Monthly Archives: April 2009

Investment in Eastern Europe slows, creating opportunities for Tenerife

April 29, 2009 – 10:08 am
Tenerife prime property considerations for the future

Investment in Tenerife prime property. A consideration for the future?

Recorded property investment turnover in Central and Eastern Europe slowed further in the first quarter of this year with volumes now at levels seen earlier in the decade.

Levels were at approximately £196 million, a third of the volume transacted in the last quarter of 2008, according to the latest report from CB Richard Ellis. But there is optimism, with several areas now showing many property bargains, Tenerife being one.

Lack of liquidity is having an impact on every property investment market in Europe and is therefore profoundly affecting transaction numbers.

The majority of all CEE investment activity in the first three months of 2009 was in Russia. Ironically Russans are now buying property in Tenerife as they recognise its value and potential.

Lack of transparency is making it difficult to measure the markets. There is evidence to suggest that the more challenging conditions in Eastern Europe are impacting on market transparency, making it more difficult to measure investment volumes accurately.

But looking ahead there is optimism in the markets. What some of the low European investment volumes do not show is the considerable pipeline activity in some of the core markets in Europe. Several high quality assets are currently on the radar of institutional investors in the region and this ensures that Tenerife property is extremely good value and should now again be considered as a solid medium to long term investment.

In the remainder of 2009 the trading of a limited number of good quality schemes is expected to result in an upward trend in investment volumes. Whilst  fewer foreign investors are on the lookout, foreign purchasers have driven investments in property in Europe, usually accounting for more than 80 per cent of all volume. But uncertainty about pricing and an inability to obtain financing have now forced many foreign buyers to the sidelines, the report concludes. So, if you have some money it is probably worthwhile considering some prime property in Tenerife as an alternative to that 1% interest on your cash on Bank deposit if you have an eye to the future!

By Angela | Posted in Economy, General, Miscellaneous Articles, Property, Tenerife, Things to Do | Tagged , , , , , | Comments (0)

Figures show demand still strong but prospective buyers are belt-tightening

April 27, 2009 – 6:10 pm

Market data from Taylor Woodrow de España provides an insight into how demand for holiday homes in Spain is changing, and how the Spanish property market is being affected by the economic crisis.The data is based on more than 5,500 enquiries at the developer’s Spanish property website during 2008. A shift in the pattern of the needs and wants of house hunters in search of a home in Spain and the Canaries shows a change in budgets, along with changes in the number of bedrooms required, the type of properties sought and in the reasons for purchasing a home in Spain and the Canary Islands. Analysing the budgets available to potential purchasers reveals a marked shift in 2008 towards properties at the lower end of the market. Over two thirds of all enquiries now coming from properties below €250,000. In particular the share of enquiries relating to properties in the €150,000-€250,000 price bands has risen from a 35% share in 2007 to 67% in 2008. Although the price bands are changing, the overall volume of enquiries still remains strong.Consumers have been  forced to look at their budgets and unsurprisingly the lower priced houses in our selection became more popular as house hunters looked to bag a bargain overseas. Whilst the credit crunch has dealt a heavy blow to house hunters, rather than delaying their home owning dreams in the sun they are merely reassessing their budgets and looking for cheaper alternatives.

Owning a ‘holiday home or 2nd residence’ is still the primary reason for consumers looking to buy in Spain with 55% of enquirers citing this as their core motivation. However those seeking a permanent move to Spain, i.e. seeking ‘a primary home’, rose sharply as a percentage of enquirers, taking a 23% share in 2008 as opposed to 12% in 2007. The English weather throughout 2008 was pretty poor, especially in terms of the ‘blink and you miss it’ English Summer. This  is one of the major contributing factors to the significant rise in enquiries for both first homes and holiday homes. Additionally, with the fast accent of technology, more individuals are able to dictate where they work making location less of a major factor and increasing the practically of living in Spain. Also, fast communication links to the UK help to ease travel worries. This has definitely increased the interest in purchasing a home in Spain for the purpose of a first residence as buyers can experience the best of both worlds.”


