Mallorca- Why are there so many half built villas and houses?!

[Tansie]

Curiosity!

We went on holiday to a villa just outside Pollenca a few weeks ago and we had a lovely time- but I am curious to know why there seemed to be so many unfinished then abandoned domestic buildings dotting the derelict fields?

Most looked like they'd been half built then walked away from longer than 5 years ago ( i.e. The Crash) but they weren't tumble down stone built places, ie 19th century farm workers houses or anything, they were concrete built and 'modern' enough looking in style.

Anyone know?

WAS it mass economic strife? Or maybe that the Mallorcans build houses in instalments, like a bit this year, a bit 2 years hence, finished in 7 years?

They started building during the boom when they thought they could sell some of them off before, to pay to complete the build. Then the recession started to hit, and it all went belly up!! Is all over Spain and the islands.

If it's anything like Greece - there's apparently a tax reason - you don't have to pay tax on the building if it's not finished...

So bot, you're saying it was a chain thing, where the cash from completing and selling one went to complete then sell the next etc etc?

Not sure about the tax thing in Spain. I'd be wondering what you achieved- yes, you may pay no tax on the place but it's also uninhabitable!

It's the same on mainland Spain as well!

The property crash, and there being no Monet to finish the building, but as already mentioned, I think its all over the med-we were told it in Malta, unfinished buildings have no tax liability. Also in Malta the family Ogden communally own a plot of land and do what they can with the money available.then save a bit more and adds a bit.

We were in Spain before this property crash and there were half built properties then. Apparently some are like it from previous property crashes.

What Doradoo said- it's tp avoid property completion tax!

Theas- some autocorrects going on there... 'Ogden'???

But, why would you half build a property, then effectively leave it derelict? These aren't houses anyone could live in; the padlocks on the wonky gates have rusted, the driveways are a mess of weeds, the orchard is barren and unkempt.

What would anyone stand to gain from that? You've paid for the place to be 2/3 built, but you or anyone else couldn't live in it, and you'd not get a return on your outlay if you tried to sell it on in that condition. It'd cost thousands to return the building site to the condition you left it in when you walked off it 5 years ago!

I'm not sure whether the same tax rules apply in spain as in Greece, but certainly in greece they will finish a building just to the point of being perfectly habitable, but with half a roof missing over a self contained room or annexe that no-one uses, so as to avoid paying any taxes on it as it is still a 'work in progress'! They then live in it for years and years and just ignore the unfinished wing!

It is,also very likely that many of these sites have been reposessed by the banks. They were handing out money to developers left right and centre. There are a few restaurants like this near to where i live, and I am shocked that the banks seem to let them fall into disrepair.
One bar had a collapsed roof on the outdoor patio area, and the bank left it for months, it was clearly very dangerous, and looked dreadful. It was only after months of other local businesses complaining that they came and demolished the roof.

It's like this in Ireland too! It's all due to the bust. All these were apartments/houses meant to be bought off the plans. I actually live in a lovely new development/village on the outskirts of Dublin city and about 20% of the buildings are just shells (ie unfinished). There are big fields too that were meant to be developed into more properties - where I live would have been TWICE as big if it had all gone ahead!

All repossessed and being processed through the "bad bank" NAMA here.

I think you'll find that these ghost estates/developments exist everywhere that got a bailout ie property market was allowed to get way WAY too overheated.

Feel sort of sorry for people who own properties in my development. Properties are now worth 40% of what they were when they were built. Same trend all over Dublin. helloooo negative equity....

Zara I remember a poster coming on here once to say how fed up she was living in Ireland and she was thinking of moving to the UK so she could use the NHS, as doctor's bills were so expensive there. She was saying that she and her husband had massive negative equity on their house since the property crash and so they couldn't sell it and she was wanting to know if they would be given housing here if they just left the house in Ireland empty, or some similar plan.

It turned out she and her husband were only about 27 or so, with three kids, the eldest was born when she was still in her late teens as I recall. They had borrowed money to build their own 4 bed detached house when they were only about 21 and it had all gone wrong, they had not been able to finish it off as they'd hoped, and could not sell it.

