Recovery expected in real estate markets in 2013

March 13, 2012 – 10:31 am

Standard and Poor's expect the real estate market to improve in Tenerife, Spain and Europe in 2013

The credit rating agency, Standard & Poor’s, believes that the European macroeconomic crisis will not extend beyond 2012, which will result in a “significant recovery” of European real estate markets in 2013.

“Standard & Poor’s Ratings Services believes that the macroeconomic crisis may not extend beyond 2012. We still expect a new recession in Europe, although we believe it will be mild, with a gradual return to growth thanks to the growing demand from emerging countries, the strength of demand in developed countries and the restoration of investor confidence,” said the company.

According to El Economista, the baseline scenario of S & P considers there will be a flat growth of the economies of the Eurozone as a whole, with growth of 0.5% in France and 0.6% in Germany, while in UK the gross domestic product (GDP) will grow by 0.5%.

Source: Kyero.com

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Increase in demand for Spain’s holiday and accomodation

February 27, 2012 – 10:38 am

Rental properties in demand in Spain and Tenerife

An increase in the demand for holiday accommodation in Spain last year has resulted in more and more Spanish home owners preparing to rent their properties out this summer, providing a welcome boost to the property market.

According to a report from holiday home rentals website HomeAway, booking enquires for Spain in 2011 increased by 27% in comparison with 2010. As a result, a greater number of British and European buyers are acting now and purchasing a home in Spain with a view to capitalising on this growing rental demand.

Marc Pritchard, Sales and Marketing Manager of Spain’s leading house builder Taylor Wimpey España, says “The growth of the rental market has made Spain once again a popular destination for property buyers to invest in, particularly given the readjustment of property prices and abundance of cheap flights. We have seen an exceptionally strong start to 2012 with sales in January markedly up on the same period last year.

Mallorca is tipped to be a top performing Spanish destination seeing as it registered the highest number of overnight hotel stays in 2011, with 41.6 million, according to data from the National Statistics Institute. Tenerife is also expected to remain a firm favourite.

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Moody downgrades Spain debt rating

February 15, 2012 – 5:10 pm

Downgrade of Spain's debt

The rating agency Moody’s has downgraded the sovereign debt rating of Spain and five other European countries, while at the same time placing France, Austria and the UK (who are presently enjoying the maximum ‘Aaa’ note), on negative outlook.

The downward revision of the ratings and the outlook for a total of nine European countries, “reflects their susceptibility to the growing financial and macroeconomic risks stemming from the crisis in the eurozone,” the agency explained in a statement.

Thus, the rating agency lowered the note of Spain two notches from ‘A1? (remarkably high) to ‘A3? (remarkably low), Italy from ‘A2? (remarkable) to ‘A3? and Portugal from ‘Ba2? to ‘Ba3? (both in junk bond category), while at the same time placing all these notes on negative outlook.

Source: Kyero.com

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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.

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Spain’s property reign ended by America

December 12, 2011 – 10:22 am

US overtakes Spain in the property market

The reign of Spain has been ended by America, according to the latest Top of the Props report .

Spanish property used to be the favourite for buyers, with the sunny Costas attracting swarms of house hunters every year. But now there’s a new top dog as the US replaces Spain in the overseas property portal’s rankings, upsetting the market’s established order to become the most popular destination in November.

The US has long played second fiddle to both France and Spain for property buyers but in October, America leapfrogged France to become a surprise runner-up in TheMoveChannel’s chart. Now, an increase of 7.01 percent in enquiries has seen the US surge to number one, with foreclosed homes and bargain house prices eclipsing the opportunities available in Europe.

Spain could only stand and watch as enquiries fell by 2.38 per cent last month, despite its half-price VAT reduction on new homes until the end of the year. France, on the other hand, remained firm in third place, attracting exactly the same number of enquiries in November and October, demonstrating the country’s consistent appeal to investors.

Managing Director Dan Johnson comments: “After climbing three places in as many months, the US continues to attract more and more overseas investors. Florida remains a popular lifestyle choice and with US houses the most affordable they have been in 15 years, the troubled Eurozone just can’t compete with the low price of American real estate. It’s no coincidence that the US is the only country to rise above the four familiar European markets.