2 bedroom homes still dominate the market with 57% of all 2008 enquirers looking for homes of this size. This is a 7.5% rise from 2007 when 53% was recorded. Individuals looking for a ‘3 bedroom home’ decreased during 2008 with 40% recorded in 2008, ‘more than 3 bedrooms’ also took a drop with only 1% of enquiries during 2008 in search of additional room. Victor comments: “Two and three bedroom properties have always been the most popular request from our prospective customers due to the flexibility they provide for individuals, couples and families. However, the gap between requests for 2 and 3 bedroom homes during 2008 increased by 17%. Again this may be attributed towards the current climate because, whereas individuals may have normally strived for a 3 bedroom home, they are now willing to compromise and lose a little bit of space in order to still achieve the dream of owning a home in Spain.”

When looking at the types of properties preferred, apartments had a clear majority with 66% of enquirers looking for a simple apartment. Penthouses came second with 18% and semi-detached homes third with 7%. Surprisingly, detached houses/villas only had 2% interest, which clearly demonstrates the current desire for no-fuss properties in Spain. With the majority of our purchasers looking for a holiday home or second residence the desire for a secure, no hassle property that can allow people to ‘lock up and leave’ is usually high up on the wish-list. An apartment, penthouse or duplex can provide this lifestyle and give purchasers the space and
facilities they require.

Breaking down the enquiries according to age groups, the highest rise was seen in the ‘30-45 years’ category with 44% of enquiries in 2008 belonging to this age group, compared with 35% in 2007. ‘46-55 years’ took the biggest hit with the group being responsible for 27% of enquiries in 2008 as opposed to 33% in 2007. ’56-65 years’ also experienced a drop moving from 22% to 20%. ‘Under 30 years’ and ‘over 65 years’ remained stable.


People aged 30 to 45 years once again held onto the majority share with continued optimism when it comes down to purchasing a home in Spain. Whilst Spain appeals to a broad range of people, this age group may particularly be drawn to the country due to its close proximity to the UK, good investment opportunity and its family orientated focus, making it an ideal vacation destination for the school holidays. The older age groups reduced their share, one of the major forces for this may be the continuing pressure of external forces causing people to ’tighten their belts’ in the current environment.

 

In many instances, people’s hobbies dictate the choice of location for their property abroad. Whilst golfing is still the most popular pastime of prospective purchasers of Taylor Woodrow de España properties, other hobbies are starting to gather momentum. Hill walking made the biggest jump going from 6% in 2007 to 17% in 2008, a rise of 145%. Tennis also experienced an increase from 4% to 7%. Whilst, golf dropped its share by 12%, with 67% reported in 2007 going down to 59% in 2008. Nautical hobbies also lost share going from 20% in 2007 to 15% in 2008. Victor comments: “Many of our developments are located close to or on the site of a golf course to satisfy the demand for this past time. However, we have been finding that more family friendly activities such as tennis and hill walking have been growing in popularity. Consequently, we continue to ensure that we build our developments in appropriate locations so couples and families can easily take advantage of the local scenery and facilities on offer.”


Despite the doom and gloom throughout 2008, Spain has been voted one of the ‘top 5 best tourist destinations’ and as such remains a firm favourite for both holidays and purchasing property. Indeed, the continuing popularity of this country helps ensure that property purchased in Spain will always hold its long term value. Especially with the current climate, purchasers looking to invest abroad can take advantage of good prices currently on offer. Finally, combine this with the fact that interest rates are currently at their lowest ever, now is surely a prime time to invest.

