Monthly planning approvals at record lows

May 16, 2012 – 1:07 pm

Monthly low for new builds in Spain and Tenerife

Monthly planning approvals for new homes are close to record lows, and might create a shortage in the next 5 years. There were just 4,600 planning approvals for new homes in February, down 44pc on the same month last year, according to the latest figures from the Government (Fomento).

Compared to February 2006, when Spain’s building boom was in full swing, planning approvals are down 93pc. That shows how badly the Spanish house building industry has been hit . From being the driver of Spain’s economy it has collapsed to almost nothing, which helps explain why unemployment is close to 25pc and heading for 30pc.

As a result of the collapse in planning approvals, there will clearly be a shortage of newly built homes in the next 3 to 5 years. This despite the fact that there is a glut of something like 750,000 newly built homes on the market today.

The problem is that many of those homes are typical of what gets built at the peak of a boom, badly built too quick, in undesirable locations with scant regard to what house buyers actually want. There is always a demand for new homes, that are properly built and well located. 

It is best to try to buy off-plan in the depths of the bust, not at the peak of the boom, though, most people do the opposite.

People  want  better designed, better built, more generously sized, more energy efficient, better located, and significantly cheaper homes than are on offer. As there are hardly any developers left standing,we are clearly going to see a shortage of such properties in Spain and Tenerife in the future.

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

The biggest annualised fall in Spanish property prices since the crisis began

April 16, 2012 – 8:35 am

Average Spanish house prices fell 11.5pc in March compared to the same time last year, according to the latest data from Tinsa, one of Spain’s biggest appraisal companies.

House prices fall in Tenerife and the Canary Islands in Spain's slump

That represents the biggest fall in the index since the crisis began and since Tinsa started publishing this index.

Housing on the coast, where most holiday homes are located, fell 10,79pc, marginally less than the national average. Prices in the Balearics and the Canaries were down 9.71pc.

Peak (Dec. 2007) to present, average national prices have fallen 28.6pc and by 35pc on the coast, all according to the Tinsa Index.

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

Euribor rate falls

April 3, 2012 – 11:29 am

Spain's Euribor rate falls, causing mortgage costs to fall in Tenerife

Euribor (12 months), the interest rate normally used to calculate mortgage repayments in Spain, fell to 1.45pc in March, leaving it 25pc lower than the same time last year. As a result, repayments on a typical 25-year, €120,000-mortgage resetting now will go down by around €25/month or €300/year.

Mortgage rates are plunging because of the new policy by the European Central Bank (ECB) to provide banks with unlimited funding for 3 years. None of this means cheap credit for mortgage borrowers.  When banks can only get short-term (3-year) financing, they avoid lending to house-buyers for 25 years.

Partly as a consequence, new mortgage lending in Spain has collapsed, down in January an annualised 41pc by volume, and 47pc by value, with the average mortgage value down 10pc.  It’s clear Spain is back in a credit crunch.

So mortgage rates have plunged, but so has new lending. The result is less money available to buy housing, which means downward pressure on prices.

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

Spanish house prices return to 2004 levels

March 15, 2012 – 11:32 am

Tenerife and Spanish house prices hit 2004 levels

The General IMIE Index, an indicator created by Tinsa to analyse the evolution of house prices in the Spanish market, increased its year-on-year decline in February, falling by 9.5% to 1664 points, returning to the levels of 2004.

The cumulative decline from the top of the market in December 2007 increased to exactly 27.1%. The deterioration of the macroeconomic environment with significant job losses, together with an increase in the spread on mortgage rates, are offsetting the positive effect of reinstated tax breaks on house purchases.

With regards to the performance of the different market segments, “Capitals and Major Cities” once again recorded the severest decline in February of 11.5%, followed by “Metropolitan Areas” with a fall of 10.3%, compared with the same month the year before. In both cases the decline was greater than the market average.

With a similar level to the General Index, the municipalities of the “Mediterranean Coast” segment declined by 9.5% year-on-year.

Source: Kyero.com

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

House prices have fallen 35% since peak

March 8, 2012 – 12:08 pm

Property prices fall by 35% since peaking Spain and Tenerife

Luis de Guindos, the Economy Minister, says house prices have fallen 35pc since the peak, much more than official figures suggest.

According to an article in the Spanish daily El Pais, de Guindos says it is his “impression that finished housing sells at a discount of 35pc compared to prices before the crisis.”

That’s not enough for De Guindos, who has introduced financial-sector reforms forcing banks to make bigger write-downs on their properties, with the stated objective of bringing down house prices.

De Guindos has criticised banks for only lending to buyers of their own properties to “maintain the fiction of the value of their properties,” something he hopes his reforms will discourage.

The reforms introduced by De Guindos had an immediate impact on vendor expectations, with a 30pc increase in asking price reductions (by an average of 9.5pc, or €26,200) in the week after De Guindos announced his banking reforms, according to figures from Idealista  a property portal

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

“Demand Thermometer” tool shows difference between asking and offer prices

March 6, 2012 – 11:38 am

Asking prices differ compared to buyers expectations in Spain and Tenerife

The “demand thermometer” tool from idealista, one of Spain’s leading property portals, allows us to see the difference between asking prices and what house-hunters are offering. On average, house-hunters offered 23pc less than asking prices in January, according to Idealista’s demand thermometer.

