A good time to buy in Tenerife and Spain?

July 11, 2010 – 12:00 pm

A good time to buy property again in Tenerife, Spain and the Canary Isles.

A good time to buy property again in Tenerife, Spain and the Canary Isles.

Is now a good time to buy property in Spain and Tenerife? The current Minister of Housing says yes, the former Minister says no. 

Beatriz Corredor, the current Minister for Housing, recently said in an interview with the Spanish daily El Pais that now is an “optimum” time to buy a home in Spain. “We have a huge selection, low interest rates…..The fiscal and financial situation means that now is an optimum time (to buy).”

True, she was talking about primary residencies, not holiday homes. Even so, I’m sure she would argue that now is a great time to buy any kind of property in Spain. She was responding to the following question from El Pais:

“Your predecessor María Antonia Trujillo told El Pais on Wednesday that she wouldn’t buy a flat now, that prices should fall from the peak between 30% and 50%….What do you make of her comments?” Her predecessor  doesn’t think this is a good time to buy. “I’ve been looking to buy for three years. I would not buy now,” she told El Pais, also saying she hopes prices correct (by up to 50%) “as soon as possible”. Trujillo, who was Housing Minister from 2004-2007, is free to speak her mind, unlike the current Minister, whose job it is to talk up the market.

So, who is right? Corredor, the current Minister, or Trujillo, her predecessor? Is now a good time to buy a home in Spain? There is no doubt that now is the best time in years for cash buyers. Prices in coastal areas have fallen by up to 50% (or more), there is more choice than ever, and cash buyers can find good value for money (and a lot of over-priced rubbish too).  The economic situation is still dire, and prices might fall even further, especially for Spain’s glut of undesirable property. We  don’t think prices for prime and A-grade Spanish property are going to fall much further, so Corredor is probably right if you look just at these segments. Trujilllo may be right when it comes to the rest of the market.

The worst time to buy was during the boom, when prices went through the roof, quality crashed through the floor as the economy strained to build too many houses, and every cowboy ever born jumped into the business looking for easy money, financing wasn’t a problem then.

Are cash buyers looking for prime and A-grade property in a better position now? Certainly, so if you are planning that purchase in Tenerife, Spain or the other Canary Isles, now may well be THE time!

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

Tenerife to cash in on latest survey?

October 12, 2009 – 4:26 pm

Tenerife could cash in on the latest gloomy British survey

Tenerife could cash in on the latest gloomy British survey

Britain is the worst place to live in Europe, according to a study.

Although Britons earn high incomes that money is cancelled out by long working hours, poor annual leave, rising food and fuel bills and a lack of sunshine. Britons have  the highest after-tax household income of £35,730-a-year, more than £10,000 above the European average.

But most of it goes on keeping a “roof over our heads, food on the table and our homes warm”, according to the uswitch.com European Quality of Life Index.

Ann Robinson of uSwitch.com, said: “There is more to good living than money - and this report shows why so many Brits are giving up on the UK and heading to France and Spain.”  Perhaps now is the time to think of renting out your Tenerife property or even selling via an estate agent as winter approaches in the UK and thoughts turn to sunshine!

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

Bank repossessions in Spain and Tenerife

August 22, 2009 – 9:39 pm

Bank repossessions provide great bargains for those with cash in Tenerife

Bank repossessions provide great bargains for those with cash in Tenerife

There was an interesting  article this week in the Spanish daily ‘El Mundo’ about bank repossessions in Spain, and what the 10 biggest lenders are offering investors. It  pointed that Spain’s banks and savings banks – known as cajas – are now the country’s biggest real estate companies. “Nobody knows how many properties they own, not even the banks themselves,” one expert told El Mundo. Their stock of repossessions is growing fast, and is expected to keep on doing so. All thanks to foolish lending in the past.

Banks aren’t, or shouldn’t be, in the property business, so this is a big headache for them. To liquidate their growing stock of property banks start by classifying property as ‘A’ or ‘B’.

‘A’ is new build from developers who can’t repay their loans, good quality, in good condition, and easier to selld, in theory at least. This is reported to make up 70% of the stock the banks now hold. Banks are using their own property divisions – recently set up in most cases - and branch networks to sell this ‘A’ property, offering discounts and preferential financing terms.

