Weather in Europe poor? Follow the sun to Tenerife!

Why freeze in Europe if you can afford a trip to sunny Tenerife?

Heavy snowfalls forced some of Europe’s busiest airports to close and wreaked havoc on roads and railways as an unseasonable cold snap swept the continent, claiming at least 15 lives. Temperatures dropped to as low as minus 18 degrees Celsius in some parts of Germany, while driving rain in Italy triggered the collapse of two Roman walls in Pompeii and flooding in Venice.

Thirteen people died of exposure in central Europe, including eight in Poland. Most were under the influence of alcohol, according to police.

Two people died in England in accidents blamed on the weather, one in a motorcycle crash and the other after falling into a freezing lake.

Albania meanwhile proclaimed a state of natural disaster in the north due to heavy floods, and more than 200 people were evacuated from the region near Shkodra as hundreds of houses filled with water.

Transport chaos hit the whole of the continent as the snow spread, and Britain – shivering in the earliest widespread snowfalls of winter since 1993 – was one of the countries worst affected.

London’s Gatwick Airport, Europe’s eighth busiest passenger air hub, will be shut until at least 0600 GMT on Thursday as staff worked to clear the runways.

A Qantas spokesman said none of their flights had been delayed. He said the airline operates out of London Heathrow Airport and Germany’s Frankfurt Airport, both of which have not closed.

Edinburgh Airport, Scotland’s busiest, was shut and delays were reported at airports in Glasgow and Aberdeen in Scotland, Newcastle in northeast England and Jersey in the Channel Islands.

British forecasters said Wednesday had been the coldest December 1 on record, with no hope of a let-up in the coming days.

British insurer RSA warned that bad weather in the run up to Christmas would have a major impact on the economy and could lead to significant losses for struggling businesses.

“This cold front couldn’t come at a worse time for the UK,” said David Greaves, director of RSA.

“If we lose just one fifth of our daily GDP through companies not being able to open and people cancelling spending plans on events and shopping, we’re looking at about £1.2 billion every working day,” he said.

Oil giant BP said the weather had “severely impacted” its deliveries to more than 100 petrol stations across Scotland and that it would only carry out safe and essential deliveries from its Grangemouth terminal near Edinburgh.

Police in the southern countries of Kent and Surrey advised motorists not to travel unless their journey was absolutely essential, with severe delays reported on the M25 London orbital motorway which passes through the counties.

Britain, which last year shivered through its coldest winter in 30 years, has not seen such widespread early snowfall since 1993.

Heavy snowfall also forced the closure of Geneva International Airport where 100 stranded passengers had to spend the night in the terminal. Two hundred others were sheltered by the civil protection unit as hotels were fully booked.

Switzerland’s Basel Airport shut its runway in order to clear off the 10cms of snow that accumulated in just over two hours. The country’s biggest airport Zurich was still operating, although 70 flights had been cancelled due to bad weather conditions in other airports.

At Germany’s Frankfurt airport, Europe’s third busiest, 153 flights were cancelled, all due to flights not arriving from elsewhere.

And 250 flights were cancelled at Munich airport, nearly a quarter of the daily total, mostly due to snow preventing take-offs.

In the Paris area, French aviation authorities asked airlines to cancel 25 per cent of their flights at Roissy airport and 10 per cent at Orly because of expected snowfalls. But there were no flight cancellations Wednesday

Snow and freezing temperatures however forced authorities to cancel 116 flights from Lyon Airport.

Trains were also hit, including the Eurostar, which operates high-speed passenger trains linking London with Paris and Brussels. Speed restrictions were imposed and led to delays of up to 90 minutes and some cancellations.

There were widespread problems on the roads across Europe, including in France where 17,200 trucks had to abandon their journeys nationwide.

There were serious accidents reported on the main road between Prague and the eastern Czech city of Brno.

In Italy snowfalls disrupted traffic in city centres and on motorways in the northern Lombardy and Piedmont regions, and in Spain school transport services were disrupted by heavy snow in northern and central regions.

Snowdrifts and fallen trees also caused traffic problems in Germany.

Bild newspaper said it was the coldest December 1 in several hundred years, with temperatures as low as minus 18C in some places.

