Average prices depreciate in Spain

May 3, 2012 – 2:05 pm

Prices of property fall in Tenerife and Spain

The average price of a home in Spain depreciated by 41.7% between 2006 and 2011, as a consequence of the housing crash, which has been fuelled primarily by a significant housing glut, according to research by Barcelona based Universitat Pompeu Fabra (UPF).

The study, which analysed the sales figures of real estate firm Tecnocasa provided from the end of 2006 to the end of 2011, suggests that Spanish property prices are likely to fall further unless credit conditions improve.

A lack of mortgage liquidity is partly to blame for the collapse in demand for properties in Spain, which has contributed significantly to the huge gap between supply and demand in the country.

The research, led by García Montalvo, reveals that the greatest fall in Spanish property prices occurred between the second half of 2010 and the same period in 2011, when prices fell by 19.7%.

Furthermore, the study shows that while prices have plummeted at the lower end of the property market, price falls have not been so great in some of the most exclusive areas in Spain.

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

Rising airport charges could cost Spain and Tenerife’s tourism

April 24, 2012 – 9:33 am

Rising airport charges could damage tourism in Tenerife, the Canary Islands and Spain

Rising airport charges could cost Spain 2.87 million tourists, industry figures have warned. The Alliance for Tourism Excellence, Exceltur, labelled the increase in charges as “disproportionate” following their announcement in the State Budget for 2012. The fees, announced this month, could cost the country 2.87 million visitors, the association warned. The reduction in visitor numbers could amount to €1.64 million each year. The new rates, which are expected to be incorporated into ticket prices, have sparked fears that airlines will turn to other beach holiday destinations as a cheaper alternative to Spain, a move that could have serious implications for Spain, a country which relies upon tourism as a major form of income in a post recession climate. Airports expected to be most affected include Barcelona El Prat, which could lose 1.16 million tourists, Madrid Barajas, with 945,115 fewer visitors, and Palma de Mallorca, which could see tourist numbers reduce by 268,567.

Source: Kyero.com

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Banking reforms set to hit Spanish property prices

March 20, 2012 – 10:11 am

Banking reforms in Tenerife and Spain affect property prices

New banking reforms are expected to hit Spanish property prices hard, causing values to plummet across many parts of the country, particularly in popular holiday destinations, presenting further bargains for house hunters looking to buy a home in Spain.

According to Spanish Property Insight, referring to a recent article in the Spanish financial daily Cinco Días, the Spanish government has introduced reforms to reduce home prices and get banks lending again. But some experts believe that this will cause the price of holiday homes on the coast to plummet due to the chronic oversupply of unsold homes on the market.

Josep Oliver, economics professor at the Autonomous University of Barcelona, believes that property prices in the country’s main cities are now at or near the bottom of the downturn, but the same can not be said for holiday homes along the coast.

“There is not much room left for price declines,” he told the press. “Discounts of up to 50% are only being considered for holiday homes or unfinished new-developments.Whilst the stock grows in holiday home areas, demand is focused on big cities and provincial capitals where there is little excess and prices have already adjusted.”

According to CatalunyaCaixa, a savings bank, about 65% Spain’s housing glut of 800,000 new homes was built on the coast with holiday home buyers in mind, especially in Catalonia, the Balearics, the Valencian Region, Murcia and Andalucia.

The province with the biggest problem by far is Castellón, in the North of the Valencian Region, and home to the so-called Orange-blossom coast (Costa del Azahar), with around 114,000 empty new homes, compared to 57,000 in Barcelona and Alicante (Costa Blanca), 52,000 in Murcia, and 40,000 in Valencia province.

“That means Castellón, a relatively unheard of destination with a new airport that nobody yet flies to, is responsible for around 20% of the entire Spanish glut of new holiday-homes. New developments in Castellón like Marina D’or development help explain why, said Mark Stucklin of Spanish Property Insight.