As Spain’s reign ends, America’s dominance begins. Indeed, while the industry speculates about the impact of the Euro upon the rest of the world, North America’s rise to first place is exactly the kind of stimulant the US housing market needs

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Spanish property market over the worst?

December 8, 2011 – 5:20 pm

Property slump over the worst in Spain and Tenerife?

A growing number of experts believe that the Spanish property market is showing tentative signs of recovery following one of the most spectacular housing crashes of all time.

Spanish property sales and prices have plummeted across the country in the past five years, on the back of the global credit crisis, a string of corruption scandals, a chronic oversupply of housing, a string of illegally constructed homes, a weak economy, high unemployment and a record level of foreclosures.

It is estimated that property prices have fallen by up to 70% in some parts of the country since the market peak of late 2006 leaving many people in negative equity and others facing repossession.

Although property prices are unlikely to bounce back anytime soon, some property commentators and professionals feel as though the market is reaching the bottom of the downturn.

Mark Stucklin of Spanish Property  commented: “I am of the opinion that this is about as low as the Spanish property market will go in volume terms. Q4 may well be another record low, but after that I expect the market to bottom out in the course of 2012. This is not to say there will be a strong recovery after that , far from it. But at least the market will have stopped shrinking.”

The latest report Global House Price report from Knight Frank suggests that market in Spain, along with some other struggling European nations, could be  over the worst

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Retail investment up

November 8, 2011 – 10:46 am

European retail investment up

European retail real estate investment is up 38% quarter on quarter to €6.7 billion with demand for prime retail to remain relatively strong during the last quarter of the year, according to a new report.

The third quarter report from Jones Lang LaSalle says that 2011 year end volumes are likely to exceed €28 billion, up by 35% on last year and significantly above the €12.3 billion recorded in 2009.

It reports that retail real estate investment remained strong throughout the summer, despite the volatile European recovery and economic headwinds that continued to face the sector. Direct investment in retail real estate in Europe during the third quarter of 2011 reached €6.7 billion, up from €4.9 billion in the second quarter of 2011 and significantly up on the €3.8 billion transacted in the third quarter of 2010.

Total investment volumes for the year to date now stand at €20.4 billion, up by 45% over the same period last year, almost on a par with total 2010 volumes and far exceeding full year volumes of €12.3 billion in 2009.

Source: Property Wire

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Spanish commercial sector taking longer to recover

November 4, 2011 – 3:13 pm

Commercial property in Tenerife and Spain taking longer to recover

The Spanish commercial property sector is likely to take longer than 12 months to recover, new research has suggested.

Bloomberg Businessweek reported on data published by Savills, which stressed that a lack of finance coupled with the wider European debt issues will slow the market’s recovery.

According to the firm’s figures, investment in Spanish commercial real estate is now at its lowest level since 2001, with just €1.25 billion (£1.1 billion) in deals concluded in the first nine months of this year.

This represents a 52 per cent drop over the same period in 2010, with the news provider noting that a lack of funding from Spanish banks is deterring investors.

Source: PropertyShowrooms.com

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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.

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Europeans most likely to increase property holdings

October 11, 2011 – 8:38 am

Europeans more likely to invest in property overseas

Only 43% of European real estate investors report any increase in risk appetite since early 2011, compared to 46% globally, and 64% in Canada where investors show the biggest uplift in risk appetite, new research shows.

According to the Colliers International 2011 Global Investor Sentiment Survey, which takes the pulse of property investors worldwide, measuring their appetite for risk, optimism, key concerns and sense of market cycles, Europeans are more likely to increase their property holdings.

However, stock remains a concern with 49% reporting the supply of ‘for sale’ property remained a key barrier to expansion and over 54% stating they were focused on core property with target IRRs of five to 10%.

With 57% of investors reporting their risk appetite had not increased since the start of the year, it is not surprising those looking to expand are focused on safe bets, says the report.

Source: Property Wire

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