Eight people have died of exposure in Poland, three in the Czech Republic and two in Lithuania, officials said on Wednesday.

In Italy two ancient Roman walls fell down in the archaeological site of Pompeii due to persistent heavy rains that wore away the ancient mortar between the stones.

With all this bad weather, why not  get on a plane to the warmth of Tenerife and the Canarian sun?

Canarian property prices improving according to TINSA

Canarian property prices beginning to recover?

Canarian property prices beginning to recover?

Spanish property prices are still falling, but less with every passing month, according to the monthly house price index published by Tinsa, one of Spain’s leading appraisal companies

Average Spanish property prices fell by 4.4% over 12 months to the end of May, show the latest figures from Tinsa. Prices actually fell a fraction compared to last month, even if they rose compared to the same month last year.Should the Tinsa figures be believed, the rate of decline in Spanish property prices has been slowing since June 2009, when it peaked at -10.1%. If the trend towards smaller declines keeps up, average property prices will be stable, or even growing slightly before the end of the year.

Prices have fallen the least over 12 months in coastal areas and the Islands, areas traditionally popular with foreign buyers looking for holiday and retirement homes. Prices are down just 4.1% on the coast, and 2.4% in The Canaries and The Balearics

On a peak to present basis (since prices peaked in December 2007), prices are down 16.5% nationally, 21.4% on the Mediterranean coast, and 12.8% in the Canaries and the Balearics. So anyone buying a property on the coast today should be getting a discount of 21% on average compared to 2007.

Tinsa’s figures are based on their own valuations, not actual transaction prices. Most of these valuations have been paid for by banks, and  they might not give a true picture of property prices .

May Index
National: 1,906
Mediterranean coast: 2,035
Balearics & Canaries: 1,641

Peak Index (December 2007)
National: 2,284
Mediterranean coast: 2,590
Balearics & Canaries: 1,881

Have Spanish and Canarian property prices bottomed out?

Spanish property prices are still falling, but by less with every passing month, according to the house price index published monthly by Tinsa, one of Spain’s leading property valuation companies. Average Spanish property prices fell by 4.6% over 12 months to the end of April, show the latest figures. On a monthly basis, prices even rose a fraction. Should  Tinsa figures  be believed, the rate of decline has been slowing since June 2009, when it peaked at -10.1%. Should this continue, average property prices will be  stable, or even growing slightly within about 6 months.

Tenerife,Canarian and Spanish property prices bottomed out?

Tenerife,Canarian and Spanish property prices bottomed out?

Prices fell by 5.2% on the Coast, and by 3.8% in The Canaries and The Balearics – areas that interest holiday home and expat buyers the most. On a peak to present basis (since prices peaked in December 2007), prices are down 16.1% nationally, 21.5% on the Mediterranean coast, and 13% in the Canaries and Balearics according to Tinsa’s figures, prices have bottomed out and are beginning to recover.

Tinsa’s figures are based on their own valuations, not actual transaction prices. They are interesting in what they reveal about trends, and the valuations used by banks for mortgage lending purposes.

National: 1,916 €/m2
Mediterranean coast: 2,033 €/m2
Balearics & Canaries: 1,636 €/m2

Peak prices (December 2007)
National: 2,284 €/m2
Mediterranean coast: 2,590 €/m2
Balearics & Canaries: 1,881 €/m2  .

Opportunities still exist in Tenerife and Spain’s property market.

Opportunities still available in Tenerife, the Canary Islands and Spain

Opportunities still available in Tenerife, the Canary Islands and Spain

We think there are  good investment opportunities in Spanish  and Canarian real estate today, but some are risky. In three years we’ll probably be kicking ourselves for not advising more 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.

There are hundreds of thousands of possible transactions, but not so 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.

House prices touched bottom some time ago, they had to fall. The price of land has fallen faster than house prices although it could even fall a bit more.  In the US and the UK prices have fallen around 20% from the peak whilst here we have only fallen by 8%. Valuations appear to be down 30% in 2 years.. 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.  Quite a few homes are being sold more than 200,000 homes a year in fact. 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. Perhaps that purchase in Tenerife should be made sooner rather than later!

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. We believe that developers have dropped their prices to the minimum.  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.