Housing glut to shrink to manageable level by 2013 says Spain’s Ministry of Finance

May 5, 2011 – 10:13 am

Housing glut lasts in mainland Spain but improves in Tenerife and the islands

In a drive to reassure international money markets that Spain can deal with its real estate problems, the Ministry of Finance has claimed that Spain’s infamous housing-glut will shrink to a manageable level of 200,000 homes by 2013.

For that to happen Spain will have to sell 900,000 new homes between now and then (300,000 per year), whilst building around 175,000 new homes on average per year. In the chart above, the dotted line forecasts the new housing inventory in 2013.

Some experts have raised doubts that the market will be able to digest 300,000 new homes per year, bearing in mind that resale transactions must also be taken into account.

According to the latest figures from the Government (Fomento) and the property register, analysed in an article by El Confidencial, the net change in the number of new homes on the market over the latest 12 months was a decline of just 30,000, way below Government estimates for the next few years. If that rate continues it will take several years longer to digest the glut. The Government also produced an analysis of the relationship between price falls and the stock of new homes on the market in different areas.

 Madrid and coastal provinces of mainland Spain, where most holiday-homes are located, tend to have the largest gluts and price falls. However the islands such as Tenerife and Majorca have seen an upturn in prices this year

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

A good time to buy in Tenerife?

January 17, 2011 – 9:45 am

Bargains abound so this could be a good time to buy prime property in Tenerife

During Spain’s runaway housing boom of the last decade, tens of thousands of new homes were built on the coast with foreign buyers in mind. Unfortunately, foreign buyers didn’t  buy in expected numbers, which partly explain why Spain has such a glut of new homes on the coast.

The number of purchases of holiday-homes by foreigners have reduced considerably. They are down 87pc in the first 9 months of the year compared to the same period in 2006, and -16pc Q3/Q2 . At this rate foreigners buying holiday homes will do nothing to help absorb Spain’s glut of new homes. The figures are difficult to believe, just 490 sales in 3 months over the summer. Hopefully the  figures are not accurate, but if they are who will buy all those empty holiday-homes?  Certainly not the  vast number of unemployed Spaniards.

It is clear that vendors in areas such as Tenerife have realised that  in order to achieve a sale, the price needs to be right and so they have made the necessary ajustments to the sale cost. In fact, with the number of bargains now around in Tenerife and the Canary Islands, this is probably a good time to consider purchasing a second home or a property to rent out for income purposes. If you buy good quality prime property in a  coastal location, you could do  well.

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

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)

Canarian property prices improving according to TINSA

June 14, 2010 – 4:56 pm

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

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

Protected coastal areas in Spain under threat

August 11, 2009 – 8:46 pm

A new report from international eco campaigners Greenpeace, Destruction at all Coasts 2009, says up to 8,000 kilometres of coast are threatened. It looked at 233 protected areas and found that 120 of them are under threat from construction, pollution or infrastructure.

Spain's coastline under threat?

Spain's coastline under threat?

Environmentalists are warning that many protected coastal areas in Spain are under threat from property development, some of which they claim is illegal.

The report also indicates that the world economic downturn, which has hit the Spanish property market hard, has not, however, acted as a buffer to protect endangered areas as there are some 562,000 properties, 29 golf courses, 51 harbours and 14 commercial centres either under construction or have planning approval in protected areas.

Spain’s coastlines have become a cemetery of cement and the last few remaining protected parts are in extreme danger of disappearing,’ said Greenpeace’s director in Spain, Juan Lopez de Uralde.

The report shows that Andalucia, Valencia and the Canaries are the worst. Some 21 areas are under threat in Andalucia including La Albufera Natural Park, Cabo de Gata-Nijar Natural Park and Grandilla.

It also points out that Spain has more legal proceedings open for abuse of the environment than any other country in the European Union.

Greenpeace wants the Spanish Government to tighten the country’s coastal law, to buy up protected land promise to demolish illegal buildings. Pilar Marcos, who is responsible for the Greenpeace coastal campaign in Spain, said that the organisation has noted 625 suspects in 478 cases of planning corruption and that more than half of these suspects hold public office in Spain.

Greenpeace also says that Spain had taken no steps to stop the deterioration of its coastline in recent years and done little to upgrade sanitation infrastructure and water treatment on the coast to keep up with development development needs, Greenpeace said.

