Moody’s downgrades 16 Spanish banks

May 18, 2012 – 8:54 am

Banks in Spain and tenerife downgraded by Moody's as a result of Euro crisis

Credit rating agency Moody’s has downgraded 16 Spanish banks including two of Spain’s biggest lenders, the Banco Santander and Banco Bilbao Vizcaya Argentaria (BBVA).

According to a statement from Moody’s, nine banks were cut three notches and seven were kept on review of the agency for further downgrades.  Spain’s borrowing costs shot up at a bond auction on Thursday, after economic data confirmed the country is back in recession and reports of an outflow of deposits from nationalised Bankia hammered its share price.

According to official data, Spain is in recession recording a 0.3 percent contraction in the economy in the first quarter. Moody’s cited bad loans, recession, funding access worries, real estate crisis, high unemployment rate and lower credit worthiness of the government as the reasons for the downgrade. “The Spanish economy has fallen back into recession in first-quarter 2012, and Moody’s does not expect conditions to improve,” the credit rating agency said in a statement. “Banks will continue to face highly adverse operating and market funding conditions that pose a threat to their creditworthiness,” it added.

The agency has also cut the ratings on Santander UK, a subsidiary of Banco Santander, the eurozone’s largest lender. Santander UK maintained that the downgrade would not have any impact on its operations.

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Monthly planning approvals at record lows

May 16, 2012 – 1:07 pm

Monthly low for new builds in Spain and Tenerife

Monthly planning approvals for new homes are close to record lows, and might create a shortage in the next 5 years. There were just 4,600 planning approvals for new homes in February, down 44pc on the same month last year, according to the latest figures from the Government (Fomento).

Compared to February 2006, when Spain’s building boom was in full swing, planning approvals are down 93pc. That shows how badly the Spanish house building industry has been hit . From being the driver of Spain’s economy it has collapsed to almost nothing, which helps explain why unemployment is close to 25pc and heading for 30pc.

As a result of the collapse in planning approvals, there will clearly be a shortage of newly built homes in the next 3 to 5 years. This despite the fact that there is a glut of something like 750,000 newly built homes on the market today.

The problem is that many of those homes are typical of what gets built at the peak of a boom, badly built too quick, in undesirable locations with scant regard to what house buyers actually want. There is always a demand for new homes, that are properly built and well located. 

It is best to try to buy off-plan in the depths of the bust, not at the peak of the boom, though, most people do the opposite.

People  want  better designed, better built, more generously sized, more energy efficient, better located, and significantly cheaper homes than are on offer. As there are hardly any developers left standing,we are clearly going to see a shortage of such properties in Spain and Tenerife in the future.

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Spanish banks hopeful of interest in property portfolios

May 4, 2012 – 8:42 am

Economy Minister, Luis de Guindos is hopeful of property sales in Tenerife and Spain

Spanish banks are hopeful that investors will show strong interest in the real estate portfolios they are selling, as long as the prices are right. The Bank of Spain recently announced that Spanish banks held a total of €308 billion in real estate portfolios, with 60 per cent of these classed as “troubled” assets.

The country’s Economy Minister, Luis de Guindos, said last week that new guidelines will be introduced to enable the banks to transfer the real estate into asset management companies, which will then be controlled alongside third-party investors.

“The key element is going to be transparency and valuation,” he told Bloomberg,adding that no financial assistance would be provided. The minister added that he expected Spain’s economy to return to growth in 2013.

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More misery for the Spanish property market?

May 2, 2012 – 12:54 pm

More property investment misery in Tenerife and Spain?

The Spanish property market faces more misery with average residential prices expected to fall by a further 18% before finally bottoming out, according to Barclays Capital. The British investment bank says that the decline in values will add to the 22% price drop witnessed since the Spanish property market crashed in 2008. The bank’s latest report claims that Spanish home prices will drop by up to 35% before reaching the bottom of the downturn. But the reality is that property price falls nationwide have been far steeper and have already depreciated by 40%, on average. In fact, this rate of fall has been confirmed by Spain’s Minister for the Economy, suggesting that Barclays Capital’s data is largely unreliable. “So Barclays Capital are right to say that prices might fall 40% in total, but wrong to say that means another 18% of declines to come,” says Spanish property commentator Mark Stucklin. “We are already almost there [at the bottom], certainly when it comes to holiday homes on the coast.”

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Spanish villas still popular with investors

April 2, 2012 – 1:13 pm

Villas in Tenerife and Spain still popular with overseas investors

Buyers from the UK are continuing to look towards Spain for possible investments in the property market abroad.

This is according to Rightmove Overseas, which has reported that properties such as villas in Spain are the most popular with those searching the web.

In fact, the country accounted for more than one-fifth (22 per cent) of searches made on the portal over the past month and head of Rightmove Overseas Shameen Golamy said: “Despite nervousness around the Spanish economy in recent weeks, property buyers are undeterred.”

During the month under analysis, 51.45 per cent of locations witnessed a climb in interest, with Spanish destinations Fuertuventura, Valencia, Benalmadena and Torrevieja all seeing a jump in searches of more than 20 per cent.

