For those of you who are thinking of buying or selling property on Lanzarote, this is the way that I see the situation at the moment.
Obviously, like anywhere else in the Western world, it’s a buyer´s market now. The very cheap properties are very slow to sell from what I hear, and the very expensive properties have the same problem. The only type of property that seems to be holding its value to some degree is the one-bedroom apartment that is front line. While you can pick up a one bedroom apt here in Puerto del Carmen for 90,000 Euros, the location isn’t going to be great for that price but a one-bedroom apt in a very good location on a nice complex can still fetch up to double that.
It seems to me that if you have a very good apartment for under 200,000 Euros, be it one bed or two, you have a reasonable chance of selling. Also, if you have a good small villa in a good location for under 250,000 Euros, you have a good chance. These are the properties that are selling at the moment, if any.
There is some unreal value to be had at the moment with medium to high price properties. Any properties from 400,000 Euros upwards are selling very slow, and the value compared to 2 years ago is unbelievable – and I think they are going to come even cheaper over the next year or two.
The Western world property values are too high everywhere, even still. It seems to me that the US government have put up a trillion Dollars to support the building societies/banks, and all they have done is bailed out the banks, which in turn will keep prices up above their true value. If they let the banks go under then, even though it would be very difficult in the short term, it would lead to a much more realistic market in the long term. Think about it – we have to be competitive against the rest of the World and one of the main reasons that we are not is because people need high salaries to support mortgages for houses that have been artificially pushed up by banks lending too much money to people.
If you look at Eastern European countries that have recently joined the EU you will find that there were no banks there to lend money for properties up to recently. The value of the properties was very low and all of the properties were bought for cash. If the average income in Ireland is something around 30,000 Euros per annum then a young couple would have 60,000 Euros, and if one salary was put aside for 5 years the couple would have saved 150,000 Euros, which should be the price of an average house. That way there are no banks needed (except commercial) and the people working in the banks could be put to use in
manufacturing or exporting industries and, most importantly, the couple would have a debt free life for which they could use their income on a quality of life rather than paying banks. Yes, property would fall harder, but for the generation that are 18 years old now, they would have a fantastic quality of life and we would be back to simple reality.
I think house prices will fall around 20% over the next 2 years, and despite the fact that it’s going to cost me personally, I still believe it’s a step in the right direction and I only hope that governments take action so that this stupid lending can never again take place.
If the banks had never gone into Eastern Europe, prices would have risen anyway when they joined the EU but only because incomes rose, and not because people had access to funds which put ropes around their necks for 30 years.
I can’t understand why everyone is talking about stimulating the building industry as if it’s the most important thing in the World. The truth is we need to stimulate any industry that leads to exports and we can worry about how to spend the income made from that after we have earned it. People tell me every night of the week at Charlie´s that I’m lucky to be living in Lanzarote and to have Charlie´s. Sorry to tell you folks, but that is the height of bullsh*t. *Luck* had nothing to do with it. Here is an expression for you all: The harder I worked, the luckier I got!
Now I’m off to Charlie´s for a nice cool pint of Guinness. Adios. 