Although it's very sad, I cannot conceive of a situation where lending possibly as much as 95% or 100%of the cost of a substantial housebuild project to a couple so very young, and where one was a SAHM was EVER going to be anything other than a potential disaster.

I agree fellatio - the lending was bonkers and I don't know if people who overextended themselves actually understand that no matter what the climate/govt encouragement was, it's really stupid to get yourselves into such high levels of debt. There's a big perception here that the banks are just going to have to write off the debt - I don't know if that's realistic. It's very interesting to see it all unfold (well only really if you're not affected by it, like DH and I are! We're happy with our cheap rent!).

Before we moved here (for my husband's work), my DH used to visit Dublin at lot for work and other projects. A friend of a colleague in 2006 was buying a 2 bd apartment way out in a new development on the outskirts of the city - and he was paying over ?500k! When my DH expressed shock at this price, the guy said smugly "well that's just what Dublin's worth". Said fellow got a bit put out when DH's immediate reaction was laugh out loud. I think DH said something alone the lines of "it's Dublin, not Malibu mate". Anyway this guy still owns his apartment..... in a half-finished development (nowhere near as nice as the one we live in) in the sticks essentially.

Stupid government policies but also very very stupid attitude from a large proportion of the population. Latest figures show that over 50% of mortgages are in negative equity.

This is going to take around 10 years to properly unravel. The latest thing that people are upset about here is that they're introducing property/council rates and water charges... they're complaining about an initial flat annual fee of ?100 (until a proper property rating system is in place). Some people are in for a big shock...!! When I say I feel "sort of" sorry for people I guess I'm being quite generous. I don't have a lot of sympathy, TBH. And I say that as someone whose parents were very fiscally irresponsible so I understand the delusion that leads to overextending yourself on mortgage debt.

BTW I would agree with her that doctor's bills ARE ridiculous here - ?60 a visit (that's for kids or adults!). Beggars belief

Oh and fellatio never mind abandoning Ireland to come and use the NHS/UK social services - lots of people are leaving so they can bankrupt themselves more easily . Widely known/reported on in Ireland (for people with big/developer debts as well as ordinary people), but only mentioned once in UK media >> Guardian article here

Bloody Hell!

TBH, that general attitude, the 'it's not my fault', kind of reveals why countries like Ireland, Greece, Spain etc are in such a deep financial hole, doesn't it?

I read about a Greek bloke who works in the EU in Germany and a typical conversation he had in a cab from the Greek airport to his home on a visit. The taxi driven launched into a full litany of complaint about the bastard Germans holding the Greeks by the throat etc etc, upping taxes, cutting public spending. The EU bloke asked the taxi driver if he paid his taxes. The driver looked askance at the merest suggestion that he should actually pay tax on his income! Was the EU bloke mad?!

And...

Is it just me who's made any connection between the months and months of summer holiday PIIGS school children seem to get (on another thread, one woman said her DC, in Italy, had 3 months off in the summer...) and the state of their economies?

Tansie it's hard to know exactly what the real link between all the PIIGS countries are and social expectations/similarities. Certainly I find living here people are very focused on lifestyle, government has a responsibility to give you a certain level of income etc etc. Also government is very VERY corrupt. To a stomach-churning, banana republic level. Westminster comes across as robustly transparent and refreshing by comparison.

Anyway, at least in relation to property I think a big factor here is the Irish obsession with property. People say the UK has an obsession with property but it's nothing like it is here. It doesn't matter if it's a crappy overvalued terrace house in a crappy part of the country... it's LAND! You'll own your own LAND! It's only with the recession that the stigma has been taken out of renting.

Even if I won Euromillions, no way no how would I buy property in Ireland...! Not now, not in 10 years!

Interesting to hear about corruption in Ireland. That is not something I have heard about before.

I remember a great T-shirt slogan I saw in Ireland: "Been there, done that, bought the Taoiseach" .....

stubbornstains

A really good read to understand the Celtic Tiger, what went wrong, how corrupt Ireland is >> Ship Of Fools by Fintan O'Toole (deputy editor of the main broadsheet here). Exceptionally well-written and clear.

(sticks it on list)