Buy property in Tenerife and Spain now.

February 7, 2010 – 1:18 pm

Time to get your bargain property in Tenerife and Spain now

Time to get your bargain property in Tenerife and Spain now

 

Property markets are cyclical, and the time to buy prime property  could well be now. When the “bust” is here, everyone else is trying to sell. This could be  the threshold of the buying opportunity of the decade.

We have been expecting things to go pear-shaped  in the Spanish property market  before the boom started to show the first signs of running its course  because property markets are cyclical, and always have been (though the long-term trend has always been up, in Spain at least).  However for the first time in 6 years,  we could be  on the threshold of the buying opportunity of a decade, as we start the next cycle. Prices, in many cases, are back to levels last seen before 2004.  This is the time to buy, during the bust, when everyone else is trying to sell, not during the boom, when everyone else is buying.

Caution is the way  to proceed . There is still a lot of over-priced property on the market, there is a large glut of property that may not have a market today at any price, unattractive, poor quality flats in undesirable locations. However,you can now find attractive homes in superb locations for very reasonable prices. The worst of the crisis appears to be over, and most European economies are growing again. Many affluent Europeans are bound to be interested in a prime property on Tenerife’s  coast, which means those properties are never going to be given away, and prices might not go down much further.

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

Opportunities available in Spanish real estate

January 7, 2010 – 5:03 pm
The latest news from Spain and Tenerife's Euribor and mortgage situation

The latest news from Spain and Tenerife's Euribor,mortgage and property situation

Mikel Echavarren, an experienced professional in touch with many different companies in the property sector  is worth listening to. Here is a selection of his recent comments 

Do you think there are any good investment opportunities in Spanish real estate today?

I think so but they are risky. In three years we’ll probably be kicking ourselves for not advising investors to invest now. There aren’t many opportunities in commercial real estate because there isn’t much product and rents haven’t yet adjusted. In residential, on the other hand, the correction has been very strong and fast. The ideal profile now is an opportunistic investor buying properties off banks by taking on the existing debt, a type of real estate venture capital.

So you think there are opportunities in a residential sector because the adjustment has already taken place?

There are hundreds of thousands of possible transactions, but not many genuine opportunities. What there is not is any financing, so anyone who wants to take advantage of this market has to take the debt with the asset, but there are still very few people prepared to do that today.

Has the price of housing and land touched bottom?

House prices touched bottom some time ago, they have already fallen all they had to fall. And the price of land has fallen faster than house prices although it could even fall a bit more. We have been saying at the top of our lungs that the price statistics published by the government are worthless, and damaging to the sector because they give international analysts the impression we are a country of idiots. In the US and the UK prices have fallen around 20% from the peak whilst here we have only fallen by 8%. 

What’s wrong with the official statistics?

They are based on valuations. One has to look at real property transactions and a survey of developers to see not only their asking prices but how far they are prepared to drop prices to sell.

Do you think there is any residential property that will never sell?

What there is is a stock of land that will never be sold, at least not in 10 years. There are areas of Spain where the town plans look like they were designed for an invasion of extraterrestrialsOn the other hand, the stock of finished property will be absorbed sooner.

Is there any real demand for housing at the moment?

Yes, quite a few homes are being sold. We would have to place it at more than 200,000 homes a year. What is not selling is off-plan, as there you take the risk of the developer or builder going bankrupt. It’s a good time to buy newly built homes with Euribor at 1.24%. They won’t be any cheaper next year. And when prices start to rise they will do so at a rate of 10% per year.

How does one get the Spanish property sector to recover?

The residential sector is already recovering, just not the developers, who won’t see the light at the end of the tunnel for three years; it is very bleak for them. Clients of ours tell us they have sold a lot this summer, and some banks tell us that they have had more mortgage requests this summer than in all 2009. Furthermore, we believe that developers have dropped their prices to the minimum. There is mortgage financing available, not much, but there wasn’t any at all in 2008, and now there is. Mortgage costs are low, and it appears that the future is not going to get any worse. The recovery is underway, although this won’t show up in the official statistics until the first half of 2010. As soon as there is a general perception that things are getting better, house prices will stop falling and start rising.

