Home construction in Spain to recover in 2013?

May 21, 2012 – 8:30 am

Construction in Spain and Tenerife set to improve in 2013

Home construction in Spain will begin to recover in 2013, according to the
Corporate Practise Institute.

The IPE’s Real Estate Pulsometer has predicted that the country’s inventory
of unsold will decline by 23.6 per cent this year, with up to 611,250 homes
being snapped up.

The report also notes an increasing trend for purchasing Spanish property
with cash, predicting that mortgages taken out will amount to just
one-third of the level seen in 2006.

However, while the market’s outlook is promising for the next 24 months,
“the report stresses that current construction activity has been reduced
to 20% of that achieved in 2007″,  Spanish rents rose by 0.7 per cent in April.

Figures from the National Statistics Institute showed that rental rates
increased compared to April 2011, with only two regions recording a
decrease in price: Murcia and La Rioja, where prices fell by 1.2 per cent
and 0.3 per cent respectively.

Rents increased by the highest amount in Catalonia, 1.4 per cent, followed
by Asturias and the Basque Country, where rates jumped by 1.2 per cent.
Rents rose by 1.1 per cent in Castilla y Leon and 1 per cent in Galicia.

Increases of less than 1% occurred in Andalusia (0.8%), Melilla (0.7%),
Ceuta (0.7%), the Canary Islands (0.6%), Extremadura (0.5%), Castilla-La
Mancha (0.5%), Cantabria (0.4%), Aragon (0.4%), the Balearic Islands
(0.4%), and Madrid (0.2%).

Source: Kyero

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Brits amongst the most active purchasers in Spain and the islands

May 15, 2012 – 9:27 am

Brits active in property market in Tenerife and Spain

Official figures show that Brits were among the most active purchasers of homes in Costa Blanca last year, along with the Russian and Norwegians, which collectively made up 80% of all transactions in the region.

According to figures obtained from Spain’s notaries, at least 9,200 foreigners bought holiday homes on the Costa Blanca last year, including 5,200 in the Catalonia region Costa Brava/Dorada, and 4,600 in Malaga  Costa del Sol; Balearics (2,700), and Murcia (1,500).

José Vicente Dómine, Director General of Public Works for the Generalitat (Valencian regional government), told the press that more overseas nationals purchased bought homes on the Costa Blanca last year than in Madrid and Andalusia combined, and almost as much as Catalonia, the Balearics, and Murcia combined.

While the Spanish property market continues to suffer from an oversupply of homes, now is a great opportunity “for foreign buyers to bag a bargain on the Spanish coast,” said Spanish property commentator Mark Stucklin.

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Rising airport charges could cost Spain and Tenerife’s tourism

April 24, 2012 – 9:33 am

Rising airport charges could damage tourism in Tenerife, the Canary Islands and Spain

Rising airport charges could cost Spain 2.87 million tourists, industry figures have warned. The Alliance for Tourism Excellence, Exceltur, labelled the increase in charges as “disproportionate” following their announcement in the State Budget for 2012. The fees, announced this month, could cost the country 2.87 million visitors, the association warned. The reduction in visitor numbers could amount to €1.64 million each year. The new rates, which are expected to be incorporated into ticket prices, have sparked fears that airlines will turn to other beach holiday destinations as a cheaper alternative to Spain, a move that could have serious implications for Spain, a country which relies upon tourism as a major form of income in a post recession climate. Airports expected to be most affected include Barcelona El Prat, which could lose 1.16 million tourists, Madrid Barajas, with 945,115 fewer visitors, and Palma de Mallorca, which could see tourist numbers reduce by 268,567.

Source: Kyero.com

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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.”

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Good news for property investors in Spain

March 28, 2012 – 4:13 pm

In some good news for property investors, Spanish airline Iberia has launched a new low-cost airline. The new airline, Iberia Express, commenced operations with prices starting at €25 for a one way ticket. Iberia Express will cover Spanish cities including Madrid and the islands such as Ibiza, Fuerteventura and Lanzarote in the Canary Islands.

