3.4 Million Spanish homes are empty.

December 2, 2011 – 11:08 am

Too many empty homes in Spain

3.4 million Spanish homes lie empty, 13pc of the total housing stock  according to a new report from IDC. There are 676,000 empty homes in Barcelona and Madrid alone. Of the two, Barcelona has the biggest problem.

This is a “worrying situation with very negative consequences, principally a huge cost,” explains Carlos Parra, Director of IDC, quoted in the Spanish press. The empty homes are neither for sale nor for rent.

At the same time, tens of thousands of homes are being repossessed, and millions of young adults can’t afford their own home.

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Bankinter’s latest report on Spanish housing market.

December 1, 2011 – 9:57 am

 

Bankinter's latest report suggests that Spanish house prices will fall again

According to Bankinter’s latest report on the housing market in Spain, housing prices will fall an additional 6% up to the end of 2013, making an adjustment of 30% in real terms from their peak, and only begin to rise again in early 2014, when the economy is capable of generating employment and demand recovers.

With regard to their forecast made last April, the financial institution have deferred for a year the adjustment in the housing sector, saying that promoter activity will not take off until the last quarter of 2014, when the housing ‘stock’ will have reduced to below the 500,000 mark.

Until then, only discounts and minimum production, will “very slowly” digest a ‘stock’ of houses which now stands at, they estimate, between 850,000 and 900,000 homes, of which about 200,000 or 250,000 belong to financial institutions. Bankinter sees the two years ahead with demand at minimum levels because of high rates of unemployment, which in 2011 alone saw home sales plunge to around 200,000 new properties, which was 55% less than what was sold in 2007, the year with the highest recorded demand in history (412,000 homes).

Bankinter’s calculations suggest that the Spanish economy will grow 0.7% in 2011, half of what the Government anticipated  1.2% in 2012 and 1.6% in 2013, below the 2% needed to create jobs, reported Cinco Dias.

Source: Kyero.com

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INE say sales down in September

November 21, 2011 – 10:25 am

House sales down say INE

There were just 22,065 home sales in September (excluding social housing), 30.5pc down on the same month last year and 62pc down on September 2007, according to the latest figures from the National Institute of Statistics (INE).

Monthly sales this year since March have been the lowest since the crisis began. The positive start looks like a dead-cat-bounce. On a year-to-date basis sales in 2011 are 20pc below last year, and 56pc below 2007. The big question is can it get any worse in 2012?

Sales have been bad this year, falling by as much as 40pc in August, with an average annualised fall of 29pc each month since March. the market is shrinking fast, a clear sign that prices are still too high.

All this at a time when Spain is saddled with a monumental glut of homes for sale, not to mention unemployment of 22pc and rising. More than 40pc of young Spanish adults are out of work. Demographics are also starting to blow against the Spanish economy.

Unless the newly elected  Government takes radical steps to liberalise the economy, boost employment, and force banks to stop keeping property prices artificially high, it’s hard to see a way out of this mire.

What about holiday homes? The situation is a bit different because demand is internationally diversified, at least in some areas such as Tenerife. Some quality segments of the holiday home market will recover before the overall housing market. That said, this year and next year will be very tough.

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Euribor rate rises

November 9, 2011 – 10:52 am

Euribor rates rises again in Spain and Tenerife

Euribor (12 months), the interest rate normally used to calculate mortgage repayments in Spain, rose to 2.11pc in October , a percentage increase of 2.1pc on the previous month.

Over 12 months Euribor was up 41.1pc, which means higher monthly mortgage payments for those with annually resetting Spanish mortgages. Average mortgage repayments will rise by around €45/month, €540/year

New mortgage lending is the lifeblood of the housing market without which most Spaniards cannot afford to buy homes. So it is particularly worrying that new lending fell 49pc in August compared to a year before, the lowest level on record for this data series published by the Statistics Institute (INE). New mortgage lending has now fallen for 16 consecutive months, suggesting that the credit crunch is still alive and well in Spain.

The average new mortgage value in August was €106,922, 12.6pc lower than a year before.

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Record number of repossessions in Spain this year?

October 21, 2011 – 2:51 pm

Repossession bargains in Spanish and Tenerife property

 A record number of homes in Spain could be repossessed this year, according to estimates by the ADICAE banking and insurance consumer group, presenting prospective buyers with an even greater selection of distressed housing stock to choose from, once the banks start to release these properties back onto the market.

The group projects that around 16,500 homes in Spain were repossessed in the second quarter of 2011, squashing some claims that the market is now on the road to recovery.

With Spanish home prices having declined by up to 70% since 2007, caused primarily by a severe oversupply of homes, property buyers are bagging some genuine bargains, particularly in coastal resorts such as in Tenerife and the Canary Islands.

Spanish property commentator Mark Stucklin said: “If the trend continues, there will be a total of 160,000 home repossessions this year, on top of the 140,000 families that have already lost their homes since 2008.” He added: “To make matters worse, many of those families will still have to pay off mortgages for the homes they have lost.”

According to ADICAE, a further 270,000 families are behind on their mortgage payments, suggesting that the more repossessions could follow,

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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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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.

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Luxury property and prime real estate is bouncing back world wide

September 22, 2011 – 9:22 am

Luxury property in Tenerife and Spain on the rise again

International luxury real estate activity is bouncing back, according to a new report from property network Christie’s International Real Estate.

Over two-thirds of respondents to Christie’s State of the Market survey reported an increase in buyer activity for the first eight months of 2011.

And although 62.5% said that sellers are still unrealistic about pricing, the figure has fallen considerable since last year.

However chief executive Neil Palmer warned that lending challenges and a lack of quality housing in some areas is hamstringing further growth. Tenerife’s prime property is a prime example of the  way the sector is bouncing back.

Source: OPP.org.uk

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Pressures on Spain’s financial system

September 5, 2011 – 10:40 am

Spain's financial system under pressure.

Falling property values and rising numbers of foreclosures in Spain are among the factors putting pressure on the country’s financial system.

Speaking to Time World, Santiago Nino Becerra, an economist at the University of Ramon Llull, explained that Spain’s mortgage market is comparatively small compared to other nations, such as the US.

“With housing values dropping, the banks here simply can’t withstand those kinds of losses,” he stated.

Mr Nino Bercerra went on to add that because unemployment in Spain is continuing to rise, “when it comes to foreclosures, we’re going to see some unbearable statistics”.

Source: PropertyShowrooms

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Brits considering luxury property in Tenerife and Spain again

August 10, 2011 – 5:36 pm

Luxury and prime property is selling well again in Tenerife and Spain.

Britons seeking their own slice of heaven abroad are increasingly considering luxury Spanish properties.

Experts say the sun-drenched country is once again proving popular with overseas property hunters, but they are now adopting a more cautious approach than that seen during the Spanish housing boom prior to the global economic downturn.

Buyers are seeking out investment properties that meet their precise requirements, and that has generally meant properties with a more luxurious feel. In Tenerife,  prime coastal properties are selling well.

The trend appears to be backed up by a report from the Overseas Guide Company which reveals a rise in the number of requests it has received for information about the Spanish property market.

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