Buying opportunities in Tenerife and Spain

December 13, 2011 – 12:10 pm

Property bargains abound in Tenerife and Spain

The recent credit crisis has opened up some superb buying opportunities for buyers seeking a second home in Spain. While prices have fallen typically 25% from their peak.

For example, the Polaris World resorts were made famous by endless TV adverts featuring Jack Nicklaus before the recession hit, now these superb, complete golf resorts have a small proportion of unsold properties which the banks are keen to sell.

Buyers are advised to move quickly as much of the stock made available by the banks has sold in the last twelve months. Prime position property is becoming more difficult to find for buyers and the future of such cut price deals and mortgages remains uncertain with the government bailout of CAM about to result in a sale to a stronger banking group in Spain.

Villa Cashback MD Paul Williams remains cautious about continuing half price deals. “At this stage we don’t know what form a future CAM bank will take and what the pricing strategy of the new banking group will be. What we do know is that a weak CAM bank has so far undercut the stronger banks in pricing their property. Now it’s about to be bought by a stronger institution there’s no guarantee of the property giveaway continuing.”

Brand new apartments are available on resorts such as Hacienda Riquelme where front line golf apartments are available at less than half their original prices. Mortgages of up to 90% are available for overseas buyers. The resort has proved extremely popular with UK and northern European buyers this year.

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

If Spain had kept the Peseta……..

November 18, 2011 – 3:26 pm

If Spain had kept the Peseta would the property crisis have been as bad?

If Spain had kept the Peseta the bubble would never have been so big, claims Max Otte, an economics professor and fund manager who forecast the crisis in a book published in 2006.

Otte explains that low interest rates that came with Euro-zone membership are the root of the problem. Egged on by the banks, Spaniards binged on cheap mortgage credit and drove the property market into a frenzy, making a traumatic bust inevitable.

Given where we are now, Spain would have been better off with higher interest rates and steady growth outside the Euro-zone, argues Otte in comments reported in the Spanish press. The boom years were no worth this bust.

He also claims it’s only a matter of time before Greece abandons the Euro, and recommends that Spain does so too. The Euro has been a waste of time and money, says Otte.

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

Significant fall in property prices according to Tinsa.

November 10, 2011 – 9:39 am

Property prices falling in Spain especially by the coast

According to José Manuel Galindo, President fo the APCE builders and developers association, the fall in property prices, has been “significant”.

Prices are now down a total of 26pc in real terms since their peak, says Galindo, taking into account inflation and a reduction in VAT. When it comes to holiday homes on the coast, however, the falls have been more brutal. Prices on the coast have fallen by 32pc, according to Tinsa, and anecdotal evidence suggests it might even be higher than that.

Galindo stressed that many developers cannot afford to reduce prices any further. “Developers can’t sell below the cost of their mortgage, because they no longer have the money to afford the adjustment,” he explained.

 In the long-run, price will fall to affordable levels, regardless of how much builders or banks have to lose in the process.

Turning to the collapse in sales (down 40pc in August alone) Galindo blamed it on the lack of credit and local “purchasing capacity” and pinned his hopes on foreign buyers heping Spain mop up its glut of close to 300,000 unsold new homes on the coast.

He also described the recent Government led road show to promote Spanish property around Europe “rather ineffective”.

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

Euribor rate falls again.

October 17, 2011 – 12:31 pm

Euribor rate falls again affecting property sales in Tenerife

Euribor (12 months), the interest rate normally used to calculate mortgage repayments in Spain, fell for the second month in a row to 2.067pc in September, a percentage fall of -1.4pc on the previous month.

The rise of Euribor seems to have topped out, at least for the time being. With markets still fretting about a European debt crisis, expectations of rising interest rates have fallen, taking the heat off Euribor rates. The European Central Bank has said it has no plans to raise (or cut) the base-rate any further. It now stands at 1.5pc.

The monthly fall will not be much comfort for those with an annually resetting mortgage. Euribor is now 45.6pc higher than it was 12 months ago, meaning repayments on the average mortgage will rise by 480 Euros/year.  It was way too low between 2002 and 2006, sparking off an insane boom in Spanish real estate. It rose in 2007-2008 as other European economies and inflation started to grow too fast , but was slashed in 2009 to head of a depression. It made a feeble attempt to rise again this year, but that has run out of steam with the economy. It is now back around 2pc – way below what it should be in normal times.

But right now the problem is not so much the Euribor rate, which is historically low,  it is that banks don’t seem to want to lend at any rate, starving the housing market of credit without which it cannot recover.

New mortgage lending fell 47pc in July (to 29,523) compared to the same month last year, the lowest level recorded since this data series started in 2003.

The average residential mortgage value was €110,604, 9pc down on last year. All of which means less money around to fuel demand for Spanish property, putting further downward pressure on prices.

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

Only 15 billion Euros required to clean up Spain’s balance sheets

March 22, 2011 – 1:01 pm

Spain’s banks will need just 15 billion euros ($A20.69 billion) to clean up their balance sheets, the Central Bank said Thursday, rebuffing predictions by Moody’s which sliced the country’s’ credit rating hours earlier.

The shortfall, which concerns a total of 12 banks, was less than the government’s ceiling of 20 billion euros — and well below the forecast by Moody’s ratings agency of 40-50 billion euros. The Bank of Spain’s report responded to tough government measures unveiled last month that require banks to raise their minimum levels of core capital in a bid to shore up confidence in financial institutions and the wider economy. 

Under the new regulations, the banks must raise the proportion of core capital they hold to 8.0 per cent of total assets from the current six per cent, or 10.0 per cent if they are unlisted. Those that have fallen short had to reveal by March 10 how much they need to raise to meet the new requirements.