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

Expats and problem tenants in Spain

November 3, 2009 – 5:14 pm
Problems with tenants in Spain and Tenerife may be reduced by using an agent

Problems with tenants in Spain and Tenerife may be reduced by using an agent

According to Paragon España , part of the Paragon Advance group of companies offering tenant referencing and rent warranty in Spain, reluctant landlords in Spain are increasingly experiencing problems with bad tenants hit by the economic downturn.

It is claimed that the number of defaulting tenants and evictions have tripled in the past two years and many of the landlords who are experiencing problems are expats who moved to Spain for a better lifestyle and then became reluctant landlords. They have been forced into letting out their homes in order to be able to pay the mortgage and, for those investors who jumped on the Spanish property market, buying off plan, only to see it go into freefall before they could offload their investment, they have had their fingers burned and are having to let long term and ride it out.

Many expat landlords are unaware of the different mechanisms in place to secure rental income and often fail to implement them in their rental agreements which can leave them unprotected if the tenant does not, or cannot, pay the rent, according to Paragon España. This is where the use of a rental agent pays dividends and Tenerife is no exception to this rule.

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

Tips when buying property overseas

November 1, 2009 – 12:22 pm

When buying property You should  spend time researching the companies in the market place - using the right professionals  and estate agents will save you time, money and stress.  is not a process to be rushed.  Time is required to research the market as a whole and your particular destination of choice.

 

Good tips for buying property whether in Spain or Tenerife can save money

Good tips for buying property whether in Spain or Tenerife can save money

See below five tips for buying property overseas safely, just published by the Association of International Property Professionals. The AIPP is the independent industry body for international property.

1. Independent lawyer

However good your estate agent seems, not all countries are like Spain and Tenerife and an independent lawyer should be  representing  you throughout the purchase of your property overseas in emerging countries. It is the lawyer’s job to protect you and inform you.

2. Do the numbers

Make sure you know your budget before you start looking at properties - this should include at least a provisional mortgage offer if you’re borrowing money.

Don’t then be tempted to buy more properties than you can afford (particularly on off-plan properties) hoping to sell the extra properties before completion unless you fully understand the risks as well as the rewards (see point 5).

If borrowing money, your repayments will stretch over several years, years in which lending criteria and borrowing costs may change. Discuss the long term repayment with a financial specialist before proceeding.

3. Beware exchange rate movement

The rates do not need to move substantially to affect the value of your purchase. When you start looking, £100,000 may buy you a certain property - a 10% drop in the value of the £ against the Euro, for example, may then put that property out of your budget. If you’ve already signed contracts to buy, this could cause you a problem.

Speak to specialists in this area and secure your rate of exchange early.

The rate fluctuations will also affect the costs of mortgages (if you raise the mortgage overseas and earn your income at home). Again, speak to a foreign exchange specialist to highlight the risks and to take appropriate action.

4. Use professional agents and developers

There are few, if any, guarantees when buying property, at home or overseas. Employing a professional agent or buying from a professional developer will also help you.

Ask lots of questions. 3 year old children are known for asking lots of questions (why? why? why?) and you should follow their lead when talking to agents about a purchase. Initially, focus questions on the company itself, not the properties for sale. Dig around for details on the founders of the company and the track record of the company.

Ask for client testimonials (real ones) and make sure you find out in detail exactly what service they offer. Don’t just take their word for it - ask for details on their service in writing, preferably in the form of some type of ‘Terms of Business’.         

5. Remember the reward: risk ratio

If you are buying property overseas as an investment (as many people have done in recent years), you need to bear in mind that big returns may come with significant risks. Be careful to assess the possible downsides to an investment property as well as the enticing investment numbers that could be achieved if all goes to plan.

Take your time and follow these tips and there is no reason why you’ll be taking any more risk buying overseas than you do at home.

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

Advice available when purchasing a property in Tenerife and overseas

October 11, 2009 – 11:05 am

The 64-page guide is available in both hard copy and online digital format (for the first time this year) and is full of useful advice for those looking to buy a property overseas.

Advice is available when purchasing property in Tenerife and overseas

Advice is available when purchasing property in Tenerife and overseas

The Association of International Property Professionals (AIPP) has released the 4th edition of its annual guide, Buying Overseas Property Safely - The Consumer Guide from the Industry Body.