By Angela | Posted in Economy, General, Holiday, Property, Tenerife, Things to Do | Tagged , , , , , , , , , , , , , , , , , , , , , , , | Comments (0)

Feeling the pain in Spain and taking positive action

April 27, 2009 – 10:02 am
Be positive in Tenerife's difficult financial times

Be positive in Tenerife's difficult housing market

An increasing number of Brits who have bought Spanish holiday homes are struggling to meet their monthly mortgage payments, law firm DWF has warned…Higher mortgage interest rates in the Eurozone and the weak pound have been brought to bear on many borrowers who are looking for advice on how to cope with their escalating Spanish mortgages, the firm says.

In Spain mortgage interest rates have gone from 2.5 per cent to five per cent.

Antonio Guillén, a Spanish lawyer with DWF’s Manchester office, says that if a property is repossessed and the outstanding mortgage is not covered the lender could issue proceedings in the UK to recoup the money owed.

He says, “The borrower could also be put on a register of bad debtors and be blacklisted in Spain for six years.

“This may not worry UK residents who decide to leave Spain.

“But Spanish lenders are fully aware of the importance of credit ratings in the UK and are now exploring ways to pass on information to UK databases.”

Options for home owners unable to make payments on their Spanish properties include renting them out, extending the mortgage term or remortgaging.

There is also a ‘dación en pago’ option where the property is transferred to the bank in lieu of the outstanding mortgage.

Whatever the situation, handing in the keys and simply walking away is one of the worst things you can do. It’s worth exploring the options as a rash decision could come back to haunt you at a later date. It is simply better looking around and finding a reputable estate agent who can give you ideas on renting out your property and reducing your overheads at this difficult time.

By Angela | Posted in Economy, General, Holiday, Miscellaneous Articles, Property, Tenerife | Tagged , , , , , , , , | Comments (0)

Signs of recovery in Spain and its islands says El Mundo

April 24, 2009 – 1:28 pm
Signs of property market recovery state El Mundo

Signs of property market recovery state El Mundo

An article in ‘El Mundo’, one of Spain’s leading news papers, suggests there may be signs of recovery in the Spanish property market, in one of the first positive articles on the outlook for the market since the crisis began.
“It appears to be the beginning of the end of the worst period for property sales since the crisis began,” says the article.

Pointing to encouraging signs that real estate markets may have bottomed out in the US, the UK, and France, the article suggests that Spain may be part of the trend.

The optimism also comes from a new report by Gonzalo Bernardos, a property market expert and professor of economics at the University of Barcelona, who argues that Spanish property market will come back to life this year, after a dismal 2008.

“There are five key reasons for saying that there will be more home sales in 2009 than there were in 2008,” writes Bernardos in his report. “Interest rates are lower; house prices have fallen back to their 2003 levels; banks are lending more; investors are coming back; and many people who were thinking of renting have decided to buy.”

Demand for housing is tempered by the cost of mortgage borrowing. With interest rates declining, Bernardos expects sales to pick up.

“There is a fundamental variable,” explains Bernardos. “People buy homes in response to mortgage costs, which have gone from rates of 6.25% in September to 3.25% today. We are talking, in general terms, of a fall in mortgage repayments of 40%.”

There is, however, a flaw in this argument, which the article in El Mundo does not pick up. Euribor – the base rate normally used to calculate mortgage rates in Spain – may have fallen rapidly to historic lows, but the average interest rate charged on new mortgages is actually rising, and credit terms getting tighter, making it more expensive for new borrowers to buy homes. Falling Spanish mortgage rates are only benefiting existing borrowers, who already have a home.

Another positive sign, says the article, is that housing starts picked up in the last quarter of 2008, rising by 7% compared to the previous quarter.

The recovery is already underway, suggests Bernardos, who says that, so far this year “sales have been between 25% and 40% higher than in the same period last year.”

Think Positive

So the market bottomed out in 2008, goes the argument, when house sales fell by 28.8% (13% for new builds and 41% for resales) whilst property prices fell by 5.4%, all according to official figures. On the question of prices, Bernardos doesn’t believe the official figures. “The fall in prices hasn’t been less than 20%, and in some places much more,” says Bernardos.

