Monthly Archives: April 2010

Spain looking up in 2010

April 25, 2010 – 2:44 pm
Spain's property looking up in 2010

Spain's property looking up in 2010

Spain saw a slight easing of the downward pressures on its housing market during the first three months of 2010.

According to the Spanish Housing Ministry, prices fell by an average 4.5% year-on-year, compared with an annual fall 6.2% in the final quarter of 2009, and 7% in the third quarter. The Ministry’s latest figures are in line with research from, TINSA, which put the annual decline at 5.3% in March, down from 5.5% in February and 9.7% a year earlier. As in the UK, the realities of the Spanish housing market are strongly regional, and in addition, the reliability of the country’s official house price figures has been questioned from time to time.

Last month, Spanish property specialist Kyero described the country’s official house price index as “ridiculous” claiming that everyone in the business knows that average prices have fallen more than reported.

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

Prime Minister of Spain defends country’s solvency.

April 14, 2010 – 1:15 pm
Spain's Prime Minister defends solvency

Spain's Prime Minister defends solvency

Spain Prime Minister José Luis Rodríguez Zapatero has passionately defended his country’s solvency. With Greece struggling to contain a debt crisis, some investors have fretted that the problems could spread to Spain.

“Spain has a big plus. It is, as a country, very solvent,” he told the Frankfurter Allgemeine Zeitung, adding: “We have a plan for the reduction of the deficit within three years.” Asked if the Spanish economy would flounder, together with the euro, Zapatero replied: “No. The euro will retain its vitality. We are still in the biggest crisis since the Great Depression and in a phase during which confidence in us and the euro is being tested. But we will pass this examination.”

Turning to the possibility of Greece, or other euro zone states such as Spain, being rescued, Zapatero added: “If one has to intervene, then I think that has to be done together, within the institutions of the EU. We should have confidence in the Greek government and in the requests the (European) Union has made of it,” he said.

Some argue that as a socialist, Mr. Zapatero is in a better position to tackle reform than are the conservatives. He could say that “the current system is socially divisive” and “mainly penalizes the young, women and immigrants,” said Charles Powell, a history professor at CEU San Pablo University in Madrid.

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

The rise and fall of the Spanish property boom

April 13, 2010 – 3:12 pm
Foreign investment in Spanish property has hit a decade low

Foreign investment in Spanish property has hit a decade low

If you want to chart the rise and fall of the Spanish property boom look no further than the foreign investment figures, published by the Bank of Spain.  Foreigners invested 3.7 billion Euros in Spanish property last year, the lowest level since 1999, when it was 2.9 billion.

In percentage terms, foreign investment in Spanish real estate was down 32% last year compared to 2008, and by 48% compared to 2003, when foreign investment in Spanish property peaked.

The surprising thing is the increase in foreign investment in 2007 and 2008, when the market was already cooling fast. This might have something to do with the massive corporate property investments that took place at decadent end of Spain’s property boom, before the credit crunch struck.

Going the other way, the amount invested by Spaniards in property outside of Spain fell 45% last year to 1.8 billion Euros.

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

Confidence grows for overseas buyers

April 12, 2010 – 1:42 pm

 

Confidence grows for overseas buyers in Tenerife

Confidence grows for overseas buyers in Tenerife

 There’s a growing feeling of confidence amongst prospective overseas property buyers, according to overseas mortgage firm Conti. The firm just had its busiest month for almost a year in terms of mortgage ‘go aheads’, the point where prospective buyers take their mortgage quotes through to the application stage. These increased by 48 per cent during March, compared with the previous monthly average. 

The proportion of prospective buyers progressing from the quote stage to the go ahead stage has also increased, suggesting that buyers are becoming more serious about their intended investment.

Despite the turbulence unleashed on the UK mortgage market by the global banking crisis, Conti says that overseas mortgage providers have a healthy appetite for lending to foreign investors. But a combination of factors, not just mortgage availability, are contributing to the attractiveness of this market. Falling property prices, in some cases by up to 50 per cent, and historically low interest rates are making it much more affordable, despite the current strength of the euro. 

Clare Nessling, Conti’s Operations Director, says, “Falling property prices across many European destinations mean that the chance of owning a place in the sun may never be better, and historically low interest rates mean it’s become even more affordable for British buyers. The most popular destinations amongst our clients are still France and Spain, both of which come with easy access and good rental opportunities.

“Confidence is definitely growing, but there’s also an element of buyers snapping up bargains in traditional hotspots while they have the chance.”

Beating the poor exchange rate

According to Conti, an increasing number of British investors buying second homes in Europe are taking out euro-denominated mortgages in order to beat the poor exchange rate. This not only allows them to take advantage of cheap interest rates, but could potentially save them significant sums of money if, as experts predict, sterling appreciates against the euro over the next few years, as this will reduce the sterling cost of the property purchase.

Clare Nessling says, “A euro mortgage could be a good idea, even if you thought you didn’t need one. As you’ll only need to transfer money for your deposit and fees for now, it minimises the amount of sterling you have to exchange for the property purchase. Even if you’re lucky enough to be a cash buyer, it may be worth taking out a mortgage until the exchange rate improves, at which point you can pay it back, and ultimately reduce the price you pay for the property.”

“There are a number of other benefits associated with euro mortgages. If, for example, an investor is going to rent out their property, having a euro mortgage means that their rental income and mortgage repayments are in the same currency, and they can therefore avoid exchange rate fluctuations.

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

Upturn in Spanish housing sales.

