Euribor rate falls for fourth month in a row

January 4, 2012 – 11:40 am

Euribor down again which means mortgage repayments up in Spain and Tenerife

Euribor, (12 months), the interest rate typically used to calculate mortgage repayments in Spain, fell for the fourth month in a row to end the year at 2.01, a percentage fall of 1.7pc on the previous month. Compared to the 12 months ago, however, Euribor rose by 33.4pc, meaning higher mortgage repayments for all those on annually resetting mortgages.

The European Central Bank (ECB) cut base rates from 1.25 to 1.00 during December, the second cut in 2 months since the Italian Mario Draghi took over as the new Governor. Markets were expecting the cut, and judging by Euribor’s recent trend do not expect rates to increase any time soon. As you can see from the following chart, Eurozone base rates are still significantly higher then the US, the UK, and Japan.

New mortgage lending continued to shrink in October, with new mortgage approvals down 43pc to 23,193 (and down 46.5pc by value), according to figures from the INE. It’s clear the credit crunch is well and truly back in Spain.

By Angela | Posted in Economy, General, Holiday, Inspirational, Property, Tenerife, Things to Do | 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)

Euribor Rate

December 5, 2011 – 10:58 am

Euribor down again which means mortgage repayments up in Spain and Tenerife

Euribor(12 months), the interest rate normally used to calculate mortgage repayments in Spain, fell for the third month in a row to 2.044pc in November, a percentage fall of -3.1pc on the previous month.

After rising abruptly in the first quarter of the year, Euribor has been stable or declining since May in expectation of a cut in the base rate.

Mario Draghi, the new Governor of the European Central Bank (ECB), announced a cut in base rates of a quarter of a point to 1.25% just a few days after taking over from Trichet at the beginning of November. In the face of alarming economic headwinds, markets expect the ECB to cut the base rate even further, hence the fall in Euribor.

When the Euribor goes  down, mortgage payments  go up.The fall in Euribor will not be much immediate comfort for those with an annually resetting mortgage. Euribor is now 33pc higher than it was 12 months ago, meaning repayments on the average mortgage will rise by 400 Euros/year.

The Credit Crunch is back in Spain with a vengeance. New mortgage lending fell 42pc in September year-on-year (to 30,808), and the average value fell 6pc to €111,934, according to figures from the Statistics Institute (INE). Lower mortgage lending = less money chasing homes , downward pressure on prices and more bad news for vendors.

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

Home sales fall once more

November 30, 2011 – 3:21 pm

Homes sales fall once more according to Spanish paper El Mundo

Home sales fell 31.9% in the third quarter of 2011 over the same period of 2010, accounting for 84,852 transactions, and representing the lowest figures recorded by the Association of Property Registrars since 2005.

The agency attributed the data to the difficult economic situation and high unemployment, which has not been alleviated by the reduction in prices and mortgage borrowing or by low interest rates.

El Mundo reported that, of the total number of homes sold between July and September, 41,734 were resales (28.7% less), a figure which marks a new low.

The remaining 43,118 homes sold were new (34.7% less), a figure that is above the record low reached in the last quarter, mainly due to the lowering of VAT for the purchase of housing (from 8 % to 4%) which came into force in August and will continue until the end of the year.

Source: Kyero

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

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.

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

Significant fall in property prices according to Tinsa.

November 10, 2011 – 9:39 am

Property prices falling in Spain especially by the coast

According to José Manuel Galindo, President fo the APCE builders and developers association, the fall in property prices, has been “significant”.

Prices are now down a total of 26pc in real terms since their peak, says Galindo, taking into account inflation and a reduction in VAT. When it comes to holiday homes on the coast, however, the falls have been more brutal. Prices on the coast have fallen by 32pc, according to Tinsa, and anecdotal evidence suggests it might even be higher than that.

Galindo stressed that many developers cannot afford to reduce prices any further. “Developers can’t sell below the cost of their mortgage, because they no longer have the money to afford the adjustment,” he explained.

 In the long-run, price will fall to affordable levels, regardless of how much builders or banks have to lose in the process.

