insight. And Mark is the go-to guy for anything to do with Spanish property, data, and analysis. Hello, Mark. Nice to have you along. It’s been a little bit of a hot one, as most of Southern Europe has been baking in the heat wave. Everyone’s probably seen it on the news. I guess, has that affected you being in the North of Spain, or not so much?


Mark Stuklin:  So far it’s been a really pleasant summer. I know I’ve seen the news, and you were telling me just now that it’s actually quite unpleasantly hot down there. But up here it’s absolutely perfect. There’s the odd day if there’s no sea breeze, ’cause we are right on the coast, and there’s a few hills around here. And if there’s a pleasant breeze, which it has been the last two days, it’s not at all stifling. No aircon, perfectly pleasant, so we’re doing okay.


Sean Woolley:  You’re doing very well. Because I’ve got, at night my partner doesn’t like the aircon, so I’ve got two fans, not even one, I’ve got two fans directed at me, because it’s been a little bit stifling. Temperatures have risen to the highest I’ve seen here for 20 odd years, mid 40s, which is like, oh, Jesus. At night it’s been about 30 degrees, so it’s been a little bit uncomfortable. We had a little bit of respite a few days ago, everyone thought, oh, a normal summer, but yeah, it’s just heating back up again. I’ve just been out actually at a couple of meetings, and it’s grey skies and quite humid, which is not typical of this coastline. Normally if it’s hot, we get quite a dry heat, which I can tolerate. It’s when it gets humid, and you just step outside, and you start dripping, it’s a bit uncomfortable.


Mark Stuklin:  Yes, I can imagine.


Sean Woolley:  But anyway, moving on from weather, we had the little matter of a general election a couple of weeks ago, which we kind of previewed in our last episode, and it hasn’t really taken us any further forward, has it?


Mark Stuklin:  No, so we had this general election, it was completely inconclusive, no clear winner, the expectations that the centre right party, the PP, might get an absolute majority turned out to be somewhat unrealistic. And even with the coalition with the further right party, called Vox, there’s no chance of them, between the two of them, forming a coalition government with an absolute majority. So whatever government comes out of these general elections will have to make a parliamentary majority for inauguration, for getting the government off the ground. And that’s impossible basically with the PP and Vox, because everyone else, they’ve really isolated the nationalists, both centre right or centre left, regardless of which way they lean ideologically, these two parties have completely isolated the Catalan and Basque nationalist parties. And it’s impossible to form a government now in Spain, it’s now becoming clear that it’s impossible to form a government without them. So I guess what we’ll have is two possibilities. One is the current coalition will stitch together another parliamentary majority, but it’ll be even more unstable than it was last time. Or there’ll be fresh elections.


Sean Woolley:  And okay, yeah, I’ve been reading about it as well. I think you are probably more clued up on it than I am, but do you think we’re heading for another election end of the year?


Mark Stuklin:  I mean, the irony, the Gods they are mischievous indeed, they’ve given the key to the heart of the Spanish government to this character called Carles Puigdemont, who’s a Catalan nationalist, he’s quite fanatical, and he’s hiding, he’s a fugitive of Spanish justice in Waterloo for his part in staging, or his key role in this illegal referendum and unilateral declaration of independence, this is back in 2017, I think.


Sean Woolley:  You probably hang out with more Spanish people than I do. Generally speaking, are the Spanish just fed up with this now? Or do they want some resolution, whatever it is? Or do you still have these two factions just going at it?