April 10, 2010 – 10:43 am
Upturn in Spanish property market

Upturn in Spanish property market

There was a small upturn in Spanish housing sales during the fourth quarter of last year, according to recent data released by the Spanish Ministry of Housing.

The increase was small, but enough for the Government to get excited about: “The transactions in the fourth quarter represent a rise of 4.1% with respect to the same period last year, this being the first year-on-year rise since the fourth quarter of 2006″.

In fact, if you just look at the ordinary housing market, the upturn was even better. Excluding social housing there were 116,664 house sales in Q4, a rise of 5.5%. Regrettably, that’s where the good news ends.

Take the year as a whole, there 413,112 transactions last year, a fall of 19% compared to the previous year, and a whopping 46% down on 2007. Even the Q4 was down 33% compared to 2 years ago.

Some regions did better than others. Looking at a selection of regions popular with holiday home buyers, the inland province of Teruel suffered the most in 2009, down 36%, followed by Las Palmas in The Canaries, down 32%. At the other end of the scale, Spain’s two big cities did the best, down just 1.7% in Madrid and 3.9% in Barcelona.

The small national upturn in Q4 that got the Ministry excited was almost entirely driven by big increases in Catalonia and Madrid (Barcelona +35%, Madrid +41%). Why the big surge in home sales in those two cities in the last quarter of 2009? I don’t know. But I wouldn’t be surprised if it had more to do with banks shifting Spanish property around their balance sheets than families buying homes to live in.

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

Thomas Cook to pull out of Canary Islands?

April 9, 2010 – 10:57 am

The Irish low-cost carrier is to offer 32 services to the Canary Islands (Gran Canaria, Lanzarote, Tenerife and Fuerteventura) from nine British airports this summer – with the routes being supported by discounts offered by the Canary Islands’ government. Thomas Cook, Britain’s second-largest tour operator, has claimed that Ryanair will receive a subsidy equivalent to at least 6.5 euros per passenger on the new routes.

Thomas Cook to leave Tenerife and the Canary Islands?

Thomas Cook to leave Tenerife and the Canary Islands?

Thomas Cook has given warning it could pull out of the Canary Islands in a row over the “subsidies” it claims are being paid to Ryanair by local authorities.

Manny Fontenla-Novoa, chief executive of Thomas Cook, said in an interview with the trade publication Travel Weekly that “paying” Ryanair to fly to the islands was not the way to arrest falling visitor numbers and said that Thomas Cook might switch to selling more holidays in Turkey and Egypt.

A spokesman for Ryanair denied that the carrier received subsidies. “The discount scheme is available to all airlines that commit to growing traffic to the Canary Islands,” he said. “Instead of complaining, Thomas Cook should apply for the scheme, lower its fares and compete on price to grow its business – something it has never had to do in the Canary Islands.”

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

European real estate transactions on the rise

April 6, 2010 – 3:52 pm
Commercial real estate on the rise throughout Europe

Commercial real estate on the rise throughout Europe

European real estate transaction volumes could rise as much as 30 percent to around 90 billion euros ($124 billion) this year as credit markets thaw and prices stabilise, according to a report by broker Jones Lang LaSalle.

Appetite for commercial property is returning, with 24.6 billion euros of deals done in the last quarter of 2009, more than double the 11.6 billion euros in the first three months of the year, the report said. “The growth we are expecting to see this year will be fuelled by an improvement in the availability of debt, the recognition that pricing has probably hit or even passed its floor, slightly more appetite for risk-taking, and more assets coming to the market,” Jones Lang director Chris Staveley said.

The data, published on the eve of MIPIM, Europe’s largest property trade fair, highlighted a revival in confidence among key real estate players after a two-year decline.

However, even if the total volume of deals hits 90 billion euros, Staveley said Europe’s commercial real estate investment market would still be modest in size in historical terms, roughly in line with 2002 levels.

“A weak economic outlook sets the backdrop for difficult occupier markets almost everywhere, and despite some markets seeing some recovery in prime rents, caution and risk aversion will remain key themes in the market in 2010 for investors and occupiers alike,” he said.

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

Spain’s property recovery begins

April 3, 2010 – 10:01 am
Spain's property on the rise again?

Spain's property on the rise again?

The Spanish property market’s recovery has begun! That’s how some leading daily papers like El Pais are interpreting the latest figures from the National Institute of Statistics (INE) showing the market grew ever so slightly in January. The market appears to have found a floor, which is an improvement on the 2 years plus of monthly declines we had before.

The figures for January from the INE show that, excluding social housing, there were exactly 34,000 sales in January, up 1.4% over 12 months. A year-on-year increase of 1.4% is no big deal, but it’s a much needed respite when it is the first time in 3 years that the market has actually grown. And it’s difficult to dismiss it as a one off, because it is clear that the market has now found a floor around 30,000 transactions/month.

But, of course, we have to keep in mind that the market in January was 56% smaller than it was in January 2007, when it stood at 77,400 sales/ month. So a year on year improvement is good news, but peak-to-trough the Spanish property market is still just a shadow of its former self. If you dig into the figures you find that most of the improvement is now coming from resales, not new builds. New build sales kept the market from total annihilation last year.

A lot of the improvement came from big cities like Barcelona, Valencia, and Madrid, whereas sales continued falling in popular coastal regions like Malaga (Costa del Sol) and the Canaries, particularly Tenerife bucked this trend. So, when it comes to holiday homes, the market in many areas is still shrinking.

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