Author Archives: Angela

Rental prices fall in Spain’s cities

February 3, 2012 – 10:25 am

Rental property prices fall in Spain and Tenerife

Rental prices fell in 77pc of Spain’s primary rental markets (cities), according to a study by Spanish property portal Idealista and the Public Rental Company(SPA).

Rents fell the most in Toledo (-8.7pc) and Oviedo (-6.8pc) but rose in Lleida (+11.2pc), Bilbao (+4.2pc), and Alicante (+4.1pc).

The average cost of renting a home in Spain declined in 2011, as you would expect with property prices falling.

In Spain’s biggest cities, rental prices fell 1.3pc in Madrid, 3.1pc in Barcelona and 4pc in Valencia.

The latest annual rental decline follows a bigger decline in 2010, so the cost of both buying and renting a homes in Spain has been getting cheaper for several years.

The study was based on 38,000 properties listed for rent in the 12 months to the end of December.

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TINSA and government house price index shows falling prices

February 2, 2012 – 10:37 am

Tinsa and government index shows property sales in Tenerife and Spain down in 2011

The House Price Index published by the Department of Housing shows house prices falling 6.8pc in 2011, and 19pc since the peak

Last week it was the appraisal company Tinsa’s house price index showing prices down 8pc in 2011. Now it’s the turn of the Government to publish it’s housing price index for 2011, showing a broadly similar decline of 6.8pc over 12 months to the end of December .

Both the Tinsa index and this one show  a double-dip starting at the end of 2010 and price-falls accelerating in the course of 2011.

After adjusting for inflation, Spanish house prices fell 9.6pc in real terms in 2011. So anyone with an inflation proof income (the majority of Spaniards with indefinite labour contracts) saw the real cost of buying a house fall by 10pc last year, or more if you include the 50% reduction in VAT on new homes.

Prices fell the most in Aragon (-10.4pc), Madrid (-8.2pc), Andalucia (-7.8pc) and Catalonia (-7.7pc), and the least in The Basque Region (-3.1pc), Asturias (-2.7pc), and Extremadura (-2.1pc). According to Fernando Encinar, head of research at the  Idealista, “there is no reason to think that anything is going to change in 2012.”

Of course you have to take all the official figures with a large pinch of salt. If the official index shows declines of 6.8pc, the reality was probably something between 10 and 15pc.

Soon to be published, and all that remains to be seen for 2011, is the official House Price Index from the National Statistics Institute, which should come out in the next month or two, and which tends to be used by the international press. Based on past form it will probably understate price declines more than any other index, which partly explains why so many articles in the international press say that Spanish property prices haven’t fallen enough.

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Developers ask government for mortgage interest tax relief on holiday homes

February 1, 2012 – 11:51 am

Developers ask for reduction of tax on properties in Spain and Tenerife

The G14 association of Spain’s leading developers says it will ask the Government to introduce mortgage interest tax relief on holiday homes to stimulate demand and deal with Spain’s   empty new holiday homes on the coast.

The Government has just reintroduced mortgage interest tax relief on main homes, despite the fact that it favours owner-occupiers at the expense of those who rent, and makes it harder for Spain to reach its stated goal of increasing the rental market. Developers want a similar tax break for holiday homes.

Some industry voices like Antonio Carroza  have wasted no time in describing the request as “irresponsible”. He believes it is wrong to use public money to subsidise “large developers so they can sell second homes that should never have been built,” he said, quoted in the Spanish press. In any event the tax relief would only apply to Spanish residents, not foreigners buying holiday homes in Spain and Tenerife.

The G14 has also called on the Government to reduce the ITP sales tax on resale properties.

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High end Spanish property performing well

January 31, 2012 – 9:45 am

High end property in Tenerife and Spain performing well

Despite tough market conditions for property in Spain, one company has posted its most successful operational year to date in 2011, showing the appetite for high-end Spanish real estate has not waned.

2011 saw Lucas Fox doubling its staff, opening new offices and posting record-breaking third quarter profits of 19.5 Million euros, proof of the continued appeal of Spain among the cash rich. Among the most popular areas for investment were Barcelona, the Costa Brava and Mallorca where investors snapped up boutique and luxury pads.

Aimar Valls, Head of Commercial & Investment Property commented, “In the last year we have received a dramatic rise in both the quantity and quality of enquiries for commercial and investment property. Central Barcelona is a hot-spot for hotels, hotel projects and buildings with potential for tourist apartment rentals.

And the company is also optimistic about their fortunes in 2012. Director Alex Vaughan explains, “Our transaction pipeline is already looking strong and the outlook for the year is very encouraging. We start 2012 with over 5,000 active property buyers registered from Northern and Eastern Europe, Russia, Scandinavia, the Middle East, the U.S and China.”

Source: APlaceintheSun.com

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Sterling high good news for Brits buying property in Tenerife and eurozone.

January 27, 2012 – 10:55 am

Sterling high against the Euro a boost for property buyers in Tenerife and Spain

There was good news for Brits seeking to buy property in the eurozone as sterling reached a 15-month high against the euro currency. The euro’s value depreciated against the UK pound on the back of fresh concerns regarding the the health of the eurozone’s banking system.