The biggest difference between asking prices and offers was in Malaga, home to the Costa del Sol, where house-hunters offered 29pc less than asking prices, followed by Soria (-28pc) and the Balearics (-27pc).

Differences of more than 25pc were also to be found in Girona (Costa Brava), Tarragona (Costa Dorada), Castellon (Costa Azahar), Murcia, and Almeria (Costa Calida), all popular locations with foreign holiday-home buyers.

So it seems there is still a big gulf between vendor expectations and what buyers are prepared to pay throughout Spain, Tenerife and the islands.

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

Spanish style mansion up for sale

March 1, 2012 – 12:17 pm

Frasier stars mansion for sale would not look ot of place in Tenerife!

It’s a home that even the obsessively picky Dr. Niles Crane would love. Which is a shame, because it appears that his off-screen self, the Emmy Award-winning actor David Hyde Pierce, is over it.

AOL Real Estate has learned that Pierce has just listed his exquisite, Spanish Colonial-style mansion in Los Angeles for $7.5 million. Granted, Pierce has owned the house for nine years (a lifetime in the fickle world of Hollywood real estate), but if that house were ours, we’d never want to leave.

With 1920s-Spanish features like a grand rotunda entrance, a stunning baronial fireplace, and a gorgeous spiral staircase rising to a stained glass ceiling, the home is anything but your typical California McMansion. The home is decked out in warm, earthy tones and each room is beautifully illuminated by chandeliers or other artful fixtures.

Source: RealEstate.AOL.com

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

A weaker Euro means less pounds for British vendors who repatriate their funds to the UK

January 25, 2012 – 1:25 pm

The weaker euro v the pound affecting property vendors in Tenerife and Spain

In the Euro zone , we continue to see the  single currency’s woes. For many investors and property owners in Spain it’s time to look at the bigger picture, which doesn’t paint a pretty scene as the hang-over continues into 2012.

The second half of last year revealed a number of detrimental factors that have hurt the Euro zone – a worrying decline in stocks, increase in unemployment, Governments finally pulling their heads out of the sand and recognising the problems within their own countries have all contributed to the crisis, which left people asking whether the single currency will even survive a year. It is a fair assumption that the Euro zone debt crisis will remain the central focus of markets going well into the New Year, so further weakening of the Euro is expected.

The outcome of the EU Summit last month did little to support the currency, with the outlining of plans to work towards greater fiscal integration in the euro zone failing to provide any comfort to the market as GBP-EUR pushed the €1.20 (0.833) level, and some forecasting €1.25 (0.8) by the end of February.

So the Euro could well continue to fall, in which case now might be a good time to sell it, or get a forward contract to do so if you are not yet ready (for example, if you are in the process of selling a property in Spain).

For example, if you wanted to change Euros into Pounds in June last year, when one Pound cost 1.11 Euros, but you didn’t have access to the Euros until December, a foward contract could have saved you £6,992.21. Firstly, you agree a rate of exchange for the amount of Euros that you are looking to sell and give a date that you know that the funds will be available before (bond maturity, or date of expected house completion for example).

A 10% deposit is needed within a few days of agreeing the rate and you can then relax and not be affected by any market movement, and can get your money at any stage at the fixed rate and all you need to do is send over the Euros when you have them before the end of forward contract.

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

Tinsa shows house price index down by 8pc in 2011

January 19, 2012 – 8:45 pm

Tinsa shows property sales in Tenerife and Spain down in 2011

Spain’s most reliable house price index fell 8.1pc in 2011, making last year almost as bad as the crisis year of 2008, when prices fell 8.8pc. There is a clear double-dip in the curve with price falls accelerating again after staging a feeble recovery last year.

One of the reasons house price declines have picked up speed is because of the return of the credit crunch in Spain. The double-dip in house prices is mirrored almost exactly by a double dip in new mortgage lending.  In coastal areas where holiday homes and much of the glut are concentrated finished the year better than other areas, with prices down 7.2pc over 12 months, compared to 9.1pc in cities and 8pc on the islands such as Tenerife.

Some experts argue that popular coastal areas will recover before the rest of the market thanks to diversified international demand from economies doing better than Spain

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

Potential purchasers looking for property discounts in Spain

January 6, 2012 – 9:45 am

Potential investors still want discount on property for sale in Spain and Tenerife

A  survey compiled by Spanish  portal Idealista reveals that potential homebuyers are looking for a property asking price discount of 21%, on average, despite the fact that prices have plunged  in recent years.

Data provided by Idealista shows that Spanish home prices dropped for the fifth consecutive year in 2011, with the average asking price now 20% below the high reached at peak of the market in 2007.

In spite of the fall in the property values, many would be purchasers feel as though values have not fallen enough to reflect the chronic oversupply of properties on the market, along with the country’s dire economic situation.

Spanish property commentator Mark Stucklin said: “As far as all other housing market indicators go, 2011 was another bad year, if not the worst since the crisis began. Property sales, house building, mortgage lending and confidence all tumbled to new lows, whilst repossessions hit new highs.”

Stuckin, like most Spanish property experts, expects home prices in Spain to continue falling in 2012.

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