‘B’ is made up of repossessions from home owners who can’t pay the mortgage. There are forecast to be 74,000 foreclosures this year, and banks already have 9 billion Euros of bad debts from private owners on books.

Once again if you have cash available then you can bag  great property bargains  in Spain and Tenerife.

 

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

Spanish rescue fund for banks

July 10, 2009 – 10:00 am

Spanish banks have so far coped relatively well in light of the global financial crisis, with only one small savings bank, Caja Castilla La Mancha, having run into grave difficulties.

Spanish banks rescue plan may aid your bargain property purchase in Tenerife

The Spanish rescue fund for banks may aid your bargain property purchase in Tenerife

The Spanish Government has announced details of a rescue fund of up £85 billion  to help the country’s banks cope with a string of bad loans, including poor mortgages used to buy property in Spain, as well as help reform its banking system. But executing the plan will be difficult.

Unemployment currently stands at 18 per cent and is rising, which will further dampen demand for property in Spain. Most banks have already swapped poor debt for properties in Spain from struggling developers, which has improved the non-performing loans ratio, but may cause problems moving forward.

Clearly, if you have cash available, now could be the time to purchase that dream property in Tenerife. It may be your dream second home in the sun, an apartment to rent out, or just to use for holidays yourself. Whatever your wishes a trip to your Tenerife estate agent should be a priority if you are serious about investing in Tenerife property before the bargains disappear.

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

Brits top Spanish property market

May 8, 2009 – 1:38 pm

Brits top the property market in Tenerife.

It’s no secret that the British are important players in Spain’s property market, but it is a shock to see quite how important. The British completely dominate the expat market for homes in Spain, much more so that many  thought. This could have implications for the property market, now that the weak pound and other factors have hit the British demand.
Estate agents  always realised that British demand led the expat market. In one of the most comprehensive studies of the expat property market in Spain, British demand was estimated at 34% of the expat market in 2001, falling to around 30% in 2008, on a par with the Germans.

 Spain’s property register has  started publishing figures that breakdown property transactions by nationality, and  the British are far and away the biggest buyers. 

Property transactions by nationality show that  the British were 58% of the European expat market in 2008, with 11,485 new title deeds registered, down from 63% in 2006.

The next biggest group – the Germans – were just 10% of British demand in 2008, with  1,534 properties bought. The Germans, and all other European nationalities combined, only added up to 70% of British demand in 2008. Only Russian demand was rising in 2008, but even that may now change in the light of the economic crisis.

British demand in 2009 is likely to have fallen dramatically, thanks primarily to the weak pound and the economic crisis, but even if British demand falls by significantly more than other expat groups, we expect that British will still be the biggest buyers, and that the market won’t recover fully until they are back in force. However the lack of expats buying clearly means opportunities and bargains for those with cash available. Sales of property to non-residents fell to just 3,691 last year, down 60% on 2007, and 80% on 2006.  if correct, these figures suggest that the expat holiday home market imploded in 2008, to almost insignificant niche levels for some of Spain’s most popular coasts, though not Tenerife. There are several good reasons why these figures don’t tell the whole story of British buyers in Spain, but it does give us a good idea of the trend for expat holiday home purchases in Spain, of which the majority are bought by the British.

Several conclusions can be drawn from these figure but the main one is that the market won’t recover fully until the British are back. It’s a pipe dream to hope that the Germans, or Scandinavians, or some other group, are going to step in to shore up the market now the British have gone. I have no doubt that, one day, the British will be back in force. When will that be? Certainly not before the pound recovers, until then those with cash and a keen eye for a bargain may be in a position to make a lot of money in the future!

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

Buyers can take advantage with cash in hand when buying property

March 23, 2009 – 4:57 pm

Cash is currently king when buying property

Cash is currently king when buying property

Despite tight credit lines, buyers have the upper hand in today’s falling market, but only some can take advantage…

Buyers with cash in hand are in the best position to take advantage of the current climate. Vendors are more likely to accept a lower offer on their property from a cash buyer than a higher one that’s subject to obtaining a mortgage. Cash buyers are king.

This is especially true if your cash is in a foreign currency. With no currency to leverage, sterling cash buyers can’t match these savings, but they can get good deals. They may be able to get a better property than they could have previously imagined. Add to this the fact that interest rates have hit an all-time low of 0.5 per cent, making it less attractive to keep money in a savings account, and it’s easy to see why cash purchasers are returning to the market.