Mark Stuklin:  It’s definitely more realistic and it’s cooled down, because it was very emotional, and the scenes that we saw back then were quite, well, just unsettling. And they certainly unsettled, I mean, ’cause I’ve been doing some research recently looking at the comparative fortunes in housing market between Barcelona and Madrid, and the Barcelona’s recovery after the financial crisis and the big crash of 2010 onwards, and Barcelona really came out of it much quicker than Madrid and that’s how you saw transactions and prices rising much faster in Barcelona than Madrid. And then Madrid starts catching up, but then hits this Catalan independence crisis, and conflict, and Barcelona in particular, but the whole of Catalonia just starts trending down. Really, there’s no collapse, but there’s a big decline in sales and prices following that. And really in Barcelona since peaking I think second quarter of 2017, or was it 2016, my memory’s right. It was since that referendum and all the Covid cases, everything’s just been, it went down and it sort of very depressed, it was a sort of depressed or lacklustre market with either falling prices, or stagnant or falling transactions and prices whilst everywhere else was doing fine until early 2019. And then along came Covid and pushed everyone down. And in the wake of the pandemic things have been recovering, and people have kind of forgotten about the whole independence. But it really did have an impact, there was a negative impact on the economy, on just rubbing along, everyone getting along. So now there’s a no possibility of a centre right, the only possibility that I can see, I mean, just looks absolutely blindingly obvious that the only possibility is a coalition led by the socialists in coalition with the very hard left, and some really unsavoury groups in the regions like the Bildu party, EH Bildu which are kind of post ETA kind of hard left nationalist group, that kind of thing. It doesn’t look good.


Sean Woolley:  No, it doesn’t. So this kind of hiatus that we’ve got at the moment, where obviously no one party can take over or control, what does that mean for property buyers and sellers here? Anything or nothing?


Mark Stuklin:  What’ll happen is whether there’s fresh elections, which won’t really change anything, I doubt, although the politicians and parties will be raring, thinking if we go another election, how will we benefit or lose out in that process? So that’s all they’ll be thinking about at this stage. I guess that one way or another, we are going to have the same government in power, and that’s led by the socialists, and they are the kind of adults in the room


, although they passed some very damaging laws, especially on the housing front, that would delay the housing law, which I think we might have mentioned it last time in Barcelona for example, there’s no more rental. The rental market’s completely, the long-term rental market is completely seized up. And that’s terrible, that’s just a disaster. But for most people, in most areas, it actually has zero impact apart from the sort of, Spain needs to be well governed to be a prosperous country, ’cause that benefits everyone. If you invest in the country, you want to invest in a prospering country with a good future. We’re part of the European Union, there’s limits on how crazy governments can be within the European Union. And I think it really makes absolutely very little, for the housing market of the kind of people that might be listening to us, that kind of buyers and sellers in the segments that might be listening to us, I think it makes kind of almost no difference at all.


Sean Woolley:  It interesting, isn’t it? Because in each of the sort of major countries like the UK, the US, France, even Germany, Spain, Italy, there’s been transitions either in the recent past or on the horizon politically. But like you said, nothing really changes. People will still make a decision whether they want to be there or not, or buy property there or not, no matter whether the government is on the right or the left of the centre, or even far right, or far left, life goes on, doesn’t it? And it goes on, and we just get on with it.


Mark Stuklin:  It turns out as you get older you realise that your life isn’t actually that long, and you’ve got to make decisions before too long. And so people just have to, well, I can’t wait around for this. I think it does make a difference at the margin, things like political instability. People say, well, I’ll just wait and see, I’ll wait and see six months. Or I’ll wait two or three months, just see how this settles down. And that can slow down things. That can definitely take the wind out of the market sail. And when things are looking hunky dory, and everyone’s piling in, sometimes it’s not a bad thing to have people being cautious and taking things slowly, and doing their research. It’s even so in your area, and I know in the areas like the Balearics, Barcelona, Costa Brava, there’s basically a shortage of, there’s more demand than supply.


Sean Woolley:  Yeah, absolutely. Which brings us onto our next topic, which is the summer, and August in particular, because having worked in real estate for 21 years, 22 years, there’s a common-


Mark Stuklin:  Now it shows on your face, the lines in your face.


Sean Woolley:  Oh, Mark, that’s so unkind. I don’t need this piece every month. But there’s always talk of, oh, why don’t you take August off? ‘Cause nothing ever happens. And I know you wanted to bring it up, didn’t you? About this-


Mark Stuklin:  Yeah, I’m very curious.


