Bone-dry plot with no water listed at €90,000: the investment nobody wants
5,000 m² of dry, unirrigated land with no water or electricity in Alicante, Spain, was listed at €75,000 and, failing to sell, raised to €90,000. Its real value is under €3,000.
English · Original discussion in Spanish · Published
Bone-dry plot with no water listed at €90,000: the investment nobody wants
How much would you pay for half a hectare of dry scrubland in Alicante, Spain, with no possibility of building, no water or electricity connection, and not even a fence? €75,000, according to a listing that circulated on Idealista. The surprise came when, unable to find a buyer, the owner raised the price to €90,000. The "safe investment" label in the original listing did not match the reality of the rural plot: 5,000 square metres of scrubland with no services.
The gulf between the asking price and market value
The numbers speak for themselves. A similar rural plot, undeveloped and without water, has a market value of around €3,000, according to estimates from industry experts. The gap is enormous: the owner is asking 30 times more. The most generous explanation is the endowment effect —overvaluing what you own— but the reality of the property market is stubborn. Meanwhile, in public auctions held by the Spanish state and Social Security, plots of 3,000 square metres can be found for as little as €1,000. One documented example: a buyer acquired a plot of that size for that price in a sealed-bid auction with only three bidders.
What can you do with land like this?
The options are limited. As it is under 10,000 square metres, planning regulations prohibit any construction, even agricultural dwellings. The only possible uses are dryland farming —with the added cost of hauling water in by tanker— or goat pasture. The return is nil. As an alternative, for €10,000 more you can buy hunting reserves in Teruel with 21 hectares, a spring included and the possibility of building 100 square metres.
With these figures, the question is inevitable: why raise the price of something that will not sell? Perhaps the strategy is that of a huckster: inflate it, then apply an apparent discount. Or maybe it is simply the disconnect between what a property is worth and what its owner believes it is worth. The market, for now, responds with silence. And meanwhile, the parched plot keeps waiting for anyone willing to pay €90,000 for a handful of goats.
How much would you pay for half a hectare of dry scrubland in Alicante, Spain, with no possibility of building, no water or electricity connection, and not even a fence? €75,000, according to a listing that circulated on Idealista. The surprise came when, unable to find a buyer, the owner raised the price to €90,000. The "safe investment" label in the original listing did not match the reality of the rural plot: 5,000 square metres of scrubland with no services.
The gulf between the asking price and market value
The numbers speak for themselves. A similar rural plot, undeveloped and without water, has a market value of around €3,000, according to estimates from industry experts. The gap is enormous: the owner is asking 30 times more. The most generous explanation is the endowment effect —overvaluing what you own— but the reality of the property market is stubborn. Meanwhile, in public auctions held by the Spanish state and Social Security, plots of 3,000 square metres can be found for as little as €1,000. One documented example: a buyer acquired a plot of that size for that price in a sealed-bid auction with only three bidders.
What can you do with land like this?
The options are limited. As it is under 10,000 square metres, planning regulations prohibit any construction, even agricultural dwellings. The only possible uses are dryland farming —with the added cost of hauling water in by tanker— or goat pasture. The return is nil. As an alternative, for €10,000 more you can buy hunting reserves in Teruel with 21 hectares, a spring included and the possibility of building 100 square metres.
With these figures, the question is inevitable: why raise the price of something that will not sell? Perhaps the strategy is that of a huckster: inflate it, then apply an apparent discount. Or maybe it is simply the disconnect between what a property is worth and what its owner believes it is worth. The market, for now, responds with silence. And meanwhile, the parched plot keeps waiting for anyone willing to pay €90,000 for a handful of goats.
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Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (43 replies).
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