First signs of growth in Spain’s real estate market

March 2, 2012 – 9:54 am

Investors are starting to look at Spanish property again says José Manuel Entrecanales (pictured above), the President of Acciona, one of Spain’s biggest companies

“Investor interest in Spain is starting to grow again, even in the real estate sector,” said Entrecanales, President of Acciona, at a press conference for the company’s 2011 results. Acciona is a massive international corporation and leader in power generation, and also has a real estate division in Spain.

Entrecanales said he sensed a “note of optimism,” without denying that “the immediate situation is worrying.” Growing optimism might be a sign that “asset prices in Spain have touched bottom,” in part thanks to “the political stability after the change of Government creating stable expectations for the coming years.”

Entrecanales explained that in the last few months he has seen more interest in Spain from investors from all over the world, including North and South America and Asia.

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

Real estate in the Canary Islands fairs better than mainland Spain

September 19, 2011 – 9:34 am

Tenerife and the Canary islands fairing better in the property stakes than mainland Spain

Real estate in  the Canary and Balearic Islands has experienced much lower price drops than in other parts of Spain, it has been noted.

Managing director of Spanish-Living Adrian Warriner pointed out that the two archipelagos – which include destinations such as Tenerife, Ibiza and Mallorca – have fared better than their mainland counterparts, recording just a 2.5 per cent fall in values over the last year.

“This is good if you already own a property there, but not so good if you are an investor looking for a bargain,” he stated.

Mr Warriner went on to suggest that those hoping to buy a home in Spain while the market is low may want to consider the Costa del Sol, which has seen average prices decline by more than ten per cent in the past 12 months.

Source: PropertyShowrooms

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

Plenty of advice for Tenerife property hunters at Property Investor Show

March 30, 2011 – 2:08 pm

Property bargains in Tenerife, Canary Isles and Spain

Lots of advice, plenty of opportunities and optimistic statements, but fewer exhibitors at the Property Investor Show, the UK’s premier event for property investors held last weekend at London Docklands Exel Exhibition centre.

However, there was plenty of essential information on “Where to” and “How to” invest provided from keen exhibitors just about managing to cope with the early rush of visitors with property investment on their minds. More than 30 seminars focused on topics ranging from “How to Spot a boom and a bust” to “How to win in a recession”.

Many small investors, were looking to acquire from the ongoing “Sale of the Decade” in the Spanish market, where banks are disposing of their unwanted toxic assets with huge discounts of up to 56% and generous mortgages between 80-111%.  A spokesman for a Spanish distressed property site  added: “Putting your money in the  Spanish property markets could be the perfect hedge for investors with sunny Spain for family holidays and some equity gain a few years down the line.”

Two properties can be bought for a realistic amount in Spain – one to rent out, the second for family enjoyment, with equity gains to look forward to when prices start to rise again in the world’s top second home destination.

Tenerife and the Canary Islands have some excellent bargains, even in the prime property sector, but prices will be rising again soon judging by the renewed interest of late.

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

Data indicates price fall in Spain and Tenerife

February 10, 2011 – 2:15 pm

Prices may still have a way to go before they bottom out in Spain and Tenerife

Potential market investors might be interested to learn that Spanish property prices are set to decline. Will Needham, editor of Spanish Property Magazine, said: “The best data indicates that prices are still falling and will continue to do so throughout 2011.”

“The rate of decline appears to be falling, so those looking for the bottom of the market should probably continue to wait.” He added that the number of transactions in the Spanish property market look set to show a “modest improvement” as bargain properties are taken on.

However, investors might want to be aware that the high levels of unemployment, bank repossessions and other consequences of the financial crisis in Spain “are not going away”. The research follows the publication of a survey by sunshine.co.uk, which found that the country in which people feel safest overseas is Spain.

The problem for would be investors is just when is the bottom of the market? Do they wait too long and then invest on an upward curve? Certainly prices in Tenerife are excellent value now.

Source: Expatriate Health Care

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

Stronger measures required to avoid real estate slump staying around for decades

January 5, 2011 – 10:44 am

Stronger measures required to avoid a lengthy property slump in Tenerife, the Canary Islands and Spain.

Toughing out the market without resorting to big discounts was a strategy that worked reasonably well for Spanish banks in past real estate slumps, but not this time. Some banks are starting to face the fact that “stronger measures” might be necessary to avoid a Japanese-style slump that drags on for decades, according to a recent article at idealista.com.

For “stronger measures” read taking a hit. Some banks are starting to talk of selling at a loss to get properties off their books, say Idealista, who point out that banks have been asking prices beyond the reach of most buyers, and as a result not selling much. The only solution is further price reductions.

The problem is that dropping prices has its own dangers, as recognising losses raises the spectre of insolvency for weaker banks. Rodrigo Rato, a former Minister of Finance under the Aznar government and now president of Caja Madrid, one of Spain’s biggest savings banks, recently admitted that banks are navigating a difficult course between going too slowly and dragging out the slump like Japan, and going too fast and incurring unsustainable losses dumping real estate in an illiquid market. Banks have accumulated property portfolios with a book value of more than 200 billion Euros, or 20pc of Spanish GDP.