In the past couple of weeks, we’ve seen a lot of cash buyers, because they’re not getting enough interest from their savings accounts. Some of them are buying to let because rents, although much weaker than in the past, are still appealing compared to the yield on savings accounts and the uncertainties of the stockmarket. Others are purchasers in their fifties who want to help their children get a foot on the property ladder and know they can now obtain excellent value for money.

Opportunities for investors

Beyond stimulating the cash market, the Bank of England’s sixth consecutive cut in interest rates has also opened up opportunities for mortgage buyers, provided they can persuade banks to lend to them. Cheaper mortgages mean property is once again appealing to investors because the yields are starting to stack up now that interest rates are so low. Buyers need to acquire a property with good rental prospects, because the letting market is very crowded. They must commit to it for the medium to long term, as they’re unlikely to see any capital gains if they resell in the immediate future.

The joint effect of low interest rates and substantial drops in property values can also benefit upsizers. The money they can save on their upward purchase will more than outweigh the money they lose on selling their smaller property.

Top tips to make the most of the market

Cash buyers should be wary of buying with too much emotion, as this may lead to paying more than a property’s market value.Euro and dollar buyers must consider the possible effect of further currency fluctuations, and, if buying to let, assess how much a sterling rent will be worth when they convert it back into their own currency

Sterling investors should be wary of the rental market becoming too saturated

Establish a good relationship with estate agents, as stock is being sold off-market. It’s important to have a rapport with the agents and not just be a name in their database.

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

Tenerife in European promotional campaign to boost visitor levels

November 26, 2008 – 7:31 pm

The Canary Islands Government has launched a £1 million Europe-wide promotional campaign to entice more visitors and prove that the islands have more to offer than just sun, sea and sand…

Tenerife is fondly known as 'The Island of Eternal Spring'

The Islands (Tenerife, Gran Canaria, Fuerteventura and Lanzarote in particular) have always been a favourite of British holidaymakers and second home owners. The British Embassy calculates that nearly four million Britons visit the islands each year, and 60,000 are resident.

Much of the Islands’ income comes from tourism, with Brits providing a large part of that.

Now, as the credit crunch hits the UK hard, hoteliers and restaurant owners on the Canary Islands are concerned that the tourist market may flop, as Brits stay closer to home to conserve cash.

Last year, devastating fires hit the peak tourist season hard, destroying sections of Tenerife and Grand Canaria. This, along with the credit crunch, has led the Canary Islands’ Government to launch a new campaign in a bid to entice more tourists and highlight the many attractions on offer in the archipelago.

Called ‘The Three Stadiums Of Happiness,’ the £1.26 million campaign was launched as an exhibition at the Arsenal FC’s home - Emirates Stadium, in London, last week.

The main aim of the campaign is to showcase the Canary Islands as more than just a hot beach destination, by highlighting the tenets of family, wellness, sea and nature.

The Canary Islands are hoping that visitors that hadn’t previously considered the islands will be attracted to the nature, wildlife and spas, as well as the ever popular beaches.

Tenerife's Mt Teide is the highest peak in Europe at 3,717.91 metres (12,198 feet)

The Tourism Vice-Minister of the Canary Islands, Ms Maria del Carmen Harnandez Bento, said, “The Canaries have always been a popular destination with British holidaymakers, especially given our winter sun and fine beaches. However, this new exhibition presents an opportunity for the islands collectively to highlight another side of life in the Canary Islands to holidaymakers and for us to present a range of other activity options too.”

The announcement of the new campaign follows speeches from the Canarian Government at the recent travel industry event - ‘World Travel Market’ - which underlined the importance of British visitors to the Island’s tourism sector.

However, stand-in Regional Vice-President of the Government of the Canary Islands José Manuel Soria, said the Canaries had ‘no need to worry’ about its principal source of holiday revenue, because the UK authorities had taken solid measures to boost the economy.

“British people have a need to travel,” said Mr Soria, who recalled that Britons spend an average of €97 (£82) a day when on holiday in the Canaries.

Tourism Minister Rita Martín said that if British holidaymakers did not exist, ‘we would have to invent them,’ so crucial is their role to the Canaries’ tourist industry!

By Angela | Posted in Economy, Tenerife | Tagged , , , , , , , , , , , , , , , , , | Comments (0)