Turning to the collapse in sales (down 40pc in August alone) Galindo blamed it on the lack of credit and local “purchasing capacity” and pinned his hopes on foreign buyers heping Spain mop up its glut of close to 300,000 unsold new homes on the coast.

He also described the recent Government led road show to promote Spanish property around Europe “rather ineffective”.

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Euribor rate rises

November 9, 2011 – 10:52 am

Euribor rates rises again in Spain and Tenerife

Euribor (12 months), the interest rate normally used to calculate mortgage repayments in Spain, rose to 2.11pc in October , a percentage increase of 2.1pc on the previous month.

Over 12 months Euribor was up 41.1pc, which means higher monthly mortgage payments for those with annually resetting Spanish mortgages. Average mortgage repayments will rise by around €45/month, €540/year

New mortgage lending is the lifeblood of the housing market without which most Spaniards cannot afford to buy homes. So it is particularly worrying that new lending fell 49pc in August compared to a year before, the lowest level on record for this data series published by the Statistics Institute (INE). New mortgage lending has now fallen for 16 consecutive months, suggesting that the credit crunch is still alive and well in Spain.

The average new mortgage value in August was €106,922, 12.6pc lower than a year before.

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

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

Euribor down a fraction in August

September 14, 2011 – 9:42 am

Euribor falls a fraction affecting mortgages in Tenerife and Spain

Euribor (12 months), the interest rate normally used to calculate mortgage repayments in Spain, fell a fraction to 2.097pc in August, a percentage fall of -3.9pc on the previous month.

The rise of Euribor seems to have peaked, at least for the time being. With markets fretting about a European debt crisis, expectations of rising interest rates have fallen, taking the heat off Euribor rates.

On an annualised basis, however, Euribor is still 48pc higher than it was a year ago, meaning higher monthly repayments for borrowers with variable-rate mortgages.

Repayments for a typical mortgage (150,000 Euros, 25 years) will go up by around 48 Euros /month, or 582 Euros / year, bad news for many a stretched household budget in Spain.

New mortgage lending collapsed 42pc in June (to 32,680 new mortgage approvals) compared to a year before, the 14th consecutive month of annualised falls, and one of the lowest levels on record.

The average new mortgage value signed in June was 109,431 Euros, down 8pc compared to June last year, with an average interest rate of 4.12pc, up 4.8pc on last year.

All of which means less money around to fuel demand for Spanish property, putting further downward pressure on prices.

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

Opportunities to purchase properties at low prices in Tenerife and Spain

September 6, 2011 – 8:23 am

Property bargains available in Spain, Tenerife and the islands

During the last three decades, hundreds of thousands of Britons have purchased property in Spain. Nonetheless, a surplus of villas and apartments has spawned due to mortgage defaults from British buyers. By noting the declining property prices during the month of June, according to valuation and consulting firm Tinsa’s latest General IMIE (Spanish Property Market Index) report, one can see the opportunity to purchase Spanish property at a low price. This is why British investors are continuing to invest in the Spanish real estate market.

Along the Mediterranean coast, the Balearic and Canary Island archipelagos are amongst the most popular tourist and investment attractions in Spain. The Balearic Islands feature Mallorca, Menorca, Ibiza, and Formentera. With its Opera House, Mallorca offers a stately and elegant experience, while King Juan Carlos’ castle sits in Palma. Menorca offers a drier climate than the aforementioned Mallorca, in addition to cool breezes. Menorca has also garnered fame for its production of leather goods and gin. Ibiza has recently improved its reputation from years past, and Formentera offers an intimate and secluded getaway.

The Mediterranean Coast offers numerous overseas investment opportunities.

From the bright lights of Benidorm to the opulence of Moraira and the resorts towns of Javea and Denia, the Costa Blanca offers a smorgasbord of options. The Costa Blanca is serviced by Alicante airport, now supplemented by inexpensive flights to Valencia on the northern Costa. This enhances tourists and property buyers’ access to the Spanish region during the year. The Costa features the Mediterranean highway, which runs alongside the coast for virtually the entire length of the Costa Blanca, enabling easy travel.

Tenerife and the Canary islands, firm favourites over the years with the British has property available at prices not heard of during the last five years. Maybe this is the time to bag that bargain?

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