He added: “The excess inventory of new homes in Malaga province, home to the Costa del Sol, is relatively minor in comparison. According to local builders there are less than 20,000 new homes on the market, most of which will have sold in the next couple of years. The Costa del Sol is a mature market with good access and diversified international demand where almost everything sells in due course.

“The Costa del Azhar is a different story. Who will buy 114,000 new holiday-homes there in any reasonable time-frame? What if prices get really cheap there? Will that help, or is there no demand at any price?”

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

Cheaper homes in Spain as sellers try to attract more buyers

February 17, 2012 – 2:33 pm

Cheaper rental and sale property prices in Tenerife and Spain

Resale Spanish property asking prices continued to fall last month, as more vendors slashed prices in a bid to secure a sale. The latest home price index published by idealista.com shows that the average price of a home in Spain depreciated by 9.4% compared to January 2011.

The figures provided by the Spanish property portal reveal that January 2012 was the worst month since the Spanish housing crisis started four years ago. On a month on month basis, asking prices of homes in the idealista.com database depreciated by 1.9% to an average price of €2,045sqm (£1,712sqm) suggesting that homeowners are becoming more realistic about the need to reduce property prices if they are going to have any chance of attracting more home buyers.

It represents the biggest fall in asking prices since idealista.com started publishing the index before the property crash got underway in 2008.

On a monthly basis, prices fell the most in Castille La Mancha (-2.3%), followed by The Balearics, Asturias and Andalucia (-2.1%).  With property prices falling, housing affordability has somewhat improved in Spain, based on average property prices versus average gross annual household income, which has fallen from 7.7 years at the peak of the property boom to a current rate of 6.2 years, according to the Bank of Spain.

Spanish families might welcome more affordable housing,  but housing is still much more expensive than it was before the boom, when it cost just 4 years gross annual income or less.

“There are several reasons why the affordability ratio has not improved more with falling property prices, including higher mortgage borrowing costs and lower household income, said Spanish property commentator Mark Stucklin.

He continued: “None of this really applies to the cost of holiday-homes on the coast, where prices have fallen substantially more than the national average, and where foreigners with higher incomes than the Spanish national average tend to buy.”


The average cost of renting a home in Spain also fell last year as rental prices depreciated in 77% of Spain’s primary rental markets, the latest to data from Idealista.com and the Public Rental Company show.

The greatest rental price decline was recorded in Toledo by 8.7%, followed by a 6.8% drop in Oviedo. In Spain’s largest cities of Barcelona, Madrid and Valencia rents fell by 3.1%, 1.3% and 4% respectively.
However, rents actually increased in Lleida, Bilbao and Alicante rentals, rising 11.2%, 4.2% and 4.1% respectively.

These rental price declines follow on from falls in 2010, suggesting that Spanish homes are becoming cheaper to rent, as well as buy.

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Crucial year for Spanish real estate

February 9, 2012 – 4:37 pm

Crucial year for property in Tenerife and Spain

Property prices in the prime locations of Barcelona remained resilient throughout 2011 but it remains possible to purchase properties at discounts of up to 30% on 2007 prices, according to market analysis for Q3 and Q4 2011 by estate agents Lucas Fox. Having analysed the property markets in Barcelona, Mallorca, Ibiza and Costa Brava property markets, the company predicts that foreign property investment will rise in 2012. Alex Vaughan, Director at Lucas Fox International, says that his firm is still receiving strong interest from buyers looking to buy homes in some parts of the country, many of whom are keen to take advantage of the discounted prices that are possible. But the picture is less positive in other regions of Spain, with agents in some parts of the country such as Murcia and Alicante reporting on large amounts of property stock on the market and a very low volume of transactions. “In these worse affected areas 2012 looks set to be another crucial year for sellers and agents alike,” said Vaughan. “There are, however some positive signs in the market as a whole. Last year the Spanish government lowered the purchase tax payable on new build property which stimulated transactions in the last quarter and the new PP Government have announced that this measure will be continued through 2012.” 