The guide explains how the AIPP can help you; the top tips to buying overseas safely; the 10 questions you should ask agents or developers before paying any money and how much it costs to buy - with a few examples of properties overseas. It also explains who buyers will need to hold their hand through the process, from agents and developers to lawyers, foreign exchange specialists and financial advisers.

This year’s edition is full of useful tips along with a few ideas for avoiding common pitfalls and a full list of AIPP Members, of course, all voluntarily committed to follow our professional Code of Conduct.

“In a largely unregulated sector, our sole aim is to make the international property market a safer place in which to buy property,” explains Paul Owen, Chief Executive of the Association.

The guide will be available as a bagged supplement in A Place in the Sun magazine or you can view the AIPP Guide online

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

Banks will start lending when prices stop falling

July 28, 2009 – 3:26 pm
Banks in Spain will lend again when property prices stop falling

Banks in Spain will lend again when property prices stop falling

The president of the Spanish banking association, Miguel Martin, said recently that banks will start lending again when “the fear of a property price collapse” has passed. When that happens, the solvency of buyers will improve as a result, he argued.

Speaking at the recent property sector trade fair in Madrid, Martin explained that “with greater demand and stable prices, or without the fear that prices will collapse, borrowers will see their solvency and collateral improve, and credit will start flowing again.”

At the same event, José Manuel Galindo, president of the APCE developers’ association, drew attention to the role played by banks in causing Spain’s property market slump. He called on banks not to discriminate against clients buying property from developers, accusing them of unfair competition for offering better mortgage financing terms to clients who buy property from the banks

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

Brits ’still buying abroad’

July 16, 2009 – 9:14 am
Brits still planning to buy in Tenerife

Brits still planning to buy in Tenerife

Many Britons are planning to buy abroad within the next year, according to a recent survey by a global property portal.

In a recent online poll, 70 per cent of those browsing the site for overseas property claimed they were preparing to buy within the next year, with more than half of this group expecting to buy within the next six months.

However, while many are getting ready to make that commitment and secure themselves a home overseas, PropertyIndex.com has warned of the potential pitfalls of buying overseas and offers buyers some essential advice to ensure a smooth and stress-free purchase:

Decide on your budget and factor in extra costs
Before you start out on your search it’s important to ensure you can afford it and that you have factored in all the likely extra costs. There are a lot of hidden costs involved in buying a property abroad, from taxes to  agent fees, which can be much higher than in the UK.
 
Do your research and don’t buy on impulse
It’s important to spend time researching an area before you leave home. Go online and visit relevant exhibitions to get a good idea of what’s available, typical prices and what the area has to offer in terms of amenities and access. If possible, try to also visit the area at different times of year - whether you’re planning to live there yourself or rent it out, somewhere that seems an ideal location in the summer might be quite a different place in the middle of winter. Though Tenerife has sun all year round.

Never buy a property you haven’t seen
A number of buyers make this mistake, often finding themselves with something entirely different to what they were expecting when they make the first visit. Never buy a property unless you have seen it and you’ve had  checks on ownership of the property and land. A good estate agent in Tenerife should organise this for you.

Take a wider perspective
Wherever you’re buying, check out how to get there - do flights run regularly all year round, is there a choice of airlines? This is particularly important if you are planning to rent out your property and are relying on budget airlines to provide a quick and inexpensive route to your chosen location. Tenerife is well served by many such airlines.

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

The costs involved in obtaining that home of a lifetime

July 1, 2009 – 1:56 pm

 

The true cost of buying your home is amazing

The true cost of buying your dream home can be amazing

If people realised how much it costs to move house over a lifetime, we might just start looking for a real home sooner rather than later.

The story of Alfonso De Marco is enough to strike fear into the heart of  hard-pressed estate agents. Mr De Marco, a 107-year-old retired ice cream parlour owner, has lived in Britain since 1909. And in that time how much has he paid in fees to estate agents or letting agents while moving home? Precisely zero. He has just celebrated 100 years at the same  “I love it here, it is my home,” he told reporters last week. “I could have moved somewhere else but I have never wanted to.”  Just imagine if we all took his attitude, we wouldn’t spend precious time thumbing through the pages of the Tenerife Property Guide in search of our dream home.

