Average price of a home fell by 11.5% in March compared to last year

April 18, 2012 – 9:43 am

 

Property prices continue to slide in Tenerife and Spain

Vendors have been forced to slash property prices across the country in order to have any chance of realistically attracting a serious buyer, but with the well documented Spanish property crash showing no sign of abating, prices look set to fall further.

Despite claims from some estate agents and developers in Spain that market conditions are improving, it would seem that they are actually getting worse.

The average price of home in Spain fell by 11.5% in March compared to the corresponding month last year, according to Spain’s most widely-watched annualised House Price Index compiled by Tinsa, a leading property valuation firm. The annualised decline in Spanish property is the highest since the housing crash got underway over four years ago.

Spanish home prices have, on average, now dropped by 28.6% since the crisis started in December 2007 and by 35% along the coast, where the greatest glut of homes are located.

Advisory firm R.R. de Acuna & Asociados recently projected that the average price of a home in Spain will fall by 12%-14% this year – the most since the National Statistics Institute started tracking values in 2007.

Fernando Rodriguez de Acuna Martinez, a partner at the advisory company, said: “There will be more serious price drops this year because of the government decree.” What  could happen to prices beyond 2012? With unemployment standing at 23%, which is higher than Greece, and given that Spain is deep in a recession, with greater austerity measures to come, it would appear that prices still have a long way to fall.

Bankinter estimates that housing prices will fall an additional 6% to the end of 2013, but the reality is that the decline is likely to be greater and for longer.

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

Banks forced to sell properties in Spain cheaply.

April 5, 2012 – 3:09 pm

Banks forced to sell properties cheaply in Spain and Tenerife

Banks are going to be forced to sell properties in Spain cheaply, accelerating a four year decline in residential property values that are already 30% below the peak reached in 2007. Most Spanish property market commentators agree that home prices in the country still have a long way to fall. But despite historically low demand and a glut of homes on the market, vendors, residential developers, estate agents and banks have been reluctant to slash property prices sufficiently to meet today’s perceived market value, in order to avoid major losses.

But Economy Minister Luis de Guindos is now leaning on lenders to make €50bn (£42bn) of additional provisions and capital charges for losses linked to real estate over the next two years. Consequently, residential property prices are now poised to fall the most on record this year, leaving a quarter of all home owners in negative equity, as the government forces the banks to sell real estate holdings.

According to research conducted by advisory firm R.R. de Acuna & Asociados, the average price of a home in Spain will fall by 12%-14% this year. That’s the most since the National Statistics Institute started tracking values in 2007.

Based on an analysis of 800,000 mortgages, Standard & Poor’s forecasts borrowers with negative equity may increase to 25% this year, up from 8% in 2010. “There will be more serious price drops this year because of the government decree,” said Fernando Rodriguez de Acuna Martinez, a partner at the Madrid-based firm. “Banks are now prepared to incur big losses on real estate to shift all they can.”

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

Holiday lettings market set to become more popular, research suggests

December 16, 2011 – 11:09 am

Interest in purchasing property to let in Tenerife and Spain returns

The financial benefits of investing in a holiday home are becoming increasingly apparent as more British people are considering investing in this area, according to a new report.

The holiday lets marketplace could be set to spike again over the next five to ten years as a quarter of Britons are considering investing in a holiday home according to the Holiday Lettings’ Insights Report.

Of those who would invest in overseas property, more than half, 59%, said that with prices currently low, the long term capital gain opportunities were appealing.

Some 25% of those surveyed said that they would consider investing in a holiday home in order to supplement their income. The report also reveals that Holiday Lettings’ customers, holiday home owners with properties worldwide, are thought to have earned an estimated £540 million this year.

Estate agents in Tenerife and Spain are noticing an upturn in enquiries for holiday property

Source: PropertyCommunity.com

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

Economic uncertainty keeping housing market subdued

September 30, 2011 – 2:12 pm

Housing market in Spain and Tenerife may be subdued by economic worries

Economic and political uncertainty will keep the housing market subdued for the rest of the year, according to several experts quoted in the Spanish press

With the Spanish property market down an annualized 26pc in June, and 11pc year to date, the experts see no recovery for the market this year.

Angel Serrano, a director of Spanish property consultancy Aguirre Newman, says that “few people will start looking for a home in what remains of the year.” On the other hand, he also thinks the correction in house prices is into its final phase.

Economic and political uncertainty, with unemployment over 20pc and general elections in November, are making Spaniards wary about buying primary residencies, let alone holiday homes.

Moreover, the credit crunch is still in full swing for Spain, making scarce the financing needed to oil the wheels of the housing market. The lack of mortgage finance is the biggest problem and obstacle to recovery, according to Emiliano Bermúdez, from the Don Piso chain of estate agents.

Employment, mortgages and asking prices are the key variables , argues Fernando Encinar, head of research at idealista, a property portal. In the short-term the only solution is to “reduce prices if one wants to sell more homes,” said Encinar.

