Bankinter’s latest report on Spanish housing market.

December 1, 2011 – 9:57 am

 

Bankinter's latest report suggests that Spanish house prices will fall again

According to Bankinter’s latest report on the housing market in Spain, housing prices will fall an additional 6% up to the end of 2013, making an adjustment of 30% in real terms from their peak, and only begin to rise again in early 2014, when the economy is capable of generating employment and demand recovers.

With regard to their forecast made last April, the financial institution have deferred for a year the adjustment in the housing sector, saying that promoter activity will not take off until the last quarter of 2014, when the housing ‘stock’ will have reduced to below the 500,000 mark.

Until then, only discounts and minimum production, will “very slowly” digest a ‘stock’ of houses which now stands at, they estimate, between 850,000 and 900,000 homes, of which about 200,000 or 250,000 belong to financial institutions. Bankinter sees the two years ahead with demand at minimum levels because of high rates of unemployment, which in 2011 alone saw home sales plunge to around 200,000 new properties, which was 55% less than what was sold in 2007, the year with the highest recorded demand in history (412,000 homes).

Bankinter’s calculations suggest that the Spanish economy will grow 0.7% in 2011, half of what the Government anticipated  1.2% in 2012 and 1.6% in 2013, below the 2% needed to create jobs, reported Cinco Dias.

Source: Kyero.com

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

INE say sales down in September

November 21, 2011 – 10:25 am

House sales down say INE

There were just 22,065 home sales in September (excluding social housing), 30.5pc down on the same month last year and 62pc down on September 2007, according to the latest figures from the National Institute of Statistics (INE).

Monthly sales this year since March have been the lowest since the crisis began. The positive start looks like a dead-cat-bounce. On a year-to-date basis sales in 2011 are 20pc below last year, and 56pc below 2007. The big question is can it get any worse in 2012?

Sales have been bad this year, falling by as much as 40pc in August, with an average annualised fall of 29pc each month since March. the market is shrinking fast, a clear sign that prices are still too high.

All this at a time when Spain is saddled with a monumental glut of homes for sale, not to mention unemployment of 22pc and rising. More than 40pc of young Spanish adults are out of work. Demographics are also starting to blow against the Spanish economy.

Unless the newly elected  Government takes radical steps to liberalise the economy, boost employment, and force banks to stop keeping property prices artificially high, it’s hard to see a way out of this mire.

What about holiday homes? The situation is a bit different because demand is internationally diversified, at least in some areas such as Tenerife. Some quality segments of the holiday home market will recover before the overall housing market. That said, this year and next year will be very tough.

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

Luxury property success in Spain

October 12, 2011 – 9:01 am

Luxury property selling well in Spain and Tenerife

A luxury Spanish property agency has reported its most successful ever quarter in the three month period from July to September.

Lucas Fox International Properties sold €19.5 million-worth of luxury Spanish real estate in 2011’s third quarter, its best performance since opening six years ago.

Lucas Fox sells properties in Barcelona, Costa Brava and Ibiza.

Alex Vaughan, Director of Lucas Fox, said that recent rich buyers continue to enter the market despite recent negative comments. Personally, I can’t wait for them to start selling luxury properties in Tenerife, that will hopefully inject much needed cash into the local economy

Source: OPP

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

VAt on new homes slashed

September 29, 2011 – 9:51 am

Vat slashed on Tenerife and Spanish homes

VAT on new homes will be slashed from 8pc to 4pc for the rest of the year, José Blanco, Minister of Public Works and Housing announced this week.

The VAT reduction will only apply to sales of new homes that take place before 1 January 2012. Someone buying a new home for 200,000 Euros before the end of the year from a bank or developer will pay 8,000 Euros less in VAT.

Resale properties will not benefit because they do not incur VAT. Anyone buying a resale from a private vendor will continue to pay a transfer tax of 8pc, rather than VAT at 4pc.

However, at least one savings bank – Catalunya Caixa – has announced that it will also offer a 4pc discount on all its resales (repossessed homes) between now and the end of the year. Others banks are expected to follow suit.

The Government’s stated objectives with this latest measure are to help reduce the stock of new homes for sale, giving the construction sector a boost and stimulating employment.

According to José Luis Rodríguez Zapatero – the Prime Minister  said “if it wasn’t for the construction sector, the Spanish economy would be growing at 2pc. All the jobs lost today are in construction.”

Elena Salgado, Minister of Finance, said the reduction in VAT will be “sufficient to reduce the stock of homes.”

As recently as July last year, the Government increased VAT on new homes from 7pc to 8pc in an attempt to increase revenues and reduce the budget deficit. This is a U-turn that hardly covers the Government in glory.

If the fall in VAT does anything to stimulate the market it will only benefit those with new homes for sale, principally developers. As a result, private vendors will find themselves under further pressure to reduce their asking prices.

The opposition Popular Party has promised to extend the rebate for an extra year if it wins the general election in November.

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

No VAT increase in Spain says Salgado

June 30, 2011 – 8:55 am

No VAT increase in Spain, Tenerife and the Canary Islands

The Government’s financial vice president, Elena Salgado, has responded to the suggestion of the Bank of Spain to raise VAT in order to generate more revenue, by saying that the Government “will not increase VAT, since it would have a negative effect on consumption”, as was argued at the European Commission. “To be clearer, the Government will not increase the VAT,” she added.

At a press conference to present the Ministry of Development’s advertising campaign on rehabilitation, Salgado said that “fiscal policy is the responsibility of the Government which then must be approved by Parliament”, to which she added that Government revenues are behaving as expected, and “it is not necessary to raise VAT to achieve fiscal consolidation.”