 No wonder Mr De Marco has lived to be 107. Just think what he has missed out on over the years. He hasn’t had to suffer that coronary-inducing dash to complete a purchase before the gazumpers arrive. He hasn’t suffered disappointment when a property that seemed a good deal turns out to have just gone He hasn’t had the millstone of a mortgage, nor experienced negative equity.

Think of the money we would save if we followed Mr De Marco’s example. Until the property bubble burst  and slowed us down, we were, as a nation, in the habit of moving home approximately every seven years and buying that  second home in Tenerife as well. In other words, we buy and sell around seven houses during our adult lives.  We will have spent  around €85,000 in property tax alone in our lifetimes.

Assuming we pay estate agents to sell our homes we will spend a further amount in estate agents’ fees. Then there  might be the cost of solicitors’ fees -  and the cost of removal vans, reprinting our personalised stationery and so on - perhaps another €1000 per move. Then there is the cost of redecorating each property to remove the previous owners’  taste. That is going to cost at least €10,000 per property on average.

All in all, that adds up to around €215,000 spent moving home in our lifetimes - which is more than the average 65 year-old has in a pension fund. Just think of all those extra holidays in retirement in Tenerife had we not blown our earnings moving house so much or how much bigger our dream home in the sun might have been!

 As far as I am concerned there is only one way to go house hunting: imagine, like Mr De Marco, that you will still be there in 100 years. If the thought of being stuck in Stoke for the next century is abhorrent, forget it: don’t buy that dream  house until you have found a property in which you really would be satisfied to live until you are carted away in a box. Then move there and stay there. While your friends waste their lives upsizing and then downsizing, you can stay the same size - and enjoy yourself and the weather in Tenerife.

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

First time Spanish purchasers part with 86% of their income

June 29, 2009 – 11:35 am
Purchasing property in Tenerife is a struggle for the Spanish first time buyers

Purchasing property in Tenerife is a struggle for the Spanish first time buyers

Thanks to high property prices and miserable salaries, buying a home has been prohibitively expensive for Spanish first time buyers for the best part of the last decade. Now that the Spanish property boom has turned to bust, and house prices are coming down, you would think that buying a home is becoming a lot more affordable for first time buyers.

Well, you’d be wrong. Housing affordability has improved a bit, but buyers in the 18 to 34 age group still have to spend on average 86% of their annual income to finance the purchase of a home, according to the Observatorio Joven de Vivienda, a body that monitors housing accessibility for young people. Lower interest rates and property prices have only improved affordability for young people by 2% since the last quarter of 2008.

So, even taking into account the small improvement in affordability, young people living in Spain still need to earn triple the average salary for their age group if they are to afford a home without taking on an unreasonable level of debt, says the Observatorio Joven de Vivienda. No wonder then that many property owners in Tenerife are from outside of Spain and the enquiries that estate agents receive are mainly from Brish and Scandinavian  prospective purchasers.

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

Take advantage of the property market conditions in Tenerife now!

June 26, 2009 – 12:07 pm
Take advantage of the property market conditions now and buy in Tenerife

Take advantage of the property market conditions now and buy in Tenerife

People should take advantage of the weaker market conditions and consider buying Property in Spain now.

For many months confidence in the property market has been low and, quite frankly, who can blame house hunters for holding back when it comes to making one of the biggest investments of their lifetime. Taylor Woodrow de España, told the press. “However, now we are seeing a number of people returning to the market, anxious not to miss out on some of the excellent deals that are currently available.”

Sague argues that now is a once in a generation opportunity, and that it is only a matter of time until the market recovers.

“With the market looking up, inflationary pressures may start to build on house prices, as confidence returns. Indeed, house hunters who hesitate might miss the chance of a lifetime to buy at the bottom of the market”, he added. “I believe history will show that people who buy in the present climate did so at just the right time. Not taking advantage of the most affordable moment of the decade in the property market could turn out to be an expensive missed opportunity!”

Given today’s euro-sterling exchange rate, now is a great time to purchase property in Tenerife. Check out the bargains at your estate agent now.

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