Spanish banks prepared to lend over 100% on repossessed properties

January 12, 2012 – 10:51 am

Spanish Banks are prepared to lend over 100% on their own properties that have been repossessed, it has been revealed. They are also selling them at rock bottom prices to attract buyers so that they can reduce the amount of property on their books.

According to Adam Cornwell, managing director of Feltrim International these are quality properties in desirable areas. Recent reports from a leading risk adviser say banks have around €30 billion worth of property that they can’t sell.

Source:  PropertyWire.com

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Buying opportunities in Tenerife and Spain

December 13, 2011 – 12:10 pm

Property bargains abound in Tenerife and Spain

The recent credit crisis has opened up some superb buying opportunities for buyers seeking a second home in Spain. While prices have fallen typically 25% from their peak.

For example, the Polaris World resorts were made famous by endless TV adverts featuring Jack Nicklaus before the recession hit, now these superb, complete golf resorts have a small proportion of unsold properties which the banks are keen to sell.

Buyers are advised to move quickly as much of the stock made available by the banks has sold in the last twelve months. Prime position property is becoming more difficult to find for buyers and the future of such cut price deals and mortgages remains uncertain with the government bailout of CAM about to result in a sale to a stronger banking group in Spain.

Villa Cashback MD Paul Williams remains cautious about continuing half price deals. “At this stage we don’t know what form a future CAM bank will take and what the pricing strategy of the new banking group will be. What we do know is that a weak CAM bank has so far undercut the stronger banks in pricing their property. Now it’s about to be bought by a stronger institution there’s no guarantee of the property giveaway continuing.”

Brand new apartments are available on resorts such as Hacienda Riquelme where front line golf apartments are available at less than half their original prices. Mortgages of up to 90% are available for overseas buyers. The resort has proved extremely popular with UK and northern European buyers this year.

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Property prices to fall further?

November 28, 2011 – 9:37 am

 The distressed nature of the Spanish property market combined with the country’s fragile economy suggests that property prices will fall further, despite the fact that they have tumbled nationwide since the peak of the market in 2007. The Eurozone debt crisis that has already seen three countries, Greece, Ireland and Portugal bailed out is now threatening much bigger economies like Italy and Spain. Furthermore, with unemployment and foreclosure levels in Spain both growing, it is hard to see how further price falls are not inevitable, presenting purchasers with an opportunity to bag an even cheaper priced home in Spain. Fresh research by an association of homeowners facing foreclosure (AFES), reveals that almost 20% of Spanish mortgages signed between the boom years of 2004 and 2008 are or will become delinquent. AFES calculate that over 700,000 families will have had their homes repossessed by 2015, which is a tragedy. But while extremely unfortunate, it does present those in a position to buy property, with an opportunity to secure a home at an even cheaper price, crushing any slim hopes that that market will soon embark on the road to recover. Mark Stucklin of Spanish Property Insight wrote: “Specifically, there were four million home purchases between 2004 and 2008 , the bubble years of the Spanish property boom  of which 170,000 have already been foreclosed, another 170,000 are in process, and another 375,000 are expected to be repossessed by 2015.” “All this at a time when there are more than three million empty homes in Spain,” he added. AFES propose partial or total debt forgiveness by banks, more mortgage lending, and lower property prices to making housing affordable. “The big social drama is that after losing their homes people are saddled with debts they can never afford to pay,” said Carlos Baños, President of AFES. or total debt forgiveness by banks, more mortgage lending, and lower property prices to making housing affordable. “The big social drama is that after losing their homes people are saddled with debts they can never afford to pay,” said Carlos Baños, President of AFES.

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Almost 1 in 5 Spanish mortgages signed between 2004 and 2008 are or will become delinquent

November 24, 2011 – 10:11 am

1 in 4 Spanish mortgages in Tenerife and Spain in trouble

Almost 1 in 5 Spanish mortgages signed between the bubble years 2004 and 2008 are or will become delinquent, according to a study by an association of home owners facing foreclosure (AFES).

AFES calculate that more than 700,000 families will have had their homes repossessed by 2015.

Specifically, there were 4 million home purchases between 2004 and 2008,  the bubble years of the Spanish property boom  of which 170,000 have already been foreclosed, another 170,000 are in process, and another 375,000 are expected to be repossessed by 2015.

All this at a time when there are more than 3 million empty homes in Spain.

The victims of this drama “borrowed more than they could cope with based on false expectations of rising property prices and employment,” explain AFES. “They never imagined they would lose their jobs and that property prices would crash.”

AFES propose partial or total debt forgiveness by banks, more mortgage lending, and lower property prices to making housing affordable. “The big social drama is that after losing their homes people are saddled with debts they can never afford to pay,” said Carlos Baños, President of AFES.

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Significant fall in property prices according to Tinsa.

November 10, 2011 – 9:39 am

Property prices falling in Spain especially by the coast

According to José Manuel Galindo, President fo the APCE builders and developers association, the fall in property prices, has been “significant”.

Prices are now down a total of 26pc in real terms since their peak, says Galindo, taking into account inflation and a reduction in VAT. When it comes to holiday homes on the coast, however, the falls have been more brutal. Prices on the coast have fallen by 32pc, according to Tinsa, and anecdotal evidence suggests it might even be higher than that.

