Spanish house prices back to levels of seven years ago

May 10, 2012 – 2:17 pm

Tenerife and Spanish property prices down to levels seen seven years ago

Spanish house prices have fallen back to where they where seven years ago, according to the Government’s House Price Index (Fomento). House prices fell 7.2pc in Q1 compared to the same time last year.

The average cost of housing in Euros/m2 now stands at 1,649€/m2, basically where it was at the start of 2005, when the Government first started publishing this particular index. This index isn’t totally reliable but it does help to illustrate the house prices are clearly going down.

By Angela | Posted in Economy, General, Holiday, Miscellaneous Articles, Property, Tenerife | 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)

More downbeat news for the Spanish housing market

April 4, 2012 – 7:45 pm

More downbeat news on Tenerife and Spain's property market

Another clutch of downbeat news stories from the Spanish housing market: The value of house sales fell 37.5pc in 2011, according to new figures from the Government (Fomento). There were 307,931 home sales last year (excluding social housing), valued at 50.5 billion Euros, 37.5pc down on the year before.

More or less the same story, but from a different source, comes the news that there were 370,204 home sales last year (including social housing), according to the property register (registradores.org). That Spanish housing market is now the smallest it has been since the Property Register started publishing this data series back in 2005. Transactions fell 11pc in the last quarter of the year.

Source: Spanish Property Insight

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

Foreign investment in property grew in 2011 says Bank of Spain

February 16, 2012 – 4:14 pm

Foreign property investment in Spain and Tenerife up in 2011

Foreign investment in Spanish property grew in 2011 according to figures from the Bank of Spain. After surging by 27.8% through September over the same period in 2010 which experienced a mere 2.6% growth, overall transactions reached €3.6bn with the Bank of Spain reporting that these investments exceeded €1bn euros for three consecutive quarters, something not seen since 2008.

Marc Pritchard Sales and Marketing Manager of Spain’s leading house builder Taylor Wimpey España comments: “Foreign investment into Spain has been very changeable in recent years. It progressively declined between 2003 and 2006 only to increase in 2007 however, the upward trend was cut in 2008, during the economic crisis seeing foreign investment fall. However, the news that foreign investment in once again up is a sign that property market conditions are improvingwith property purchases in the third quarter of 2011 increasing by 19.2% over the same period of 2010, amounting to €1.1bn.

“The increase in Spanish property sales seen in the last quarter of 2011 has spilled over into 2012 as international bargain buyer’s hunt down the best Costa deals with Germany and Nordic countries outspending the Brits, who have been a little slow in spotting new opportunities.” Nevertheless, the euro’s depreciation against the pound could mean that there will be numerous opportunities for Brits to expatriate to Spain in 2012 with Pritchard stating: “As Spanish propertyseems more affordable in the eyes of British buyers there now seems to be a slow but sure increase in the demand for villas and apartments along Costa shorelines.”

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

High end Spanish property performing well

January 31, 2012 – 9:45 am

High end property in Tenerife and Spain performing well

Despite tough market conditions for property in Spain, one company has posted its most successful operational year to date in 2011, showing the appetite for high-end Spanish real estate has not waned.

2011 saw Lucas Fox doubling its staff, opening new offices and posting record-breaking third quarter profits of 19.5 Million euros, proof of the continued appeal of Spain among the cash rich. Among the most popular areas for investment were Barcelona, the Costa Brava and Mallorca where investors snapped up boutique and luxury pads.

Aimar Valls, Head of Commercial & Investment Property commented, “In the last year we have received a dramatic rise in both the quantity and quality of enquiries for commercial and investment property. Central Barcelona is a hot-spot for hotels, hotel projects and buildings with potential for tourist apartment rentals.

And the company is also optimistic about their fortunes in 2012. Director Alex Vaughan explains, “Our transaction pipeline is already looking strong and the outlook for the year is very encouraging. We start 2012 with over 5,000 active property buyers registered from Northern and Eastern Europe, Russia, Scandinavia, the Middle East, the U.S and China.”

Source: APlaceintheSun.com

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

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)

Good news from the Spanish property market

October 18, 2011 – 8:58 am

Propert sales improve in Spain and Tenerife especially prime property by the coast

At last some good news from the Spanish property market , foreign investment is up strongly on last year. Foreigners invested 1.3 billion Euros in Q2 this year, up 16pc on the first quarter and 37pc on the same time last year, according to figures from the Bank of Spain.

Foreign investment is still some way (32pc) from the peak it reached in Q2 2003, when it hit 1.9 billion Euros, but there has been a clear improvement in the last 2 quarters.  Sales to foreigners have picked up as prices fall, showing how price-sensitive foreign demand for Spanish holiday homes is.

Certainly prime property on or near the coast in Tenerife is attracting greater interest once more.

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

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)

Housing market shrinks again

August 21, 2011 – 5:28 pm

Housing market shrinks again

Home sales in June were the lowest since the property crash began, show the latest figures from the Statistics Institute (INE).
There were 24,699 home sales in June (excluding social housing), down 26pc on the same time last year,  even June 2009, when the crash was thought to be at its nadir.  It is clear that, after a deceptively promising start, 2011  is turning out to be the worst year yet.
Compared to June 2007, sales were down 60pc – a teeth-jarring fall by any measure.
Year-to-date, transactions are down 11pc compared to last year, 3pc compared to 2009, and 55pc compared to 2007.
Assuming that prices have fallen by an average of 30pc since 2007, then in value terms (Euros) the market has shrunk by 70pc since then. That means 70pc less money around for everyone who lived off the housing market, town halls in particular.
All this helps explain why many town halls are now in the jaws of a financial crisis: They ramped up their spending and overheads during the boom, assuming it would last for ever, but now the money has dried up and they can’t afford to pay their bills. A 70pc fall in revenues from real estate helps explain why.
Why are transactions still falling? Partly because the credit crunch is still in full swing – in Spain at least – and partly because the abolition of mortgage tax relief at the end of last year brought forward sales that might otherwise have taken place in the first half of this year. So the figures might make the market look worse than it actually is. To find out we will have to wait and see if there is a recovery in the second half of the year, let’s hope it improves in Tenerife too.
By Angela | Posted in Economy, General, Holiday, Inspirational, Miscellaneous Articles, Property, Tenerife, Things to Do | Tagged , , , , , , , , , , , | Comments (0)