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

Spain still a frim favourite for property

September 7, 2011 – 10:55 am

Property in Spain and Tenerife still a favourite with buyers

The three most popular international real estate markets are still the old favourites – Spain, France and the USA, according to the latest Top of the Props report .

In troubled times, many investors return to the things they know best and that certainly seems to be the case with overseas property buyers, with the top 3 countries sharing nearly a third of all property searches on TheMoveChannel.com.

Director Dan Johnson said: “The Spanish market is awash with great deals at the moment as Spanish banks continue to try and shift property cheaply. This phenomenon is unlikely to change soon, as there is plenty of supply, while the failure of some banks in the recent stress tests, means they’ll be keener than ever to divest the repossessed stock from their balance sheets. 

“France is an altogether different market, with a much higher concentration of lifestyle buyers purchasing holiday homes because they love the country and want to spend time there – it’s not such a price-sensitive market, though buyers are still pushing for good deals.”

Other notable movers and shakers this month are Portugal, which moved above Italy in terms of popularity for the first time and Thailand, which jumped up 12 places to number 9 and moved into the top 10 for the first time.

Of course, the Canary Islands especially Tenerife has some real bargains at present, why not check out the local estate agents and grab a property at prices paid  years ago.

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

Estate agents surveyed throughout Spain for their views on the property market.

April 5, 2011 – 1:01 pm

Property sales increase in Tenerife, especially in the prime property market.

During February Idealista surveyed 400 estate agents all over Spain for their views on the property market today. They found that 30% of vendors accepted up to 10% lower, 43% accepted between 10 and 20% lower, 19% between 20 and 30% less, and 7% more than 30% less.

The change in stock of properties for sale since the end of 2010 resulted in a 58% of agents reported an increase. 88% of vendors were more open to offers than a year ago . The main reasons why sales fall through is that vendors were asking too much in 26% of cases, buyers offering too little in 40% of cases (remember, this is all in the opinion of estate agents), and banks not giving finance in 34% of cases.

Although there have been af fall in  enquiries so far this year, falls up to 20pc or more say 51%, whilst 24% say an increase of up to 10%.So life is not all bad in the property sector.

In sales so far this year, there have been falls of up to 20% or more say 71%, whilst 19% say an increase of up to 10%. The expectations for the first quarter of the year (compared to same period last year) are  47% say worse, 27% say the same, 26% say better and for the year, 33% say worse, 28% say the same, and 38% say better.

I wonder who will be correct? Certainly current  property sales in Tenerife indicate a brighter future for the sector, especially sales of prime property in good areas and by the coast.

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

Cost of maintaining property overseas increases

June 13, 2010 – 11:40 am

Maintaining property in Tenerife on the increase

Maintaining property in Tenerife on the increase

85% of overseas property owners say the cost of maintaining their property has gone up in the last 12 months, so check out this guide on how to reduce the cost of being an overseas property owner.



Over a million Brits currently own a home overseas, with France and Spain being the most popular destinations. However the global economic slowdown has hit homeowners not only at home, but also abroad as the cost of maintaining a property has increased -over a fifth of owners (21%) are struggling to meet the increased costs, according to latest research.

Whilst mortgage rates may have gone down for many owners, the overall cost of owning a property overseas (including local taxes, utility bills, maintenance costs etc) has continued to grow and the rising costs of ownership have been magnified by sterling’s depreciation.  Many homeowners are also seeing their rental income from a holiday home hit, as the number of potential tenants decreases with more people opting for ‘stay-cations’ in their home country.

To help the million plus Brits who currently own a home overseas, HiFX has complied a guide to reducing the cost of ownership, including cutting the costs of international money transfers, how to ensure the property is as tax efficient as possible and how to maximise rental opportunities.

1. Protect yourself from currency fluctuation:

Two years ago the average overseas home owner transferred £10,000 a year to meet maintenance costs (including overseas mortgage payments) and provide spending money when they visit their second home. However as the pound has taken a beating against all the world’s major currencies, they now have to convert significantly more in order to meet the costs associated with their international property such as maintenance costs, mortgage payments, utility bills and local taxes.

For example, in October 2008, £10,000 would have bought you €12,900.  To receive the same amount of Euros today, a Brit has to transfer £11,896, almost £2,000 more.

Advice for Brits who are feeling the pinch:

People making regular currency transfers should set up a Regular Payment Abroad plan with a currency broker that allows you to lock into an exchange rate for up to 12 months ahead so you know know exactly how much is being transferred every month. A Regular Payments Abroad plan also saves you forking out on commission and transfer fees. Banks typically charge up to £30 as a transfer fee on each and every transaction, up to 2% commission on the amount being transferred and, depending on the destination bank account, you may also be charged a further 0.5% receiving fee by the overseas bank.

Those who are uneasy about fixing the exchange rate and are more bullish about Sterling’s future or those who are making international transfers on an ad-hoc basis should at the very least shop around for better exchange rates and compare the rates offered by their high street bank with a currency specialist, particularly one which offers an online service for smaller amounts of money

2. Cash in on rental opportunities

According to the research, almost 70% of holiday home owners are missing out on vital income by not renting out their overseas property. Almost half of those that do rent it out only do so to friends and family who traditionally pay less than other tenants.   Talk to neighbours, the local economic development office and estate agents about rental rates, which websites work for advertising their holiday home and the seasonality for tourists.  If you decide to use a website to advertise your holiday home, put some effort into putting great pictures up and writing an attractive description.