Galindo stressed that many developers cannot afford to reduce prices any further. “Developers can’t sell below the cost of their mortgage, because they no longer have the money to afford the adjustment,” he explained.

 In the long-run, price will fall to affordable levels, regardless of how much builders or banks have to lose in the process.

Turning to the collapse in sales (down 40pc in August alone) Galindo blamed it on the lack of credit and local “purchasing capacity” and pinned his hopes on foreign buyers heping Spain mop up its glut of close to 300,000 unsold new homes on the coast.

He also described the recent Government led road show to promote Spanish property around Europe “rather ineffective”.

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Spanish commercial sector taking longer to recover

November 4, 2011 – 3:13 pm

Commercial property in Tenerife and Spain taking longer to recover

The Spanish commercial property sector is likely to take longer than 12 months to recover, new research has suggested.

Bloomberg Businessweek reported on data published by Savills, which stressed that a lack of finance coupled with the wider European debt issues will slow the market’s recovery.

According to the firm’s figures, investment in Spanish commercial real estate is now at its lowest level since 2001, with just €1.25 billion (£1.1 billion) in deals concluded in the first nine months of this year.

This represents a 52 per cent drop over the same period in 2010, with the news provider noting that a lack of funding from Spanish banks is deterring investors.

Source: PropertyShowrooms.com

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Euribor rate falls again.

October 17, 2011 – 12:31 pm

Euribor rate falls again affecting property sales in Tenerife

Euribor (12 months), the interest rate normally used to calculate mortgage repayments in Spain, fell for the second month in a row to 2.067pc in September, a percentage fall of -1.4pc on the previous month.

The rise of Euribor seems to have topped out, at least for the time being. With markets still fretting about a European debt crisis, expectations of rising interest rates have fallen, taking the heat off Euribor rates. The European Central Bank has said it has no plans to raise (or cut) the base-rate any further. It now stands at 1.5pc.

The monthly fall will not be much comfort for those with an annually resetting mortgage. Euribor is now 45.6pc higher than it was 12 months ago, meaning repayments on the average mortgage will rise by 480 Euros/year.  It was way too low between 2002 and 2006, sparking off an insane boom in Spanish real estate. It rose in 2007-2008 as other European economies and inflation started to grow too fast , but was slashed in 2009 to head of a depression. It made a feeble attempt to rise again this year, but that has run out of steam with the economy. It is now back around 2pc – way below what it should be in normal times.

But right now the problem is not so much the Euribor rate, which is historically low,  it is that banks don’t seem to want to lend at any rate, starving the housing market of credit without which it cannot recover.

New mortgage lending fell 47pc in July (to 29,523) compared to the same month last year, the lowest level recorded since this data series started in 2003.

The average residential mortgage value was €110,604, 9pc down on last year. All of which means less money around to fuel demand for Spanish property, putting further downward pressure on prices.

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New savings accounts for Expats

October 4, 2011 – 9:56 am

New offshore accounts for Expats

Offshore savers are set to benefit from a new choice of offshore savings accounts while accessing accounts by mobile is also being made enhanced as two major banks target expats.

Nationwide International, the offshore subsidiary of the UK based Nationwide Building Society, has launched a new range of savings accounts.

Source: ExpatForum.com

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Expats set up action group to fight Nordic banks.

September 15, 2011 – 9:05 am

Expats launch scheme to challenge Nordic banks

Expats who bought into unsuccessful equity release schemes and now face losing their properties have set up an action group to fight the Nordic banks behind the schemes.

Tempted by the offer of a salary for life and an inheritance tax reduction, organisers of Equity Release Victims Association, Ian Sherdley, 69, and Euan Armstrong, 73, used their Spanish holiday homes as collateral to buy into the equity release schemes.

The schemes were sold by independent financial advisors working the expat communities along the Costa del Sol on behalf of Denmark’s biggest bank Danske Bank and Nordea Bank SA.

They were told that if they took out full mortgages against the value of their Andalucian homes, which were fully paid for, and then gave the money to the bank to invest, their inheritance tax liability would be reduced and they’d receive a small lump sum, as well as a monthly return on the bank’s investment which would cover the cost of the remortgage and provide a small salary.

Source: The Telegraph

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Spain still a frim favourite for property

September 7, 2011 – 10:55 am

Property in Spain and Tenerife still a favourite with buyers

The three most popular international real estate markets are still the old favourites – Spain, France and the USA, according to the latest Top of the Props report .

In troubled times, many investors return to the things they know best and that certainly seems to be the case with overseas property buyers, with the top 3 countries sharing nearly a third of all property searches on TheMoveChannel.com.

Director Dan Johnson said: “The Spanish market is awash with great deals at the moment as Spanish banks continue to try and shift property cheaply. This phenomenon is unlikely to change soon, as there is plenty of supply, while the failure of some banks in the recent stress tests, means they’ll be keener than ever to divest the repossessed stock from their balance sheets. 

“France is an altogether different market, with a much higher concentration of lifestyle buyers purchasing holiday homes because they love the country and want to spend time there – it’s not such a price-sensitive market, though buyers are still pushing for good deals.”

Other notable movers and shakers this month are Portugal, which moved above Italy in terms of popularity for the first time and Thailand, which jumped up 12 places to number 9 and moved into the top 10 for the first time.

Of course, the Canary Islands especially Tenerife has some real bargains at present, why not check out the local estate agents and grab a property at prices paid  years ago.

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