‘Local Governments get most of their income from taxes and fees associated with building and construction, something which fuels the deterioration of the coastline. Solutions have not been applied by practically any institutions who are more concerned with short term benefit than the kind of future inherited by coming generations,’ the report said.

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

Brits still keen to buy property abroad says survey

August 9, 2009 – 10:41 pm
Brits and Europeans still keen on property in Tenerife and Spain

Brits and Europeans still keen on property in Tenerife and Spain

Results for the 2009 International Survey conducted by primelocation.com show that 70% of visitors to their site are actively looking to buy an overseas property, despite the current economic uncertainty. Of all respondents, 28% said that they are unaffected by the current economic situation, 22% who had delayed their plans because of the economic climate are now back in the market and hope to find a bargain, while 10% said that they are checking out the market but will not proceed just yet

Ann Wright, International Business Development Manager for primelocation.com, says; ‘This is very clear indication that people have not let go of their dreams of owning a property abroad. Indeed, it is encouraging that people are coming back to the market, possibly because of recent press reports of falling property prices across Europe.’

The primelocation.com 2009 International Survey also monitored the countries the portal’s visitors are most interested in buying in; France took top spot with 25%, Spain came second (16%) and was followed by Italy and Portugal which tied in fourth place with 11% each. The United States, Cyprus, Greece, Switzerland, Turkey, Canada and the UAE took the rest of the top 10 spots.

‘It is interesting to note that over a quarter of all respondents currently own/rent a property in France and interest in the country, which has always been the first choice amongst Brits, has remained fairly stable at 25% since 2008. Spain  and Tenerife has increased in popularity since 2008 as people respond to the reports of falling property prices.

“The percentage of people looking to buy holiday homes overseas remains unchanged from last year’s survey (48%), which reinforces the notion that interest is still there despite the worsening economic conditions, “ continues Wright. “However, the number of people moving abroad permanently has decreased; this is possibly a result of the fluctuations in the value of sterling against the Euro. Also, property prices and the oversupply of rental properties in continental Europe mean fewer people are buying with a view to using the property as an investment or income generator.” Not surprisingly, coastal locations are ranked No.1 by all respondents who are currently looking to own or rent an overseas property, followed by tranquil village settings.

‘Planned spending levels are very similar to 2008, which further strengthens the notion that interest in overseas properties has not been significantly impacted by the economic climate. Also similar to last year’s survey results, most respondents said that they want to buy a property that requires minimal work, buyers want somewhere they can start to use and enjoy straight away,’ concludes Wright.

Primelocation.com 2009 International Survey also found that buyers prefer to use an estate agent in the country in which they are buying. UK based agents are also popular because they give the buyer the reassurance of an English speaking service and expert, reliable advice of the processes of buying abroad.

The survey results also indicate that buyers start their search on property portals, which give them access to a wide range of estate agents both in the UK and abroad. Once they have narrowed down their search they are happy to use the services of estate agents who have properties that fit their requirements.

By Angela | Posted in Economy, General, Holiday, Inspirational, Miscellaneous Articles, Property, Tenerife, Things to Do, Uncategorized | Tagged , , , , , , , , , , , , , , , , , , , , , , | Comments (3)

Property prices begin to stabilise in Spain and Tenerife

July 27, 2009 – 12:49 pm
Property prices stabilising in Tenerife and Spain

Property prices stabilising in Tenerife and Spain?

Spanish property prices fell by 9.8% over 12 months to the end of May, according to the latest Spanish property price index published by Tinsa, one of Spain’s leading appraisal companies.

For what they are worth, the figures represent a slight improvement on the previous month, when prices fell by 10.1%. It could be a sign that the slide in prices is beginning to stabilise, though more months will have to pass before we can call a trend.
Once again, coastal areas were the hardest hit, thanks to the concentration of second homes in those areas. Average prices in coastal municipalities fell by 12.8%.
House prices in the suburbs fell by 9.6%, and by 9.8% in The Balearics and The Canaries.
The problem with Tinsa’s figures is that, like the government’s figures, they bear little relation to the real world, where prices are down by at least 20% to 30% and again this may be the best time for those with cash to grab that bargain property in sunny Tenerife.

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