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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Good news from the Spanish property market

October 18, 2011 – 8:58 am

Propert sales improve in Spain and Tenerife especially prime property by the coast

At last some good news from the Spanish property market , foreign investment is up strongly on last year. Foreigners invested 1.3 billion Euros in Q2 this year, up 16pc on the first quarter and 37pc on the same time last year, according to figures from the Bank of Spain.

Foreign investment is still some way (32pc) from the peak it reached in Q2 2003, when it hit 1.9 billion Euros, but there has been a clear improvement in the last 2 quarters.  Sales to foreigners have picked up as prices fall, showing how price-sensitive foreign demand for Spanish holiday homes is.

Certainly prime property on or near the coast in Tenerife is attracting greater interest once more.

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

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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All time record visits to Spain in August

October 3, 2011 – 1:52 pm

Record numbers of visitors to Spain and Tenerife during August

In August this year 7.64 million foreign tourists visited Spain, an all-time record for the country.

According to reports from FRONTUR, August saw a 9.4 per cent increase in the number of tourists from 2010, indicating a new monthly high for the booming Spanish tourism industry.

Since the beginning of 2011, 40 million tourists have visited Spain, a 7.8 per cent increase over the same period last year. The Ministry of Industry which produces the tourist movement survey suggests that August visitor figures ‘reinforces the good prospects of Spain in 2011′ highlighted by the fourth best year in the history of Spanish tourism, a great achievement considering the economic recovery only began back in the second half of 2010.

Further data indicates that while Brits are one of the most regular and indeed loyal visitors to Spanish shores standing at 9.5 million, there has been impressive increases in numbers of other foreign visitors, with a rise in American, German and talian visitors. By destination, Catalonia was the largest recipient of foreign tourists receiving 1.9 million visitors in August, while the Balearic Islands followed closely behind with 1.8 million.

Ignacio Osle, Sales & Marketing Manager of Taylor Wimpey España, comments, “Despite difficult economic conditions across mainland Europe, Spain is one of the most resilient holiday destinations, remaining popular with foreigners whatever the market conditions. Recently, the IMF stated that Spain will be the only country that will experience higher levels of growth next year compared to its European counterparts of France, Italy and Greece.”

The rising number of overseas visitors continues to spell good news for the property industry. Osle adds: “Mallorca is one such destination that has performed better on the property front than its mainland counterparts offering strong rental market potential.”

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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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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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