Spain back in “crisis mode”, but affordable property good news for investors

April 23, 2012 – 9:31 am

Spain in crisis,but property in Tenerife is good value for investors

Spain is back in “full crisis mode”, according to one bank, as property prices continue to plummet. “It is looking more and more likely that Spain is going to have some form of bailout,” Rabobank told OPP. “Assuming there is not an (ECB) intervention, you would not see a cap on Spanish yields, they would just keep increasing.” After the country’s 10-year boom came to a messy end in 2007, Spain’s economy has been dropping like a stone, taking the property market with it. Mortgages payments are rising as rates of inflation rise to 3.4 per cent and banks are left in a vulnerable position, holding one-fifth of the country’s 1 million vacant homes. The new Spanish government are introducing austerity measures to recoup lost finance, including cuts to education and health, but with almost five million unemployed and the economy still shrinking, the return of recession is “likely to suppress local demand”, according to Reuters columnist Maharg-Bravo. But more affordable property remains good news for overseas investors, as real estate values continue to decline at 22 per cent to 29 per cent each year. 

 Tenerife, with it’s beaches and sunshine is still attracting investment from overseas.

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

New trends in property purchase to aid Tenerife?

October 18, 2009 – 12:42 pm
banksspain

New trends in holidays may mean that property purchase in Tenerife can be a wise investment.

The holiday season may be over, but it appears that trips abroad this summer have inspired many of us to buy our own home overseas.

Conti, the overseas mortgage firm, report that they have just had their busiest month since the beginning of the year, with a 20% month-month surge in mortgage quotes issued during September. The value of mortgage applications submitted by the company to overseas lenders also rose to a year high.

As property prices fall across Europe, the chance of owning a holiday home abroad may never be better, and with rates at an historic low, it’s even more affordable for British buyers.

Clare Nessling, Conti’s Operations Director, says: “The ‘staycation’ trend may have reduced the number of  Britons holidaying abroad this summer, but many of those who did venture overseas have returned home with plans to buy their very own place in the sun.

“As the darker nights return and the all-too-short British summer comes to an end, it’s very easy to dream about sunnier climes. But it can be more than just a dream. Affordable prices, low interest rates, and a healthy appetite by overseas mortgage providers to lend, are all making it easier to buy property abroad. Easy access to the more traditional locations like Spain and the Canary Islands, together with good rental opportunities, are also contributing factors.”

According to Conti’s recent hot spots report, they have had 22% requests on property in Spain.  It seems that buyers are sticking to the locations they know and trust and shunning the more adventurous emerging markets like property in Bulgaria and property in Dubai.

Conti says that there’s a growing feeling of confidence amongst prospective buyers, and that savvy investors are more willing to explore overseas opportunities in their search for better potential returns on investment than they are achieving in the UK.

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

Latest mortgage news

August 16, 2009 – 5:39 pm
Loans increas in Tenerife and Spain as property prices are more affordable

Mortgage costs in Tenerife and Spain reduce making property purchases more affordable

Euribor (12 months), the interest rate normally used to calculate mortgage payments in Spain, fell to an all time record low of 1.41% in July, down from the previous record low of 1.61% in May. Euribor is now 73.8% lower than it was this time last year, when it hit a high of 5.393%, leading to significant savings for mortgage borrowers on annually resetting mortgages.

Thanks to the latest drop in Euribor, the average borrower can expect to save around 300 Euros per month, or more than 3,500 Euros per year, on mortgages that reset now.
Euribor has been following down base rates set by the European Central Bank. These started falling in October last year, when they were lowered from 4.25% to 3.75%, and now stand at just 1%. The relentless recent fall in Euribor suggests that the market might be expecting further cuts in base rates.Mortgages fuel the property market, so activity in the mortgage market is an important indicator for the property market.

The latest figures from the National Institute of Statistics (INE) reveal that mortgage activity is still significantly down on last year, but may have turned a corner in May as key figures started to improve on a monthly basis.

The number of new residential mortgages signed in May fell by 23% to 57,614 compared to the same month last year, but rose by 15% on a monthly basis.

The average mortgage value in May fell 14% to 121,120 Euros year on year, but rose 5% month on month.

Overall new mortgage lending was 7 billion Euros, 33% less than a year before, but 20% higher than April.

The average interest rate agreed for new mortgages in May was 4.6%, 11% lower in percentage terms than a year ago, and 2.2% lower than the preceding month.

96% were variable rate mortgages, the remainder fixed rate

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

Spanish loans on the increase.

August 8, 2009 – 10:13 pm
Loans increas in Tenerife and Spain as property prices are more affordable

Loans increase in Tenerife and Spain as property prices become more affordable

The number of new Spanish property mortgages approved in May rose by 15per cent to 57,614 compared to the previous month, indicating that demand for property in Spain and Tenerife is rising, according to Spain’s National Institute of Statistics.

However, on an annual basis the volume of mortgages issued in May fell 23per cent, compared to the corresponding month last year.

The average mortgage value in May fell 14per cent to €121,120 (£102,560) year-on-year, but rose 5per cent month-on-month potentially reflecting the fact that cheaper properties in Spain and Tenerife are now available.

Overall new mortgage lending was €7bn, down 33per cent year-on-year, but 20per cent higher than April.

The average interest rate agreed for new mortgages in May was 4.6per cent, 11per cent lower in percentage terms than a year ago, and 2.2per cent lower than the previous month.

The majority – 96per cent – of all Spanish mortgages secured were on a variable rate, with the other 4per cent fixed.

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