“Overall, 12 banks must increase their capital, for an amount totalling 15.15 billion,” the Bank of Spain said in a statement.

Source: Sydney Morning Herald

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

How to avoid foreign exchange pitfalls.

August 7, 2010 – 10:08 am
Avoid fees when exchanging money in Tenerife, Spain or the Canary Islands

Avoid fees when exchanging money in Tenerife, Spain or the Canary Islands

Families going abroad this summer are being warned that they could lose hundreds of pounds exchanging their money at the airport bureau de change.

Currency prices can be up to 9% more expensive at Gatwick, Heathrow and Stansted compared with other foreign exchange outlets, a survey has revealed. This means a family changing £1000 for a European holiday are £104 worse off buying euros at the last minute, rather than ordering in advance from a specialist firm which can find the best available rate. The company surveyed exchange rates for euros and dollars at bureaux de change at Gatwick, Heathrow and Stansted airports and also checked high street deals on offer at the Post Office and Marks & Spencer.

Over 14 million Britons went on holiday abroad between July and September 2009. If half of these travellers exchanged just £500 spending money at an airport bureau de change before going on holiday to Europe, they could be saying goodbye to £493 million pounds.

Specialist providers apart, the best exchange rate for buying euros was at The Post Office Phil McHugh, senior foreign exchange dealer said: “Our survey highlights the big difference in currency exchange rates offered between the high street, airport bureaux de change and specialist providers.

“People often plan their foreign holidays well in advance, shop around for the best deals and book early to save money, yet they seem to leave their common sense at the airport drop off when it comes to changing holiday cash.

“Travellers should take a few minutes to check exchange rates online or over the phone in advance of their holiday and arrange with a foreign exchange specialist for their money to be delivered to their home or work, saving themselves time, hassle and cash in the process.”

Tips for those coming to Tenerife regarding currency exchange include,  think ahead about your currency needs and avoid changing your money at bureaux de change, particularly at airports. Shop around for the best rate – don’t just automatically go to your bank or post office. Specialist providers can offer much better deals. Beware of hidden charges and high commission rates. A good headline rate does not necessarly mean the best value for money.  Avoid poor exchange rates by taking travellers cheques or currency cards with you instead of using credit or debit cards for large purchases. Travellers cheques or currency cards can also help avoid the hefty fees banks and credit card companies charge for using ATMs overseas.

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

Real estate sector won’t recover until mid-2011 says Bank of Spain

July 4, 2010 – 5:15 pm
Real estate in Spain, Tenerife and the Canary Isles still undergoing a recovery

Real estate in Spain, Tenerife and the Canary Isles still undergoing a recovery

The Bank of Spain (BoS)  says the real estate sector in Spain, Tenerife and the Canary Isles,will remain in recession until mid-2011 at least.  Spain’s economic miracle of the last decade was largely built on an unsustainable bubble in the real estate sector. When that bubble burst, as it did in 2008, it sent the Spanish economy into a tailspin. In a new report released last week the Bank of Spain now says the real estate sector won’t start to recover until mid-2011, casting doubt on recent press reports suggesting a housing market recovery is already underway. Cheap credit sent property prices and housing starts through the roof. It was never going to last for ever, but the credit crunch made sure that it came to a particularly brutal end. When credit crunch struck, the house of cards collapsed. The BoS says that the “correction” is not yet over . “Residential (housing) investment will continue contracting until the middle of 2011,” says the report. In 2007 it peaked at 7.5% of GDP, way above the OECD average. Next year the BoS forecasts it will fall to 4%. At that point, residential investment as a percentage of GDP will have fallen below the minimum it reached in 1994, during the last recession.

All of which is bad news for the Spanish economy, dependent as it was on the real estate sector for jobs and growth. “The housing market adjustment has sever macroeconomic implications in the context of the recession,” says the BoS report. As a result of the property crisis, the sector has shed 2 million jobs. The BoS says that, by the time this drama is over, the property crash will have reduced the Spanish economy by 5.4% compared to the end of 2007.

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

Weak economic growth in Spain

March 6, 2010 – 12:42 pm
Weak economic growth in Spain and Tenerife

Weak economic growth in Spain and Tenerife

Credit ratings agency Standard & Poor’s warned Spain that its weak economic growth prospects could undermine its plan to rein in its budget deficit, making a debt downgrade even more likely. Investors are increasingly worried about Spain’s budget deficit – and skeptical about the government’s ability to push through sharp cutbacks to right the situation.

The government has announced both tax rises and spending cuts – not all yet specified – to reduce its deficit back towards the 3 percent limit that euro rules prescribe.

In a statement, S&P said Spain’s deficit would likely remain above 5 percent of the country’s gross domestic product through to 2013 against the government forecast of 3 percent, and that as a result the debt burden could rise to above 80 percent of GDP by 2012.

S&P said it also expects much weaker economic growth than the Spanish government and that there was a “significant implementation risk” with regard to the current plan to reduce the deficit, which is estimated at 11.4 percent of GDP in 2009. Spain, which has still to get out of recession, is expected to grow by an average annual rate of 0.6 percent between 2010-13, according to S&P, way down on the Spanish government’s forecast of 1.5 percent.

S&P said it saw downside risks relating to the government’s revenue collection assumptions in particular, largely because Spain’s tax base is “highly sensitive” to domestic demand and has been sensitive to the real estate sector, which has collapsed over the last couple of years. “Neither of these sources is likely to be a strong contributor to revenue growth over the next several years,” S&P said.

S&P said it was maintaining its negative outlook on Spain’s double A+ rating, which it assigned in December, in the absence of “more aggressive and tangible actions” by the authorities to tackle Spain’s economic and fiscal problems.

“Any deterioration over and above our current expectations could put further downward pressure on the ratings,” S&P said.

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