The launch follows the January collapse of Spain’s fourth-largest airline Spanair. The low cost Iberia Express has 500 staff and has a fleet of four Airbus A320 aircraft, according to Iberia Express chief executive Luis Gallego. “The containment of costs will enable Iberia Express to grow and compete with the low-cost operators,” he said.

International Airlines Group is the ultimate parent, which was formed by the merger of Iberia and British Airways in 2011.

Source: FinFacts

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Spanish property sales increase in January

March 16, 2012 – 10:09 am

Property sales in Tenerife and Spain increase

Spanish property sales increased by 42.3% in January compared to the previous month, but continue to fall on an annual basis, according to data provided by the National Institute of Statistics (INE).

INE figures show that property sales in January fell by 26.3% compared to the same month last year, amounting to just 33,087 transactions.  

More than half – 57.1% – of all property sales in January occurred in Andalusia (5,644), Catalonia (4,627), Madrid (4,411) and Valencia (4221).

INE’s figures are a further blow to the Spanish property market, which continues to struggle as a consequence of Spain’s economic troubles and an irresponsible 10-year construction boom, which started around 1997.

Based on the number of Spanish homes sold in January, sales in first quarter of 2011 are on course to be lower than the last quarter of 2011.

Addition figures from the Housing Department in the Ministry of Public Works reveal that a total of 105,560 homes were sold in Q4 2011.

A total of just 347,305 residential properties were sold in 2011, representing the lowest level since the crisis started in 2008 and 64% below on 2006, when 955,186 residential properties were sold

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Cheaper homes in Spain as sellers try to attract more buyers

February 17, 2012 – 2:33 pm

Cheaper rental and sale property prices in Tenerife and Spain

Resale Spanish property asking prices continued to fall last month, as more vendors slashed prices in a bid to secure a sale. The latest home price index published by idealista.com shows that the average price of a home in Spain depreciated by 9.4% compared to January 2011.

The figures provided by the Spanish property portal reveal that January 2012 was the worst month since the Spanish housing crisis started four years ago. On a month on month basis, asking prices of homes in the idealista.com database depreciated by 1.9% to an average price of €2,045sqm (£1,712sqm) suggesting that homeowners are becoming more realistic about the need to reduce property prices if they are going to have any chance of attracting more home buyers.

It represents the biggest fall in asking prices since idealista.com started publishing the index before the property crash got underway in 2008.

On a monthly basis, prices fell the most in Castille La Mancha (-2.3%), followed by The Balearics, Asturias and Andalucia (-2.1%).  With property prices falling, housing affordability has somewhat improved in Spain, based on average property prices versus average gross annual household income, which has fallen from 7.7 years at the peak of the property boom to a current rate of 6.2 years, according to the Bank of Spain.

Spanish families might welcome more affordable housing,  but housing is still much more expensive than it was before the boom, when it cost just 4 years gross annual income or less.

“There are several reasons why the affordability ratio has not improved more with falling property prices, including higher mortgage borrowing costs and lower household income, said Spanish property commentator Mark Stucklin.

He continued: “None of this really applies to the cost of holiday-homes on the coast, where prices have fallen substantially more than the national average, and where foreigners with higher incomes than the Spanish national average tend to buy.”


The average cost of renting a home in Spain also fell last year as rental prices depreciated in 77% of Spain’s primary rental markets, the latest to data from Idealista.com and the Public Rental Company show.

The greatest rental price decline was recorded in Toledo by 8.7%, followed by a 6.8% drop in Oviedo. In Spain’s largest cities of Barcelona, Madrid and Valencia rents fell by 3.1%, 1.3% and 4% respectively.
However, rents actually increased in Lleida, Bilbao and Alicante rentals, rising 11.2%, 4.2% and 4.1% respectively.

These rental price declines follow on from falls in 2010, suggesting that Spanish homes are becoming cheaper to rent, as well as buy.