3.  Ensure your property is tax efficient

Overseas home owners have to pay ongoing taxes on ownership, such as local taxes or even tax on rental income.  This is usually payable in the country where the property is located, but if you are a UK resident, such income also needs to be recalculated into Sterling and is taxable in the UK, regardless of where it is paid, with any appropriate relief given in the UK for taxes paid abroad. Each country will tax the income according to its own rules, so sometimes more allowances are available abroad than in the UK or the tax rates abroad may be lower, but the higher tax liability will be due.  However, there may be ways of reducing your tax bill, but whatever you do, you only pay tax when you make money. Spending money unnecessarily to save tax can often be a false economy; after all, why spend £100 to save £40? It is important to make sure that you claim whatever allowances you are entitled to. Make sure you know the rules or employ someone to prepare the returns for you.  Trying to do it yourself, if you don’t understand the rules, can be a false economy.

People who take advice before buying their property abroad often manage to make their purchase more cost-effective than those who buy without taking advice.

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

Banks need to become better estate agents for the market to recover

December 6, 2009 – 1:07 pm
Banks need to become better estate agents in Tenerife

Banks need to become better estate agents in Tenerife

Demonised by agents for keeping prices artificially high to avoid losses, or making it harder for agents to access distressed deals, many now feel that Spanish banks must become better estate agents if the market is to recover.
Ian Waudby, chairman of investment consultancy Crest Group International, observes that the companies set up by banks are slowly making it easier for foreign buyers and agents to access stock; but he stressed that buyers need a quicker response from these companies and a faster sales process.

“The properties need to be packaged with mortgages . The websites aren’t bad but if you try to make an offer you won’t hear anything back.”   Discounting is central to the current bank-owned property stalemate, with agents saying they’re either not big enough, or only available for too short a period of time. There aren’t enough desirable properties at the distressed prices that people want. The demand is there but even if people see their ideal property they aren’t prepared to pay for it if it isn’t cheap.

Pro-active banks that price realistically will see more profit than those who wait out the market.  The big banks such as Santander could probably sit on it for 20 or 30 years but the smaller ones can’t. There aren’t enough buyers at the moment and they may have to bite the bullet and get rid of their properties.

Most agents spoken to agree that the sooner the banks bite the bullet, the sooner the Spanish homes market will recover.

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

Marketing properties in Tenerife require the right level of exposure

December 5, 2009 – 12:49 pm

The number of holiday rental properties in Europe is increasing and the right level of exposure is essential, especially when the global economic downturn is taken into account. Property owners should make sure that they give a very detailed and interesting description of their holiday rental and surrounding area.

Market your property in Tenerife whilst long winter nights in the UK cause people to think of holidays and warmer climes

Market your property in Tenerife whilst long winter nights in the UK cause people to think of holidays and warmer climes

Owners of overseas self-catering holiday homes are reminded that the long dark evenings of winter are just the time when people think about next year’s vacation and therefore property owners should think about marketing the properties via estate agents in Tenerife.

In related news, Britons who let out holiday homes in the UK will need to maximise on lettings in 2010 as they are likely to lose their furnished holiday lettings tax relief in April of next year.New legislation, details of which are expected in this month’s pre-Budget report, are expected to outline changes to the tax rules for furnished properties available to let for at least 140 days a year and actually let for 70 days year.

The new measures could affect around 60,000 individual second-home owners, who form the core of the UK’s holiday lets market, and can currently offset the cost of furniture and fittings against tax.

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

Easier to sell Spanish property to foreign investors

November 10, 2009 – 4:58 pm
Easier for the Spanish and Canary Isles to gain investment from foreigners than vice versa

Easier for the Spanish and Canary Isles to gain investment from foreigners than vice versa

It is easier at present to try to sell Spanish property to foreign investors than foreign property to Spanish ones. At least there are still some buyers for property in Spain and Tenerife, if the price is right. Spanish investment in foreign property, on the other hand, has collapsed.

The latest figures from the Bank of Spain on cross border real estate investment reveal that foreigners invested 860 million Euros in Spanish property during the second quarter of the year, down 40% on the same period last year. The Bank of Spain’s figures include all real estate investment, not just residential investors.

Look further back, and the picture is even more demoralising. Foreign investment was down 55% compared to the second quarter of 2004, the peak of the Spanish property boom, when the rest of the world ploughed 1.9 billion Euros into Spanish real estate assets. It is now back to levels last seen in the first quarter of 2000, when it stood at 777 million Euros. The appetite of foreign investors for Spanish property has been declining since the start of 2008, after staging a minor rally in 2007.

Estate agents and developers in Spain may be feeling sorry for themselves in the current market, but they can be thankful that they aren’t trying to sell property abroad to Spanish investors, who have completely thrown in the towel.

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