Website ipsbm.com has reported villas in Spain and Portugal are continuing to prove popular with property buyers despite uncertainty in the eurozone, claiming most people prefer what is familiar and so are looking towards locations such as the Costas and the Algarve.

Source: Rightmove Overseas

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House prices have fallen 35% since peak

March 8, 2012 – 12:08 pm

Property prices fall by 35% since peaking Spain and Tenerife

Luis de Guindos, the Economy Minister, says house prices have fallen 35pc since the peak, much more than official figures suggest.

According to an article in the Spanish daily El Pais, de Guindos says it is his “impression that finished housing sells at a discount of 35pc compared to prices before the crisis.”

That’s not enough for De Guindos, who has introduced financial-sector reforms forcing banks to make bigger write-downs on their properties, with the stated objective of bringing down house prices.

De Guindos has criticised banks for only lending to buyers of their own properties to “maintain the fiction of the value of their properties,” something he hopes his reforms will discourage.

The reforms introduced by De Guindos had an immediate impact on vendor expectations, with a 30pc increase in asking price reductions (by an average of 9.5pc, or €26,200) in the week after De Guindos announced his banking reforms, according to figures from Idealista  a property portal

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Sterling high good news for Brits buying property in Tenerife and eurozone.

January 27, 2012 – 10:55 am

Sterling high against the Euro a boost for property buyers in Tenerife and Spain

There was good news for Brits seeking to buy property in the eurozone as sterling reached a 15-month high against the euro currency. The euro’s value depreciated against the UK pound on the back of fresh concerns regarding the the health of the eurozone’s banking system.

Sterling increased by 0.73% to €1.208 on Wednesday  its highest level since September 2010. The euro also fell 0.95% against the dollar to $1.293. Despite concerns about the fragile state of the UK economy, it is generally considered to be doing better than the Eurozone, which is struggling with a major debt crisis.

Geoffrey Yu, currency strategist at UBS, told Reuters: “Maybe the UK is approaching a consensus (for a recession) but it’s not there yet. And there’s no break-up risk, so people are more willing to allocate funding from a passive perspective at the start of the year.”

However, despite the recent recovery in the strength of the pound versus the euro, some currency experts do not expect sterling’s value to increase much further in the short- to medium-term.

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

Bargain homes in Spain prove popular with international buyers.

January 26, 2012 – 10:05 pm

Bargain hunters in property are investing in Tenerife and Spain

Overseas nationals spent €3.6bn (£2.3bn) on buying homes in Spain in 2011, as they took advantage of significantly discounted properties, according to data supplied by the Bank of Spain. The figures show that foreign property investment in Spain increased by 27% last year compared to the preceding year.

With Spain’s economy in turmoil and the housing market in disarray, owed largely to a major oversupply of homes, property prices have been in freefall, attracting more bargain hunters in the process. The hike in property sales in 2011 marks a second consecutive year of growth in international investment with 2011 beating the total value of transactions in 2010.

Many property professionals believe that the rise in foreign investment activity is a sign that property market conditions are improving. Spanish journalist Daniel Talavera  believes that the Spanish property market is now touching rock bottom of the downturn.

“2011 has probably been the worst year in terms of property prices and sales drop. If the price fall in 2010 was by 3% compared to 2009, the mentioned fall of 6.85% in 2011 compared to 2010 confirms that the market is reaching its lowest at the right speed.”

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Spain’s central bank forecasts contraction of 1.5% this year

January 23, 2012 – 4:14 pm

Spain's Central Bank expects contraction of 1.5% this year

Spain’s central bank on Monday forecast that the country, which is struggling to slash its deficit and debt, will fall back into recession this year with a contraction of 1.5 percent.

The Bank of Spain said however it expects Spain’s economy to make a modest rebound in 2013 with growth in gross domestic product (GDP) of 0.2 percent. It added that it estimates the economy to have grown by 0.7 percent in 2011.

“In 2011 the modest recovery which the Spanish economy began a year earlier weakened as the eurozone sovereign debt crisis extended to a greater number of countries and financial market tensions strengthened,” it said in a report. Source: Google.com

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Second increase in CGT for non resident property owners in Spain

January 5, 2012 – 4:56 pm

Spain and Tenerife property owners hit by CGT rise.

A second increase in the Capital Gains Tax (CGT) levied on non-residents by the Spanish Tax Office has just been announced.

From January the 1st 2012 CGT for non-resident property owners in Spain will stand at 21% across the board. This follows a previous rise in 2010 from 18% to 19%.   In 2007 the European Union put pressure on Spain to lower the then CGT rate of 35% for non residents (15% for residents) to 18%  deeming it to be an unfair penalty on non-residents. A rise of 1% in 2010 passed relatively unnoticed but a  trend towards accelerating tax increases to boost the dwindling economy.  

Spanish Residents will also feel the increase with figures rising to 21% up to 6000 Euros , 25% between 6001 Euros and 24000 Euros and 27% on higher figures.

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