Sean Woolley:  I think it’s certainly a Southern European tradition that August you kind of close your office, you lock up and you leave the city where you are working, whether it’s Madrid, or Barcelona, or Seville, or somewhere like that, and you head you head for the beach, and you hang out on the beach with your family and your loved ones, and then you go back at the end of August and you open up again. And I think that’s still true to this day, ’cause I’ve just tried to make a notary appointment for next week in Marbella. No chance. It’s just not happening. And I know that there’s one on-call notary who’s handling the work of three or four. So things do grind to a halt in terms of the judiciary, in terms of bureaucracy. It’s hard to get anything done in August. But of course, the sort of dichotomy of that is that there’s hundreds of thousands of people here who wouldn’t necessarily be here any other time of the year. We’ve got flights coming in, if you look at Flight Tracker and Flightradar, I’m sure it’s the same going into Barcelona and Palma de Mallorca. The queues of planes about to land at Malaga. So there’s hundreds of thousands of people here, most of them enjoying a holiday, but there’s also a lot of people who are combining that with looking at properties, but they can’t get a huge amount done because lawyers are on holiday, notaries are on holiday, public buildings are shut. So a bit like you, we still have to keep going, we still have to show people around. And August, it’s a weird one, people say, oh, the quality of clients in August isn’t very good and they’re only-


Mark Stuklin:  That’s what I’ve heard, yeah.


Sean Woolley:  Yeah, they just want a day off the beach ’cause they’re too hot and bothered and they’ve got sunburn. And I think we have to give them a little bit more credit. I’m sure that that does happen, I’m sure if people are distracted, but maybe it’s a cloudy day, and they want to go and have a look at some properties, I’m sure that happens all over the world. But here I think people kind of know what they want, it’s a much more researched market, so the people who are asking for appointments and viewings, I think we have to give them the benefit of the doubt that they are serious. What I would say is that in July and August we get a huge amount of people inquiring, mainly because they’re here, and they see things, and they want to inquire about them, but also people who want to look at properties. So we have to service that. And some of those people can be what we used to call time wasters, but amongst all of those people there are some real gold nuggets. And you have to remember, a lot of the Middle Eastern clients come in August to escape the heat of their home countries, and they are traditionally a very strong buyer group here. You’ve also got a lot of people from far afield. So for instance, the States and Canada whose only real time to come here is the summer holidays. It’s a long way, and people need to plan, and people need to spend a bit more time here than just the odd weekend. So you get clients from further afield who tend to be good-quality clients because they’re putting some time aside to look at property. So yeah, you have to be quite experienced from a purely sort of agent making money perspective, you have to sift through the debris, and all the sort of the wheat and the chaff, and you have to kind of get to those really good clients. ‘Cause you can waste an awful lot of time backing the wrong horse. Have your wits about-


Mark Stuklin:  So I guess it’s like in August the qualifying challenge is most acute because there’s so many people there who are just on holiday, and they get a chance to be like on A Place In The Sun, they go and


 see, look around properties whilst on holiday, but they might not be very serious. They might be kind of, it’s a fantasy more than a reality.


Sean Woolley:  Exactly.


Mark Stuklin:  I guess in February the people that are there to see houses are really there to see houses.


Sean Woolley:  Absolutely, and the other complication is there’s not a lot of stock available, certainly resale stock to show people in July and August, ’cause a lot of it is rented out, or being used by the owners themselves. So people come here and they expect to see lots and lots of resale properties, and often we’re struggling to get into them, and we have to say, sorry, that’s rented out, sorry, that’s rented out. sorry, the owners are here, blah, blah, blah. Personally, if it was me coming to look at properties, I wouldn’t come in July and August, because I think it’s too hot, we have a lot of clients coming to us, they want to spend three days with us and we’re like, no, it’s not going to happen, because at the moment particularly, it’s just too hot and sweaty, and it’s bad enough for them, it’s bad for our staff because they’re having to go around looking fairly smart, bless them, and they’re driving in air conditioned comfort, but it’s hard, it’s really hard work. So we tend to limit our tours to half a day each. But yeah, so we do get clients sort of demanding to see things and we have to temper their ambition, and we also have to be honest about access to stock and say, look, why don’t we have a look at a few things, but come back in September when there’s more things to see and we can take a closer look.


