Increasing numbers of Scandinavians are taking advantage of the crisis to buy holiday homes in Spain

April 17, 2012 – 9:34 am

Scandanavian buyers of property are looking to Tenerife and Spain for investment

According to a recent article at the website Investment Europe, “Figures published by Fastighetsbyrån, part of Swedish banking group Swedbank, suggest Swedish and Norwegian property buyers have pushed hard into the Spanish residential property market, as British and German buyers have withdrawn in the past half-decade.”

The article goes onto explain that “over the four year period, the number of UK buyers has dropped by 65% and German buyers by 3%. However, the number of Norwegian buyers is up 108%, and Swedes by 138%. The total market is still down 33% from its 2007 peak, the figures also suggest.”

Scandinavians are tempted by Spanish property, their economies are relatively strong, as are their currencies (the Norwegian and Swedish Krone/Krona have both risen by around 5pc against the Euro since the Spanish property bubble burst at the end of 2007, whilst the British Pound has fallen almost 20pc); Spanish property prices on the coast are down around 50pc or more from the peak, and the sun doesn’t shine much back at home. So Scandinavian buyers are taking advantage of the market to snap up bargains on the Mediterranean coast, and who can blame them?

Scandinavian buyers are not a panacea for the glut of holiday homes on the coast. For a start, with the pick of the best properties, I doubt they will be tempted by  the cheaper end of the market on the coast that also needs to be sold.  Unfortunately, there just aren’t enough of them to take the place of the retreating Brits, who dominated the market during the boom.

By Angela | Posted in Economy, General, Health, Holiday, Inspirational, Miscellaneous Articles, 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)

More downbeat news for the Spanish housing market

April 4, 2012 – 7:45 pm

More downbeat news on Tenerife and Spain's property market

Another clutch of downbeat news stories from the Spanish housing market: The value of house sales fell 37.5pc in 2011, according to new figures from the Government (Fomento). There were 307,931 home sales last year (excluding social housing), valued at 50.5 billion Euros, 37.5pc down on the year before.

More or less the same story, but from a different source, comes the news that there were 370,204 home sales last year (including social housing), according to the property register (registradores.org). That Spanish housing market is now the smallest it has been since the Property Register started publishing this data series back in 2005. Transactions fell 11pc in the last quarter of the year.

Source: Spanish Property Insight

By Angela | Posted in Economy, General, Health, Holiday, Miscellaneous Articles, Property, Tenerife, Things to Do, Uncategorized | 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
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)

Fitch ratings property prediction for Spain

January 10, 2012 – 3:57 pm

Property bargains in Spain and Tenerife according to Fitch

Spain’s property market will not grow in 2012, the Fitch ratings agency has predicted. The country’s GDP growth is forecast at zero per cent, with Fitch adding that any growth will be limited to the long term, but agents are confident that the country’s continuing debt crisis remains good news for investors.

With property prices declining by 8.9 per cent in the third quarter of last year, according to the recent Scotiabank report, houses in Spain are now over a quarter cheaper than in 2007. This represents a market full of bargains for foreign buyers, boosted by the government’s decision at the beginning of the year to reinstate 2011′s reduction in VAT.

While Spanish officials have since announced plans to raise income taxes to encourage economic growth, at the moment VAT remains 50 per cent cheaper for new homes, with a stamp duty of 1.2 per cent.

Sergio Bolivar comments: “This means that a person who buys a new property worth €200,000 will save €5,600 compared to buying a second hand one. Even with the European climate the way it is, now is a great time for investors to pick up affordable Spanish property.” Tenerife is clearly an area awash with bargains now

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

Lowest level of quarterly sales since crisis began but Canary Islands buck the trend

December 19, 2011 – 10:58 am

Canary Islands buck the trend of falling Property sales in Spain

The lowest level of quarterly sales occurred since the crisis began, according to figures from the property register.

There were 84,852 homes sold in Spain between July and September, 31.9pc less than the same period last year and 9.3pc less than the previous quarter. It was the lowest quarterly level of sales since the data series began.

 Q4 may well be another record low, but after that  the market is expected to  bottom out in the course of 2012. Which is not to say there will be a strong recovery after that , but at least the market will have stopped shrinking.

However, if the credit crunch gets worse, then we could still find major problems as  mortgage financing is the key to any market recovery. However parts of the  Canary Islands have bucked the trend and may well continue to do so as  tourism increases in 2012

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

Spanish property market over the worst?

December 8, 2011 – 5:20 pm

Property slump over the worst in Spain and Tenerife?

A growing number of experts believe that the Spanish property market is showing tentative signs of recovery following one of the most spectacular housing crashes of all time.

Spanish property sales and prices have plummeted across the country in the past five years, on the back of the global credit crisis, a string of corruption scandals, a chronic oversupply of housing, a string of illegally constructed homes, a weak economy, high unemployment and a record level of foreclosures.

It is estimated that property prices have fallen by up to 70% in some parts of the country since the market peak of late 2006 leaving many people in negative equity and others facing repossession.

Although property prices are unlikely to bounce back anytime soon, some property commentators and professionals feel as though the market is reaching the bottom of the downturn.

Mark Stucklin of Spanish Property  commented: “I am of the opinion that this is about as low as the Spanish property market will go in volume terms. Q4 may well be another record low, but after that I expect the market to bottom out in the course of 2012. This is not to say there will be a strong recovery after that , far from it. But at least the market will have stopped shrinking.”

The latest report Global House Price report from Knight Frank suggests that market in Spain, along with some other struggling European nations, could be  over the worst

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

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

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

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.

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