Another real estate expert cited in the article say that sales rates at new developments have picked up significantly. “In many developments they have sold more in the first quarter of 2009 than in the whole of 2008,” he says, also arguing that “prices have already bottomed out.”

“Banks didn’t know where the bottom was, now they do and they are giving 80% mortgages because the feel the market has bottomed out,” he goes on, whilst also warning that “nobody should expect bargains at 50% discounts. That’s not going to happen.”

Whilst Bernardos expects the market to return to life this year, that doesn’t mean he expects prices to start rising soon.

“Sales will start to rise in 2009, whilst prices will stop falling in most places by the end of 2010,” writes Bernardos in his report.

But if Bernardos is right, and prices continue to fall this year, that will encourage people to delay their purchase decision, and reduce the number of sales. The article does not pick any holes in his arguments.

And at no point does the article mention  the second home market, which operates differently to the primary housing market. Given the present state of the economy, with unemployment rising across Europe, it’s not hard to imagine that it may take a while longer for sales of holiday homes to pick up.

By Angela | Posted in Economy, General, Miscellaneous Articles, Property, Tenerife | Tagged , , , , , , , , | Comments (0)

Are we now over the worst?

April 24, 2009 – 11:12 am
Over the recession?

Over the recession?

If it is correct that the worst of the recession is now behind us then the UK economy should start to recover next spring, according to the influential Ernst & Young Item Club’s latest forecast… This may well mean that property hunters and investors will once more turn towards Tenerife for all types of property bargains. Just why do people from the UK and Northern Europe look to purchase in Tenerife?The prospect of year round sun,  great bargains in all areas of the property market, be it from one bed apartments to villas, or business opportunities that now abound are just a few reasons why Tenerife is looked upon as a great place to invest.  Why not take a look at the opportunities that now exist on this island?

By Angela | Posted in Economy, General, Holiday, Inspirational, Miscellaneous Articles, Property, Tenerife, Things to Do | Tagged , , , , , , , , , , , , | Comments (0)

Investment strategy for purchasing property in Tenerife’s opportunistic market

April 23, 2009 – 4:12 pm
Experienced estate agents in Tenerife will assist you in your strategy

Experienced estate agents in Tenerife will assist you in your strategy

If the strategy for investing in real estate in 2009 had to be whittled down to one word, it would be ‘conservatively’ and there are many differing opinions about when the market is going to rebound, which markets are fundamentally strong and where you should be putting your money

People always argue that one method for investing in real estate is better than another, and of course they support their claim with a bunch of numbers and a list of pros and cons. But how do you really compare investing strategies like “buy and hold” to “fix and flip” for example?

In truth, you don’t have to, because they all lead back to the same  investing philosophy: “keep it simple.” Oh, and also… “keep it conservative too.”

While the current real estate situation has opened up doors and windows for those that have always wanted to add real estate to their portfolio, it’s also created massive black holes that inexperienced investors can easily get sucked into.

As a result, you have to be more careful today than ever before when you enter a transaction dealing with real property, regardless of whether you’re purchasing, lending, insuring or participating.

So  being aware  that you are going to keep things simple and conservative in 2009, how exactly do we go about investing in what’s being called one of the most opportunistic markets of our lifetime? Simple advice do only what you know how to do, or find someone that knows how to do something else to help you, like a good agent with experience and a track record.

Even with all of the opportunity that 2009 will likely present, it will bring with it an insurmountable load of risk and uncertainty. Market value a year from now could  be  lower than it is today, but it could also be higher.

So before you run out and start piling real estate into your portfolio, here are a few pieces of wisdom, 

It’s very important that you know what you’re doing before your start doing it. Or, at the very least, get in touch with someone that knows what you’re doing and ask them for help, the agent. One bad step in this game can cost you thousands.

