Average prices depreciate in Spain

May 3, 2012 – 2:05 pm

Prices of property fall in Tenerife and Spain

The average price of a home in Spain depreciated by 41.7% between 2006 and 2011, as a consequence of the housing crash, which has been fuelled primarily by a significant housing glut, according to research by Barcelona based Universitat Pompeu Fabra (UPF).

The study, which analysed the sales figures of real estate firm Tecnocasa provided from the end of 2006 to the end of 2011, suggests that Spanish property prices are likely to fall further unless credit conditions improve.

A lack of mortgage liquidity is partly to blame for the collapse in demand for properties in Spain, which has contributed significantly to the huge gap between supply and demand in the country.

The research, led by García Montalvo, reveals that the greatest fall in Spanish property prices occurred between the second half of 2010 and the same period in 2011, when prices fell by 19.7%.

Furthermore, the study shows that while prices have plummeted at the lower end of the property market, price falls have not been so great in some of the most exclusive areas in Spain.

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

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.”

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

Muenchau’s gloomy forecast for Spanish property

March 22, 2012 – 1:50 pm

Wolfgang Muenchau recently expressed his views on propety prices in Tenerife and Spain

Wolfgang Muenchau’s article in the Financial Times,  argues that Spain’s bubble was much more extreme, and that the price adjustment is less mature compared to the others. . The price to rent ratio can be compared to a price to earnings or a price to dividend ratio in finance. It measures the relative value of the asset: the price of the asset (purchase price of a home) divided by its flow of fundamental value (rental income earned or the value of having a roof over your head). As the price-rent ratio falls, the market home values moves closer to fundamental value. Spanning the years 2005 to Q4 2011 and indexed to 1997 Q1, home values peaked at roughly 1.7 times rent in the US, 1.8 times rent in Spain, and north of 2 time rent in Ireland and the UK. Since the peak, though, US home values have fallen to 1.0 times rent   a considerable reduction in asset prices toward fundamental value.
In contrast, home values in Spain, the UK, and Ireland remain quite elevated to rents, 1.3 times, 1.6 times, and 1.4 times, respectively in Q4 2011. If 1.0 is deemed equilibrium, either home values in Spain, the UK, and Ireland must fall further and/or rents rise to normalize home values. That’s a tall order: rising rental values amid defficient and contracting domestic demand in Spain and possibly Ireland. The UK has more of a fighting chance, given its relatively easy monetary policy, compared to Ireland and Spain, where more accommodative monetary policy is very lagged amid fiscal contraction. Without growth, though, default is probably the only answer left to normalise housing markets in Spain and Ireland.
Source: Business Insider
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Tow in three second home owners are considering selling their property

March 19, 2012 – 12:12 pm

2 out of 3 second home owners consider selling their property

Two in three (65%) second homeowners are considering or would like to sell their property, according to a new survey from holiday rentals company HomeAway. It revealed that almost 60% also confirmed that their property had taken a nose-dive in value since they purchased it and 37% were feeling the squeeze, saying it was a bigger financial burden of late.

The vast majority bought their properties in the last six years, following the boom in UK house prices in 2007 which resulted in a huge rise in equity that owners quickly put to good use buying a second home in the UK or abroad.

More than 90% of respondents stated they had property in Europe, with France and Spain unsurprisingly the top two countries.

Source: PropertyTalkLive.co.uk

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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.

By Angela | Posted in Economy, General, Health, Holiday, Inspirational, Miscellaneous Articles, Property, Tenerife, Things to Do, Weather | Tagged , , , , , , , , , , , , , , , , | Comments (2)

Spain most popular for currency exchange

February 10, 2012 – 3:26 pm

Whilst Spain remains the most popular destination in terms of volume of currency transactions in 2011, interestingly, the UK takes second place with 18% of transactions according to the latest data compiled by FX specialist, Currency Index.

Almost a quarter of all FX transactions in 2011 (24.99%) were sent to Spain, unsurprising given the country’s appeal as a top holiday and second home destination.Robin Haynes, MD of award-winning Currency Index explains, “18.10% of FX transactions, nearly a fifth, last year were made back to the UK. This is most likely a result of people returning home from overseas or in a few cases sending currency to UK-based Euro/USD accounts for example, which can be overseas properties where a lawyer’s client account is in the UK for example. In addition, part of these transactions will be business clients repatriating income and also individuals earning money abroad. It really is a mixed bag but of note none the less.

“In Q4 2011, there was a 15% increase in people bringing money back to the UK probably due to the Euro crisis which sparked panic and saw people moving money back to locations seen as safe havens.”

Indeed, the Eurozone sovereign debt crisis has caused fear to spread but for those considering buying property abroad, the reduction of the value of the single currency means that now is in fact one of the cheapest times to buy a place in the sun.

Haynes comments, “There is a lot of confusion and scaremongering going on in the Euro at the moment but in spite of this, overseas property buyers should rest assured that the single currency devaluation will mean that they will currently be able get over 8% more for their money than if they were buying Euros in July last year.”

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

Cheaper homes in Spain

January 17, 2012 – 2:57 pm

The average price of a Spanish home fell by 8% in 2011, with further price falls anticipated in 2012, research shows.

The Tinsa House Price Index, considered to be Spain’s most reliable residential property price index, reveals that average home prices fell by 8.1% in 2011, the worst annual decline in property values since 2008, when the average price a home in Spain fell by 8.8% year-on-year.

“There is a clear double-dip in the curve with price falls accelerating again after staging a feeble recovery last year,” said Spanish property commentator Mark Stucklin. The main reasons why home price falls have picked up pace are due to a lack of mortgage finance and a severe oversupply of homes on the market.

Stucklin added: “The double-dip in house prices is mirrored almost exactly by a double dip in new mortgage lending.”

Somewhat surprisingly, homes located in coastal areas, where there is generally the greatest oversupply of properties, finished the year better than other areas, with prices having declined by  7.2%, on average, year-on-year, compared to 9.1% in cities and 8% on the islands such as Tenerife.

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

Spain reclaims property crown

January 9, 2012 – 5:57 pm

Spain and Tenerife property in demand

Spain has reclaimed its property crown, according to the latest Top of the Props report from TheMoveChannel. Following America’s unexpected victory in November, US property fell in popularity last month, dropping three places in the overseas portal’s chart.

That dip was all Spain needed to soar back to top spot. Buyers seemed to flock to America to avoid Europe’s troubled markets, Spain, Portugal and France charged up the table, pushing America down to fourth. In total, the top three destinations accounted for just over a third of all enquiries on the site in December.

While US enquiries fell by 7.32 per cent, Spain’s popularity dropped by only 0.18 per cent. This steady level of attention, driven by low prices and the country’s reduction in VAT during 2011, reflects the continuing demand for Spanish property from lifestyle buyers.

This proves that holiday home demand can still buck the Eurozone’s downward trend if the prices are right.  Despite Spain’s return to form, investors are still willing to look elsewhere to avoid Europe’s more troubled economies.

Managing Director Dan Johnson comments: “As 2011 ends, the fluctuations in the Top 10 show the changing buyer demands in an uncertain market. Spain has always been a traditional choice for lifestyle buyers, as evidenced by the constant level of interest in the country. In fact, for the majority of last year, Spain was the most sought-after property destination on TheMoveChannel. so its return to the top spot seems an appropriate end to the year.

“Barbados and Morocco are equally attractive lifestyle choices that are free of Eurozone anxiety, but France and Portugal’s strong performance in December is a reassuring sign for more familiar property markets. As the New Year begins, we shall see if the popularity of these European countries will be strong enough to weather the economic climate in 2012.”

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

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.

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