In the same vein, she praised Brussels’ decision to back down in its request to raise Spain’s tax as a counterweight to a reduction in social contributions, and stressed that the European Commission has been “sensitive” to the Government’s arguments. At this point, Salgado also rejected the possibility of reducing social security contributions, stating that “we should wait a bit before taking steps in that direction,” at least to see how the pension reforms progress.

On the other hand, asked about the proposal of the bank run by Miguel Angel Fernandez Ordonez to set expenditure ceilings in the Autonomous Communities , the Minister of Economy stated that “the regions themselves must decide” if they set an expenditure ceiling, given their “financial independence.”

Source: Kyero.com

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

Spain’s economy is showing signs of recovery.

April 8, 2011 – 9:08 am

Spain’s central bank Governor Miguel Angel Fernandez Ordonez predicts the economy in Spain and Tenerife will improve

Despite the government’s best efforts, Spain’s economy is only giving signs of a very moderate recovery, and remains hindered by recent falling property prices. A significant rebound would only come with an upward movement in activity in the real estate sector which is still in its infancy.

In a welcome bout of openness, Spain’s central bank Governor Miguel Angel Fernandez Ordonez said Tuesday the reform of Spain’s savings banks, saddled with bad property loans like no other, should have taken place sooner.  The damage from Spain’s property problem  has left savings banks, which account for close to half of Spain’s banking business, unable to provide credit to the economy. That, combined with soaring unemployment tied to builders being left with nothing to build, has left Spain’s economy as key European underperformer. According to data released Tuesday, the purchase managers’ index for Spain’s services sector dipped back to negative territory in March, to 48.7, from 50.8 in February, indicating a decline in activity. That compares with a rise in the overall services PMI for the euro zone, to 57.2 from 56.8 in February.

Source: Wall Street Journal

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

Eurozone growth forecast

November 22, 2010 – 10:09 am

Positive forecast for Euro zone may assist Tenerife's property market.

The eurozone economy has been forecasted to grow twice as fast in 2010 than previously predicted due to it being on a more solid footing, according to the European Commission.

In its twice-yearly interim economic forecasts for the 27-nation EU and the 16 countries using the single currency, the EU executive said it now expected the euro zone to grow by 1.7% this year, rather than the 0.9% it forecast in May and up from a 4.1% contraction in 2009.

Olli Rehn, Economic and Monetary Affairs Commissioner, said: “We now have solid ground under our feet. We have started scoring again, but there is no reason to shout for victory. We must remain alert and vigilant.”

The Commission’s forecast compares favourably with projections by the European Central Bank which stated on September 2nd that it expected euro zone growth to be between 1.4 and 1.7% this year.

Rehn said: “The European economy is clearly on a path of recovery, more strongly than forecast in the spring, and the rebound of domestic demand bodes well for the job market. However, uncertainties remain and safeguarding financial stability and continuing fiscal consolidation remain key priorities.”

The Commission said risks to its forecasts were broadly balanced. Among the negative risks, it saw high debt levels and lingering tensions in sovereign debt markets.

On the positive side, it listed the impact from fast German growth into other EU countries and stronger domestic demand.

Source: www.property-investor-news.com

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

Notary fees cheaper in Spain after government cuts

June 5, 2010 – 5:20 pm
A reduction in notary fees on property purchases in Spain and Tenerife

A reduction in notary fees on property purchases in Spain and Tenerife

The government has announced a 5% reduction in notary and registry fees on property deeds as part of a package of measures to reduce the deficit and stimulate the economy. Notaries and Registrars are upset at this attack on their earnings, whilst house buyers will hardly notice the difference the savings are so small.

How big a saving will that 5% reduction in notary and registry fees give the average home buyer in Spain? Between €35 for a property costing €150,000, and €45 for a home costing €300,000, according to calculations done by Idealista.es, a Spanish property portal. Almost insignificant really.

Notaries and registrars are upset as the latter’s fees are already down by 50% thanks to the slump in property transactions.

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

Knocking down British expats houses hurting Spain’s economy

May 22, 2010 – 5:36 pm

Knocking down expats homes is damaging the Spanish economy

Knocking down expats homes is damaging the Spanish economy

A Foreign Office minister warned Spain on Sunday that knocking down British expatriates’ houses was hurting its economy.

Chris Bryant, Minister for Europe, said that the country was undermining efforts to create a recovery in its beleaguered housing market. He was speaking yesterday during a visit to south-eastern Spain to meet British expatriates who have been told that their homes will be bulldozed after Spanish authorities declared their construction illegal. The authorities there have been waging a campaign against former officials accused of allowing overdevelopment of coastal regions. Local governments issued building licences for the properties, but these were later nullified following court action instigated by a higher regional government.

Mr Bryant cautioned: “The housing market in Spain is not going to recover quickly if pictures of bulldozers knocking down expats’ homes are appearing in British newspapers. Everyone I’ve spoken to in Spain says they want to find a solution but wanting a solution and getting one are two different things.”

He said: “Obviously it’s not for the British Government to tell the Spanish what to do. But I’m pushing the message hard at all government levels that I meet here that they have got to put political willpower into these problems, whether it’s an amnesty, whether it’s a change in the law, whatever the solution is that is needed. That is the point I am pushing. I have to say also that there is an enormous difference between the Britons who just make a cursory legal deal – that is always ill advised – and those who have done everything they should or could have done but still find themselves in deep trouble.”

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