You need to decide what’s going to work best for you based on where you are, the financial resources that you have available to you and the timing of your business plan.

Here are a few examples of different types of real estate investments that work, albeit some better than others, in an environment like this:

Buy and hold (cash flow)

Fix and flip

Private Money Lending

Purchasing Distressed Sales

There are  many opportunities out there this year. Don’t even think about taking on unnecessary risk. Even if you only go after the best deals, you’ll have plenty to feast on and you won’t suffer any losses that could have easily been avoided.

Make sure that you’re in love with an investment before you make any commitments.

The last piece of advice that you need when attempting to invest in real estate in 2009 is actually a question. It’s a question that you should keep in the back of your mind at all times: “What is property really worth today, and what’s it going to be worth tomorrow?”

Whatever you do, tread carefully in 2009. There are pitfalls amidst the golden façade of what looks like one of the greatest investing opportunities of all time. Know how to recognize them by using good advice or you’re likely to get snared.

By Angela | Posted in Economy, General, Holiday, Inspirational, Miscellaneous Articles, Property, Tenerife, Things to Do | Tagged , , , , , , , , , , , , , | Comments (0)

New buyers in Tenerife’s housing market

April 19, 2009 – 10:43 am
New buyers in Tenerife?

New buyers in Tenerife?

New buyers are moving back into the housing market as the number of properties coming up for sale has stopped growing.  The increased demand - without a corresponding rise in supply - has improved confidence, and the demand is coming from the British market.

Whilst there is always a seasonal rise, as we move towards the Summer, factors such as the recession in the UK are encouraging people to consider a move abroad

This renewed confidence has a knock-on effect on the local Tenerife housing market, where British property ownership has been estimated at as high as 48,000 homes.

At the moment, it is the best value properties that are being snapped up.  Properties that have been on the market for some time, at the same price, are likely to remain for sale until growth catches up with them.

The concentration of demand is at the low to medium sector of the market, with properties in excess of €500,000 being slower to show an increase in interest.

By Angela | Posted in Economy, General, Miscellaneous Articles, Property, Tenerife | Tagged , , , , , , , , | Comments (0)

Brits still looking to purchase abroad though on smaller budgets

April 15, 2009 – 2:39 pm
Brits searchibg for property in Tenerife though with less cash.

Brits are still searching for property in Tenerife though with less cash.

Brits looking to buy abroad have slashed their budgets by over £50,000 in the last year, according to portal PropertyIndex.com, with the average price of property enquired about now at £199,284 in March 2009, compared to £253,435 in March 2008…

However, the  number of overseas property viewings via the internet in March rose, following a dip at the end of 2008, showing that the aspiration remains for Brits to buy property abroad despite the global downturn.

While Brits looking to buy overseas have less money to spend, they are still seeking the same type of property as they did a year ago - predominantly one and two-bedroom apartments in coastal locations, within a two-hour journey of an airport.  This makes Tenerife extremely attractive given its virtual all year round sunshine.

Buyers are watching the market carefully and waiting for the right moment to buy, and there are signs that this time is approaching as the pound strengthens against the Euro and price falls slow.

Brits aspire to own property overseas , although they have less money to spend and are seeking the best possible value for money. During the boom years, owning a home abroad became a mass market and that dream is not going to disappear overnight.

However, buyers are aware that property prices have fallen across the globe over the last twelve months, and they are determined to take advantage of this by securing the same type of property for  less than they would have paid a year ago.

By Angela | Posted in Economy, General, Holiday, Inspirational, Miscellaneous Articles, Property, Tenerife | Tagged , , , , , , , , , , | Comments (0)

A good time to build your own property in Tenerife?

April 13, 2009 – 1:47 pm
Now is a good time to build in Tenerife

Now is a good time to build in Tenerife

With Spain and Europe  going through a severe bout of real estate depression, and the residential construction sector in the eye of the storm, this might be a great time to build your own villa in Spain or its islands, taking advantage of plunging material, labour, and land costs.