Mark Stuklin:  How do August compare to other months in terms of sales contracts?


Sean Woolley:  It’s a complete mixture. Honestly, and that’s why it’s so difficult to plan the business, because one year you might have a crazy August, I mean, we did our biggest ever deal in August, and that was a guy who inquired on a Friday night for a development starting at a million euros, and my lead handler worked with him, it was a guy from Saudi, worked with him over the weekend preparing things to send to him. And anyway, it turned out he had a budget of much, much more than that. And he ended up actually, he was here, he was staying in Marbella Club, and he went out on the Monday and saw two villas that he’d been sent by my colleague over the weekend, and he ended up buying one. And so that’s what can happen. You just never know. And I always say to my staff, when we get an inquiry through, I still get excited, a new inquiry, and it could be a complete waste of our time, or it could be an amazing client that we forge a long-term relationship with that buys a multi-million euro property. You just never know. And you have to give every inquiry the same care, and consideration, and time, and then just work it out as you go along. But July and August, if I had a choice, I’ll be honest with you, if I had a choice, I would close the office up, I would go to the UK for six weeks. ‘Cause I don’t really enjoy the summer here. I find it a bit too hot, too many people. So when September comes, I’m like, I feel like, I know it’s really stupid and selfish, but I feel like I’ve got my coastline back. But we have to keep on working. Now having said all that, of course, we still get, as I said, the notaries are off, lawyers are off, and we still get agents who say, ah, we are not working in August. So you try and book a property viewing with them, and they’re like, no, we’re on holiday, we’re on the beach. And they don’t have anyone to cover. So that’s it, that’s a lost opportunity if there ever was one. And then you think, who’s got it right? Who’s got it wrong? We’re here. Yeah, absolutely.


Mark Stuklin:  And this is what the Spanish tend to do, isn’t it? The Spanish, the summer and the beach are sacrosanct, and they’ve got busy lives and jobs in the cities, they don’t even think twice about, as I said at the start, they don’t think twice about just shutting up shop, heading for the beach, and it can wait. But I guess the problem we have is we’re dealing with a multinational audience, and we have to service those clients. If we don’t, somebody else will. And everybody’s trying to earn a living, make money, so someone has to do it. And that’s-


Sean Woolley:  Yeah, that makes sense that, as you said, there are some people for whom, some types of clients, especially if you’re in the international sector, that come over only in August, and therefore it’s critical for them and for those types of market segments for you to be operating in August, there’s long-haul Americans, Canadians really the summer and July, August is the only time they can come, and people from the Middle East get escaping the heat, and being over like a good time for them. But then there’s more people from closer to home who might be just time wasters, or just curious, or tyre kickers not really serious. And therefore August can be, it’s more challenging month by the sounds of things than other months of the year.


Sean Woolley:  Definitely, because you have that bigger volume, which is stressful in itself, and particularly in the heat. So experienced real estate agents will quickly understand who the genuine buyers are, and who the ones are that can wait. I often say to people, look, just give people time, sit down, have a coffee with them, work out where they’re heading. I mean, we’ve got a situation tomorrow where we’ve got a client seeing one of my colleagues, it’s a referral client, but the budget is very, very low. And we could be wasting three or four days on someone who can just about afford that budget. And in the meantime my colleague isn’t going to get access to any other clients, ’cause they’re going to be out that one, and they may miss out on a 10-million-euro La Zagaleta client. And I’ve said that to her. I said, you are spending three days with that one, you ain’t going to be getting access to any others. So we have to weigh up how we spend our time, and how efficient or how productive we are, which is all important, we can run around the coast up and down, all day every day, with the wrong people. But you have to ask a client, are you in a position to buy? And if they’re not, it has to be, okay, well what do you want to achieve this trip? And if they say, well, we’d like to see 50 properties so we can do our research, you have to take a view and say, well, actually we haven’t got the time or the resources to be showing you


 50 properties, we’ll show you five. But we’ll show you the best five, and if you don’t like those, maybe this isn’t the right place for you.