The signs for 2012 are positive with a much larger amount of enquiries from international buyers  than we normally experience at this time of year.” Many prospective buyers who have been observing the Spanish property market for the last few years have now decided that it is the right time to show their hand and start negotiating on their ideal property, according to Stijn Teeuwen, director of Lucas Fox International Properties. He said: “For those clients that get it right there are possibilities to buy prime properties in the best locations at major discounts on the prices that there were being sold at prior to 2007 / 2008.” Tom Maidment, director at Lucas Fox Costa Brava, added: “There are still plenty of opportunities to purchase well-located, quality properties at interesting prices

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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.

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

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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Property prices decreased by 4% in Spain last year

January 16, 2012 – 3:05 pm

Property sales fall in Tenerife and Spain by 4% last year

Prices for property in Spain decreased by four per cent last year, according to a new report. Figures from Sociedad de Tasacion show the average cost of a new dwelling stood at €213,840 (£177,169) in 2011, with 81,000 properties being built during the 12-month period. Barcelona had the most expensive homes, while Murcia recorded the lowest prices.

The real estate organisation said it believes this downward trend for house values will continue in 2012. However, it also suggested the balance between supply and demand will improve, as the number of available residences starts to match the needs of buyers following the oversupply of properties in recent years, the Leader reported.

Source: PropertyShowrooms.com

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Spain stepping up tax plans

January 3, 2012 – 10:07 pm

Spain's taxation approach helping property sales in Tenerife?

Spain is stepping up its tax plans to tackle the country’s deficit, but buyers are snapping up property regardless as further price drops are predicted for 2012.

The Spanish government’s predictions initially stated that national debt would amount to 6 per cent of GDP for 2011, but it was revealed last week that these figures were incorrect and that the country deficit is closer to 8 per cent.

Since then, Spain’s government has added that the debt “could be even higher”, according to The Daily Mail, prompting the recently elected Popular Party to go back on its pledge not to raise taxes. Property tax is expected to increase for homes above average value, Spain’s swift economic action has been welcomed by the EU as the country tries to reassure international investors who are snapping up properties at low prices.

Indeed, reports at the end of December from Global Property Guide found that foreign property transactions surged by 24.7 per cent in the third quarter of 2011, compared to the same period in 2010.

Alicante, Barcelona, the Balearic, Canary Islands and Malaga were all highlighted as popular areas for buyers, with research from Scotibank Group showing that house prices across Spain have fallen by 25 per cent since 2007. These price drops are now expected to continue in 2012.

Knight Frank’s Prime Global Forecast has predicted that global economic uncertainty will push Madrid’s property values down in the next 12 months. But with investors attracted by Spain’s declining property prices, Madrid’s fall of “less than five per cent” may provide more opportunities for international buyers. As Murcia prepares for the construction of its much-awaited Paramount Theme Park, buyers can benefit from the national downward trend while costs remain low.

Julio Adams said “Demand for key ready homes in this area is already high and we expect an equity boost of around 15 per cent for early buyers when the first spade goes in to start construction of Paramount Park.” With some Spanish regions seeing a gradual recovery and the number of foreign transactions on the up, the government’s reworked deficit plans may take Spain’s housing market in a positive new direction for the New Year.

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3.4 Million Spanish homes are empty.

December 2, 2011 – 11:08 am

Too many empty homes in Spain

3.4 million Spanish homes lie empty, 13pc of the total housing stock  according to a new report from IDC. There are 676,000 empty homes in Barcelona and Madrid alone. Of the two, Barcelona has the biggest problem.

This is a “worrying situation with very negative consequences, principally a huge cost,” explains Carlos Parra, Director of IDC, quoted in the Spanish press. The empty homes are neither for sale nor for rent.

At the same time, tens of thousands of homes are being repossessed, and millions of young adults can’t afford their own home.

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