Construction prices have  come down significantly over the last 3/4 years with sizeable reductions in both material and labour costs. Furthermore, the cost of construction finance is significantly cheaper than it was several years ago and certain banks will lend 100% of build costs thus negating the impact of the poor Euro exchange rate.

Now may be  the ideal time to self build with low cost of land, lower construction costs, lower interest rates and so on. For many people “sitting” on undeveloped plots, the only way to see value from that investment is to build. Otherwise you are left sitting on an investment with no yield in a flat market which will prove very difficult to sell on as the banks will not currently lend against land. Also why not build now and take advantage of the favourable conditions before the inevitable upturn arrives and the constructors have more work on and the cost of borrowing is higher?

It is much better to build on that fantastic plot rather than maybe see some ‘vulture’ investor pick it up for below market value and reap all of the rewards when you could own your own property in Tenerife and either keep it to enjoy yourself or allow others to rent whilst you accept the financial benefits that owning prime property in the right location can bring.

By Angela | Posted in Economy, General, Holiday, Miscellaneous Articles, Property, Tenerife, Things to Do | Tagged , , , , , , , , , , , , , , , | Comments (0)

Easter time in Tenerife

April 7, 2009 – 11:48 am

Domingo de Resurrección (Resurrection or Easter Sunday) in Spain and the Canary Islands is upon us again.

Schools broke up on Friday - in the Canaries children only get this one week - and Jueves Santo (Maundy Thursday) and Viernes Santo (Good Friday) are observed as Fiestas Laborales (Public Holidays), whilst Easter Monday, unlike the UK, isn’t, though the expats who now work here will be aware of this. There are many events taking place throughout the week, mostly solemn and religious in nature and, if you’re Catholic,  you probably know all about these.

The main events that may be of interest take place on Viernes Santo (Good Friday).

programa_semanasanta09-1 In the town of Adeje (which  is only a short bus -473 will take you to Adeje from Los Cristianos or Playa de Las Américas - or taxi ride from the main resorts of the south), in the main street, Calle Grande (see map), starting from 12 noon on Good Friday (April 10th, 2009) you can watch a magnificent re-enactment of the Death and Passion of Jesus Christ.

This has become immensely popular with locals and tourists alike,   so get there early to be sure of a good view.

The Vía Crucis (Way of the Cross) recreates the last days of the life of Christ; his entry into Jerusalem on a donkey, the Last Supper, through to the Crucifixion, and involves a cast of around 300, all in  costumes, representing the Biblical events often with great realism.

The complete almost 2 hour show is to be televised by RTVC. There are also videos showing the entire drama from last year.

The town of Candelaria is again doing its own theatrical production - a representation of La Pasión (The Passion of Christ), this year taking place on Wednesday, April 8th, 2009, commencing 9.00p.m.

In La Laguna on Good Friday you can watch the Procesión Magna, which includes a number of religious orders, leaving from the Iglesia de la Concepción at 5.00p.m. Later, at 9.00pm there is the Procesión del Silencio (Silent Procession), with the penitent brothers accompanying the deceased, again starting from the Iglesia de la Concepción to the church of Santo Domingo de Guzmán.

Tinerguia reproduce the entire Easter program in Adeje (in Spanish), but the photo with the post shows you clearest of all the detail involved.

For children, and others preferring different celebrations, Loro Parque in Puerto de la Cruz usually has an annual corral de los conejitos (the bunny enclosure), probably with the odd Easter Egg thrown in.

Our thanks go to Secret Tenerife for this information.

Whatever you reason for being here at Easter, be it holiday, property hunting for investment or relocation, we wish you a happy and peaceful Easter time.

By Angela | Posted in General, Holiday, Miscellaneous Articles, Property, Tenerife, Things to Do | Tagged , , , , , , , , , , , | Comments (1)