Inquiring minds are once again gaziing at Spain and her problems. This time it involves both high end real estate and pensions:
Seven years ago, Marian Henderson moved to the south of Spain with £1million in her pocket.
But when – or perhaps that should be if – she finally makes it back to Britain, she will be lucky to do so with one quarter of that sum.
She’s no spendthrift – the money she has lost has been on bricks and mortar.
Her home, a beautiful four-bedroom country house surrounded by orange groves, a swimming pool and stables, was once valued at £725,000. Today, it is on the market for just under £270,000.
‘I have cut the price as much as I can,’ says Marian, 62, who put the property up for sale shortly before her husband John died in 2007.
‘But it doesn’t seem to have made any difference. I am desperate to leave Spain, to get out of here. But the market has totally collapsed, and until I can sell my house, I cannot afford to leave.
Ms. Henderson says she can hardly afford to live. That she is surviving on the basic state pension and barely has enough to eat, let alone go out. She told the interviewer that she can go three or four days without speaking to another person.
The properties in which these British ex-patriots invested have fallen in value by as much as 50 per cent in the past four years.
This is due to massive over-building by the Spanish government – where estimates show there are 700,000 of unsold newly built homes across the country. And of these, 400,000 are on the coast with the vast majority in the south of Spain where many British ex-patriots bought properties. Take into account that there are an equal number of older homes being advertised for sale, and it is completely clear why experts are predicting prices to fall, on average, another 20 per cent over the next five years.
The actual issue that no one seems to be want to discuss is that of demographics. Specifically, the extremely low birthrate that Spain (and Europe overall) has experienced for decades. Remember that Spain’s birthrate is approximately 1.12.
Most people know that a stable birthrate is somewhere around 2.1. What most don’t understand is just how low 1.12 birthrate is. Quite simply, if this rate keeps up, in 35 years Spain will lose 52% of its population. To put this problem in the most simple terms possible: Too many people are dying and not enough people are being born.
Spain has reached this crisis first because Spain has the lowest birthrate in Europe. Other European countries are closing fast. Italy has a birthrate of 1.2 and then there are many countries with a 1.3 birthrate.
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