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Valencia is the most popular area in Spain for property

February 13, 2012 – 12:05 pm

Tenerife still a popular destination to purchase property

The most popular area of Spain for property is  Valencia, according to the MoveChannel. The information, which is based upon the enquiries received by the property portal in the last 12 months, shows that buyers scour South-East Spain for real estate, with Valencia attracting 32.24 per cent of all enquiries.

Close behind is Andalucia, which received 30.84 per cent of Spanish property enquiries, followed by Murcia, which accounted for 19.04 per cent. These top three regions carve out a clear favourite corner for buyers, who look almost exclusively at homes for sale in the Costas: Costa Blanca, Costa Calida, Costa del Sol and Costa de la Luz all fall within the three regions, while Costa Brava is located in the other key popular area of Catalunia, which is ranked sixth.

The least popular areas are La Rioja and Cantabria, even  Madrid, surrounding the country’s capital, received just 0.08 per cent of all enquiries, far behind that of rising tourist zone Galicia .

Buyers also search for sun and sand away from the mainland. Together, the Balearic Islands and Canary Islands accounted for over 12 per cent of Spanish real estate enquiries. The Balearics alone received 5.13 per cent, more than the whole of northern Spain combined. Given the wider popularity of Spain’s island regions, the absence of the Canaries or Balearics from the top 10 suggests that buyers search for property by island as opposed to looking for specific cities.

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Rental prices fall in Spain’s cities

February 3, 2012 – 10:25 am

Rental property prices fall in Spain and Tenerife

Rental prices fell in 77pc of Spain’s primary rental markets (cities), according to a study by Spanish property portal Idealista and the Public Rental Company(SPA).

Rents fell the most in Toledo (-8.7pc) and Oviedo (-6.8pc) but rose in Lleida (+11.2pc), Bilbao (+4.2pc), and Alicante (+4.1pc).

The average cost of renting a home in Spain declined in 2011, as you would expect with property prices falling.

In Spain’s biggest cities, rental prices fell 1.3pc in Madrid, 3.1pc in Barcelona and 4pc in Valencia.

The latest annual rental decline follows a bigger decline in 2010, so the cost of both buying and renting a homes in Spain has been getting cheaper for several years.

The study was based on 38,000 properties listed for rent in the 12 months to the end of December.

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TINSA and government house price index shows falling prices

February 2, 2012 – 10:37 am

Tinsa and government index shows property sales in Tenerife and Spain down in 2011

The House Price Index published by the Department of Housing shows house prices falling 6.8pc in 2011, and 19pc since the peak

Last week it was the appraisal company Tinsa’s house price index showing prices down 8pc in 2011. Now it’s the turn of the Government to publish it’s housing price index for 2011, showing a broadly similar decline of 6.8pc over 12 months to the end of December .

Both the Tinsa index and this one show  a double-dip starting at the end of 2010 and price-falls accelerating in the course of 2011.

After adjusting for inflation, Spanish house prices fell 9.6pc in real terms in 2011. So anyone with an inflation proof income (the majority of Spaniards with indefinite labour contracts) saw the real cost of buying a house fall by 10pc last year, or more if you include the 50% reduction in VAT on new homes.

Prices fell the most in Aragon (-10.4pc), Madrid (-8.2pc), Andalucia (-7.8pc) and Catalonia (-7.7pc), and the least in The Basque Region (-3.1pc), Asturias (-2.7pc), and Extremadura (-2.1pc). According to Fernando Encinar, head of research at the  Idealista, “there is no reason to think that anything is going to change in 2012.”

Of course you have to take all the official figures with a large pinch of salt. If the official index shows declines of 6.8pc, the reality was probably something between 10 and 15pc.

Soon to be published, and all that remains to be seen for 2011, is the official House Price Index from the National Statistics Institute, which should come out in the next month or two, and which tends to be used by the international press. Based on past form it will probably understate price declines more than any other index, which partly explains why so many articles in the international press say that Spanish property prices haven’t fallen enough.

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