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

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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

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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

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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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If Spain had kept the Peseta……..

November 18, 2011 – 3:26 pm

If Spain had kept the Peseta would the property crisis have been as bad?

If Spain had kept the Peseta the bubble would never have been so big, claims Max Otte, an economics professor and fund manager who forecast the crisis in a book published in 2006.

Otte explains that low interest rates that came with Euro-zone membership are the root of the problem. Egged on by the banks, Spaniards binged on cheap mortgage credit and drove the property market into a frenzy, making a traumatic bust inevitable.

Given where we are now, Spain would have been better off with higher interest rates and steady growth outside the Euro-zone, argues Otte in comments reported in the Spanish press. The boom years were no worth this bust.

He also claims it’s only a matter of time before Greece abandons the Euro, and recommends that Spain does so too. The Euro has been a waste of time and money, says Otte.

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Spanish land registry info available in English

November 15, 2011 – 10:58 am

Spanish Land Registry information now available in English

Spain could be exacerbating its property market’s problems by making Land Registry information available in English, according to an overseas property lawyer.

Peter Esders, solicitor at Chebsey & Co., told OPP in a letter that more information being made available online in English leaves him “anticipating problems. I am worried about the fact that more information is being given in English online at the Land Registry,” he said.

“Unscrupulous sellers will tell buyers that they don’t need a lawyer because there are land registry searches available in English and they can supply a notary at the end.”

Source: OPP

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Spanish property bargains

November 11, 2011 – 10:52 am

Property bargains in Spain and Tenerife

Despite dramatic property price reductions by many vendors across Spain, bargain hunters are taking advantage of the weak Spanish property market and are offering considerably below asking prices, fresh research shows.

 The latest figures provided by Idealista reveals that in September, the average offer made online through the Spanish property portal was 21.7% below the asking price. Having analysed over 500,000 offers since January 2011, Idealista’s research found that January, March and September are the months with the greatest volume of offers made by purchasers, whilst June was the weakest month in terms of demand. Spanish property investment opportunities The majority of Spanish property investors – 73% – believe that the Spanish property market will improve within the next 18 months, according to a new survey.

The latest study by international property consultants CB Richard Ellis found that three in four Spanish property investors expect market conditions to improve, despite the fact that prices are still falling across many parts of the country. The latest property investment barometer from CB Richard Ellis showed that Spain is expected to improve in early 2013, while 57% of those surveyed said they planned to invest in the Spanish property market within the next 6 months. The majority of investors are interested in buying commercial properties, rather than residential, with half of investors looking to buy offices, while 40% are interested in prime shopping centres. Just 7% of investors said that they plan to buy residential property.

A lack of mortgage liquidity remains a major stumbling block in Spain, which is why three in five investors believe that foreign investors with greater access to financing will drive the market recovery. Take advantage of the weak Spanish property market Domestic investors are taking centre stage in Spain’s investment market making up 66.2% of investors in Q1-Q3 2011, up from 33.3% in the same period in 2010 according to international real estate advisor Savills. Total volume in Spain’s investment market totalled almost €1.25bn (£1.07bn) in the first three quarters of 2011. The firm notes that as well as ongoing sales of large mixed use portfolios which banks are attempting to remove from their balance sheets, local authorities are also selling assets to gain liquidity.

Both the Andalusian and Catalan Regional Governments have portfolios on the market, including well-located office assets, which Savills observes are attracting interest from both opportunistic and core investors. Danny Kinnoch, international investment director Savills Spain, says: “In recent times there has been a two tier market with opportunistic investors focused on portfolio and large scale individual deals while the more traditional core investors remain focused on well-located, high-quality assets with high occupancy rates and solvent tenants on long-term lease contracts. Domestic investors continue to dominate the core market but international players remain on the lookout for opportune deals.” According to Savills major international players including Orion, RREEF, Generali Lend Lease, Doughty Hanson, AXA, Perella Weinberg and Rockspring have all been active this year. Savills has observed increased investor interest in Spain’s hotels market, a shift from the historically dominant retail and office markets and a reflection of the strength of tourism in a challenging economic climate. Key deals in the first three quarters of 2011 include Grupo Millenium’s purchase of two hotel assets, Hesperia Madrid from Hesperia for €80m (£69m) and Tryp Centro Norte from Colonial for €30m (£27m), both in Madrid as well as Mansion Services’ acquisition of Intercontinental Madrid from Morgan Stanley for approximately €68m (£58m). The total investment volume Q1-Q3 represents a fall of 52% compared to the same period in 2010, but with more realistic pricing and improved market sentiment Savills expects 2012 investment volumes to improve on 2011. Kinnoch says: “With an improvement in market sentiment in relation to other Euro countries combined with more realistic pricing taking into account the macro-economic situation in Spain, we expect 2012 investment volumes to exceed those of 2011.”

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Spanish commercial sector taking longer to recover

November 4, 2011 – 3:13 pm

Commercial property in Tenerife and Spain taking longer to recover

The Spanish commercial property sector is likely to take longer than 12 months to recover, new research has suggested.

Bloomberg Businessweek reported on data published by Savills, which stressed that a lack of finance coupled with the wider European debt issues will slow the market’s recovery.

According to the firm’s figures, investment in Spanish commercial real estate is now at its lowest level since 2001, with just €1.25 billion (£1.1 billion) in deals concluded in the first nine months of this year.

This represents a 52 per cent drop over the same period in 2010, with the news provider noting that a lack of funding from Spanish banks is deterring investors.

Source: PropertyShowrooms.com

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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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