Sterling increased by 0.73% to €1.208 on Wednesday  its highest level since September 2010. The euro also fell 0.95% against the dollar to $1.293. Despite concerns about the fragile state of the UK economy, it is generally considered to be doing better than the Eurozone, which is struggling with a major debt crisis.

Geoffrey Yu, currency strategist at UBS, told Reuters: “Maybe the UK is approaching a consensus (for a recession) but it’s not there yet. And there’s no break-up risk, so people are more willing to allocate funding from a passive perspective at the start of the year.”

However, despite the recent recovery in the strength of the pound versus the euro, some currency experts do not expect sterling’s value to increase much further in the short- to medium-term.

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Bargain homes in Spain prove popular with international buyers.

January 26, 2012 – 10:05 pm

Bargain hunters in property are investing in Tenerife and Spain

Overseas nationals spent €3.6bn (£2.3bn) on buying homes in Spain in 2011, as they took advantage of significantly discounted properties, according to data supplied by the Bank of Spain. The figures show that foreign property investment in Spain increased by 27% last year compared to the preceding year.

With Spain’s economy in turmoil and the housing market in disarray, owed largely to a major oversupply of homes, property prices have been in freefall, attracting more bargain hunters in the process. The hike in property sales in 2011 marks a second consecutive year of growth in international investment with 2011 beating the total value of transactions in 2010.

Many property professionals believe that the rise in foreign investment activity is a sign that property market conditions are improving. Spanish journalist Daniel Talavera  believes that the Spanish property market is now touching rock bottom of the downturn.

“2011 has probably been the worst year in terms of property prices and sales drop. If the price fall in 2010 was by 3% compared to 2009, the mentioned fall of 6.85% in 2011 compared to 2010 confirms that the market is reaching its lowest at the right speed.”

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A weaker Euro means less pounds for British vendors who repatriate their funds to the UK

January 25, 2012 – 1:25 pm

The weaker euro v the pound affecting property vendors in Tenerife and Spain

In the Euro zone , we continue to see the  single currency’s woes. For many investors and property owners in Spain it’s time to look at the bigger picture, which doesn’t paint a pretty scene as the hang-over continues into 2012.

The second half of last year revealed a number of detrimental factors that have hurt the Euro zone – a worrying decline in stocks, increase in unemployment, Governments finally pulling their heads out of the sand and recognising the problems within their own countries have all contributed to the crisis, which left people asking whether the single currency will even survive a year. It is a fair assumption that the Euro zone debt crisis will remain the central focus of markets going well into the New Year, so further weakening of the Euro is expected.

The outcome of the EU Summit last month did little to support the currency, with the outlining of plans to work towards greater fiscal integration in the euro zone failing to provide any comfort to the market as GBP-EUR pushed the €1.20 (0.833) level, and some forecasting €1.25 (0.8) by the end of February.

So the Euro could well continue to fall, in which case now might be a good time to sell it, or get a forward contract to do so if you are not yet ready (for example, if you are in the process of selling a property in Spain).

For example, if you wanted to change Euros into Pounds in June last year, when one Pound cost 1.11 Euros, but you didn’t have access to the Euros until December, a foward contract could have saved you £6,992.21. Firstly, you agree a rate of exchange for the amount of Euros that you are looking to sell and give a date that you know that the funds will be available before (bond maturity, or date of expected house completion for example).

A 10% deposit is needed within a few days of agreeing the rate and you can then relax and not be affected by any market movement, and can get your money at any stage at the fixed rate and all you need to do is send over the Euros when you have them before the end of forward contract.

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Survey finds Spain is where British expats are happiest

January 24, 2012 – 10:25 pm

Brits happiest in Tenerife and Spain says survey

British expats are happiest in Spain, followed by Canada and Germany, according to new research which also examined their cost of living and financial well being.

The survey by Lloyds TSB International also found that overall British expats are far happier in their adopted countries than in the UK.

Overall, 68% of those asked said that they felt happier where they were than in the UK, although for certain countries this figure was much higher. Spain ranked number one for expat happiness, with over three quarters, 75.9%, of Brits living there saying they are happier than back at home. Germany also rates highly on the happiness scale with 71% saying they are happier than in the UK.

Source: ExpatForum.com

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Spain’s central bank forecasts contraction of 1.5% this year

January 23, 2012 – 4:14 pm

Spain's Central Bank expects contraction of 1.5% this year

Spain’s central bank on Monday forecast that the country, which is struggling to slash its deficit and debt, will fall back into recession this year with a contraction of 1.5 percent.

The Bank of Spain said however it expects Spain’s economy to make a modest rebound in 2013 with growth in gross domestic product (GDP) of 0.2 percent. It added that it estimates the economy to have grown by 0.7 percent in 2011.

“In 2011 the modest recovery which the Spanish economy began a year earlier weakened as the eurozone sovereign debt crisis extended to a greater number of countries and financial market tensions strengthened,” it said in a report. Source: Google.com

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Martinez new director for housing, land and architecture.

January 20, 2012 – 7:26 pm

Pilar Martínez  is the new Director of Architecture, Housing and Land for the national government in Madrid. She takes over a tricky post from Beatriz Corredor, the former Secretary of State for Housing under the Socialist Government.

Her office is part of the Ministry of Public Works and she will report to Ana Pastor, the new Minister in charge of that department. Martínez previously worked as head of housing in Madrid’s municipal government.

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