Rato told the Spanish press that the solution must come “via prices or via employment”, by which he meant that house prices must come down, or wages must go up. There are signs that banks are taking the some steps towards substantially lower prices, even if on a limited scale. In the last few weeks, for example, the following discounts have been announced:

  • Altamira Santander is offering discounts of up to 58pc on 400 resales, with a 2-bed flat in Tenerife reduced from 98,000 to 68,000
  • Caja Cantabria is offering luxury flats in its old HQ in Gijón with discounts of 30pc (priced between 227,000 and 782,000 Euros, with up to 100pc financing, they are still some of the most expensive flats in Gijón)
  • CAM, a Valencian savings bank, is offering discounts of up to 60pc and 100pc financing, though the offer expires at the end of the month
  • And Banesto is offering flats in Barcelona and Madrid for less than 120,000 Euros

However, if you really want a bargain you may be better off buying from from a distressed-debt investor, who will have a bigger incentive than the banks to get a deal.

By Angela | Posted in Economy, General, Holiday, Inspirational, Miscellaneous Articles, Property, Tenerife, Things to Do | Tagged , , , , , , , , , , , , , , | Comments (1)

Opportunities available in Spanish real estate

January 7, 2010 – 5:03 pm
The latest news from Spain and Tenerife's Euribor and mortgage situation

The latest news from Spain and Tenerife's Euribor,mortgage and property situation

Mikel Echavarren, an experienced professional in touch with many different companies in the property sector  is worth listening to. Here is a selection of his recent comments

Do you think there are any good investment opportunities in Spanish real estate today?

I think so but they are risky. In three years we’ll probably be kicking ourselves for not advising investors to invest now. There aren’t many opportunities in commercial real estate because there isn’t much product and rents haven’t yet adjusted. In residential, on the other hand, the correction has been very strong and fast. The ideal profile now is an opportunistic investor buying properties off banks by taking on the existing debt, a type of real estate venture capital.

So you think there are opportunities in a residential sector because the adjustment has already taken place?

There are hundreds of thousands of possible transactions, but not many genuine opportunities. What there is not is any financing, so anyone who wants to take advantage of this market has to take the debt with the asset, but there are still very few people prepared to do that today.

Has the price of housing and land touched bottom?

House prices touched bottom some time ago, they have already fallen all they had to fall. And the price of land has fallen faster than house prices although it could even fall a bit more. We have been saying at the top of our lungs that the price statistics published by the government are worthless, and damaging to the sector because they give international analysts the impression we are a country of idiots. In the US and the UK prices have fallen around 20% from the peak whilst here we have only fallen by 8%.

What’s wrong with the official statistics?

They are based on valuations. One has to look at real property transactions and a survey of developers to see not only their asking prices but how far they are prepared to drop prices to sell.

Do you think there is any residential property that will never sell?

What there is is a stock of land that will never be sold, at least not in 10 years. There are areas of Spain where the town plans look like they were designed for an invasion of extraterrestrialsOn the other hand, the stock of finished property will be absorbed sooner.

Is there any real demand for housing at the moment?

Yes, quite a few homes are being sold. We would have to place it at more than 200,000 homes a year. What is not selling is off-plan, as there you take the risk of the developer or builder going bankrupt. It’s a good time to buy newly built homes with Euribor at 1.24%. They won’t be any cheaper next year. And when prices start to rise they will do so at a rate of 10% per year.

How does one get the Spanish property sector to recover?

The residential sector is already recovering, just not the developers, who won’t see the light at the end of the tunnel for three years; it is very bleak for them. Clients of ours tell us they have sold a lot this summer, and some banks tell us that they have had more mortgage requests this summer than in all 2009. Furthermore, we believe that developers have dropped their prices to the minimum. There is mortgage financing available, not much, but there wasn’t any at all in 2008, and now there is. Mortgage costs are low, and it appears that the future is not going to get any worse. The recovery is underway, although this won’t show up in the official statistics until the first half of 2010. As soon as there is a general perception that things are getting better, house prices will stop falling and start rising.

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

Opportunities still exist in Tenerife and Spain’s property market.

December 14, 2009 – 4:05 pm
Opportunities still available in Tenerife, the Canary Islands and Spain

Opportunities still available in Tenerife, the Canary Islands and Spain

We think there are  good investment opportunities in Spanish  and Canarian real estate today, but some are risky. In three years we’ll probably be kicking ourselves for not advising more investors to invest now. There aren’t many opportunities in commercial real estate because there isn’t much product and rents haven’t yet adjusted. In residential, on the other hand, the correction has been very strong and fast. The ideal profile now is an opportunistic investor buying properties off banks by taking on the existing debt, a type of real estate venture capital.

There are hundreds of thousands of possible transactions, but not so many genuine opportunities. What there is not is any financing, so anyone who wants to take advantage of this market has to take the debt with the asset.

House prices touched bottom some time ago, they had to fall. The price of land has fallen faster than house prices although it could even fall a bit more.  In the US and the UK prices have fallen around 20% from the peak whilst here we have only fallen by 8%. Valuations appear to be down 30% in 2 years.. One has to look at real property transactions and a survey of developers to see not only their asking prices but how far they are prepared to drop prices to sell.  Quite a few homes are being sold more than 200,000 homes a year in fact. What is not selling is off-plan, as there you take the risk of the developer or builder going bankrupt? It’s a good time to buy newly built homes with Euribor at 1.24%. They won’t be any cheaper next year. And when prices start to rise they will do so at a rate of 10% per year. Perhaps that purchase in Tenerife should be made sooner rather than later!

The residential sector is already recovering, just not the developers, who won’t see the light at the end of the tunnel for three years; it is very bleak for them. We believe that developers have dropped their prices to the minimum.  The recovery is underway, although this won’t show up in the official statistics until the first half of 2010. As soon as there is a general perception that things are getting better, house prices will stop falling and start rising.

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