Mark Stuklin:  Yeah, and then there’s also the risk that they do like them, and they don’t actually have the budget for the kind of properties that they do like, and you don’t find out till later on that it was all a waste of time. But there’s no way to protect yourself from these time wasters, is there? It’s just part of the job.


Sean Woolley:  No, and it’s not unique to Spain, is it? It’s not unique to Spain at all. But it is quite an intense experience because of the heat and the working hours. And yeah, we have to make sure that we keep our team motivated and healthy. I always say, if you want a half-decent property, you have to do your homework. I know people will go and buy an off-plan property off someone on the beach, or buy something that they’ve seen on the way back to the airport, they just walk in and go and buy a house, and good luck to them. And they’ll be happy with it. But if you want a half-decent property and you want to make sure you’re making a good investment, you have to be prepared to work hard for it. And you have to be prepared to put in a little bit of time and effort. And not everyone is prepared to do that, and I get that, but if you don’t do that, then you have to accept that you may not get what you’re after. And that is a hard thing for people to accept. And they do come here and think, oh, well, we’ll go and see 30 properties and we’ll just find the one we want. It’s not that easy.


Mark Stuklin:  And do you think it’s harder in August to get what you want? Because, as you were saying, the supply is limited, ’cause the Spanish are at the beach, the agents are at the beach, all that kind of thing. Is it actually harder to get what you want in August?


Sean Woolley:  Yeah, I think it is, because you have limited resources to call upon. I think September is a much more productive month for that reason, ’cause everybody’s back. Not just the guys who’ve been away in August, but the locals as well, and the kids are back at school. But yeah, so it’s a lot easier to get around, it’s a lot easier to get in to see properties. And I think the best, I don’t know, how many inquiries you get from people saying, oh, I’m coming to Spain next week, I’d like to see some properties. And it’s just, we get that all the time. And I’m thinking, you need to give us more time, you need to let us know now, and give us some dates. ‘Cause if you think you’re just going to be able to rock up and see everything, you’re going to be really disappointed. But I think it’s a great, it’s a very interesting time. And it’s a great opportunity for some of our clients to do their homework, to start doing their research, and to start having a look at what is available. But they have to be prepared to put some time in and work hard for it. But yeah, it is a bit frustrating. But then at the end of August, I’ll be honest with you, I can’t wait for the cooler weather to come. I find the summer here really hard work. And I love the coast, but I don’t like the summer. I’m a bit strange. But yeah, it’s a bit of a challenge. It’s been a good month so far, we’re only halfway through. And we’re still busy, and we’re still getting deals done, and people are still making inquiries. So it hasn’t really stopped, and I think a lot of people think, oh, no one’s around in August, I can’t do anything, but actually that’s not true at all. There’s plenty of people here. And there’s plenty of people who want to do business. So it’s an interesting one, and it’s an interesting debate. And I think we’ve got to the bottom of that one, Mark.


Mark Stuklin:  Yeah, I think it sounds like you have. It’s a great month, it’s a challenging month, a busy month, not a very good month, probably a month that you could do without if you could wave a magic wand and change the world, but you can’t. And so you have to get on with it, and do the best you can.


Sean Woolley:  Absolutely. Good stuff. Well, listen, we’re going to take a short break, and we’re going to be back in a couple of minutes, and we’re going to talk about a slightly different subject, something we’ve talked about before, but it’s come back to the fore, and it’s about exit taxes in Spain. We’ll be back in two. Thanks, Mark.

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