Plenty of advice for Tenerife property hunters at Property Investor Show

March 30, 2011 – 2:08 pm

Property bargains in Tenerife, Canary Isles and Spain

Lots of advice, plenty of opportunities and optimistic statements, but fewer exhibitors at the Property Investor Show, the UK’s premier event for property investors held last weekend at London Docklands Exel Exhibition centre.

However, there was plenty of essential information on “Where to” and “How to” invest provided from keen exhibitors just about managing to cope with the early rush of visitors with property investment on their minds. More than 30 seminars focused on topics ranging from “How to Spot a boom and a bust” to “How to win in a recession”.

Many small investors, were looking to acquire from the ongoing “Sale of the Decade” in the Spanish market, where banks are disposing of their unwanted toxic assets with huge discounts of up to 56% and generous mortgages between 80-111%.  A spokesman for a Spanish distressed property site  added: “Putting your money in the  Spanish property markets could be the perfect hedge for investors with sunny Spain for family holidays and some equity gain a few years down the line.”

Two properties can be bought for a realistic amount in Spain – one to rent out, the second for family enjoyment, with equity gains to look forward to when prices start to rise again in the world’s top second home destination.

Tenerife and the Canary Islands have some excellent bargains, even in the prime property sector, but prices will be rising again soon judging by the renewed interest of late.

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

Opportunities available in Spanish real estate

January 7, 2010 – 5:03 pm
The latest news from Spain and Tenerife's Euribor and mortgage situation

The latest news from Spain and Tenerife's Euribor,mortgage and property situation

Mikel Echavarren, an experienced professional in touch with many different companies in the property sector  is worth listening to. Here is a selection of his recent comments

Do you think there are any good investment opportunities in Spanish real estate today?

I think so but they are risky. In three years we’ll probably be kicking ourselves for not advising investors to invest now. There aren’t many opportunities in commercial real estate because there isn’t much product and rents haven’t yet adjusted. In residential, on the other hand, the correction has been very strong and fast. The ideal profile now is an opportunistic investor buying properties off banks by taking on the existing debt, a type of real estate venture capital.

So you think there are opportunities in a residential sector because the adjustment has already taken place?

There are hundreds of thousands of possible transactions, but not many genuine opportunities. What there is not is any financing, so anyone who wants to take advantage of this market has to take the debt with the asset, but there are still very few people prepared to do that today.

Has the price of housing and land touched bottom?

House prices touched bottom some time ago, they have already fallen all they had to fall. And the price of land has fallen faster than house prices although it could even fall a bit more. We have been saying at the top of our lungs that the price statistics published by the government are worthless, and damaging to the sector because they give international analysts the impression we are a country of idiots. In the US and the UK prices have fallen around 20% from the peak whilst here we have only fallen by 8%.

What’s wrong with the official statistics?

They are based on valuations. One has to look at real property transactions and a survey of developers to see not only their asking prices but how far they are prepared to drop prices to sell.

Do you think there is any residential property that will never sell?

What there is is a stock of land that will never be sold, at least not in 10 years. There are areas of Spain where the town plans look like they were designed for an invasion of extraterrestrialsOn the other hand, the stock of finished property will be absorbed sooner.

Is there any real demand for housing at the moment?

Yes, quite a few homes are being sold. We would have to place it at more than 200,000 homes a year. What is not selling is off-plan, as there you take the risk of the developer or builder going bankrupt. It’s a good time to buy newly built homes with Euribor at 1.24%. They won’t be any cheaper next year. And when prices start to rise they will do so at a rate of 10% per year.

How does one get the Spanish property sector to recover?

The residential sector is already recovering, just not the developers, who won’t see the light at the end of the tunnel for three years; it is very bleak for them. Clients of ours tell us they have sold a lot this summer, and some banks tell us that they have had more mortgage requests this summer than in all 2009. Furthermore, we believe that developers have dropped their prices to the minimum. There is mortgage financing available, not much, but there wasn’t any at all in 2008, and now there is. Mortgage costs are low, and it appears that the future is not going to get any worse. The recovery is underway, although this won’t show up in the official statistics until the first half of 2010. As soon as there is a general perception that things are getting better, house prices will stop falling and start rising.

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

Opportunities still exist in Tenerife and Spain’s property market.

December 14, 2009 – 4:05 pm
Opportunities still available in Tenerife, the Canary Islands and Spain

Opportunities still available in Tenerife, the Canary Islands and Spain

We think there are  good investment opportunities in Spanish  and Canarian real estate today, but some are risky. In three years we’ll probably be kicking ourselves for not advising more investors to invest now. There aren’t many opportunities in commercial real estate because there isn’t much product and rents haven’t yet adjusted. In residential, on the other hand, the correction has been very strong and fast. The ideal profile now is an opportunistic investor buying properties off banks by taking on the existing debt, a type of real estate venture capital.

There are hundreds of thousands of possible transactions, but not so many genuine opportunities. What there is not is any financing, so anyone who wants to take advantage of this market has to take the debt with the asset.

House prices touched bottom some time ago, they had to fall. The price of land has fallen faster than house prices although it could even fall a bit more.  In the US and the UK prices have fallen around 20% from the peak whilst here we have only fallen by 8%. Valuations appear to be down 30% in 2 years.. One has to look at real property transactions and a survey of developers to see not only their asking prices but how far they are prepared to drop prices to sell.  Quite a few homes are being sold more than 200,000 homes a year in fact. What is not selling is off-plan, as there you take the risk of the developer or builder going bankrupt? It’s a good time to buy newly built homes with Euribor at 1.24%. They won’t be any cheaper next year. And when prices start to rise they will do so at a rate of 10% per year. Perhaps that purchase in Tenerife should be made sooner rather than later!

The residential sector is already recovering, just not the developers, who won’t see the light at the end of the tunnel for three years; it is very bleak for them. We believe that developers have dropped their prices to the minimum.  The recovery is underway, although this won’t show up in the official statistics until the first half of 2010. As soon as there is a general perception that things are getting better, house prices will stop falling and start rising.

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

European property prices to improve?

August 14, 2009 – 2:51 pm
European property prices set to improve?

European property prices set to improve?

Property prices across Europe are expected to fall at a slower rate as the economy starts to level out, according to a report released by Invista Real Estate Investment Management. Conditions for the economy in the eurozone during the first half of this year were the worst since it was formed, although signs are that things are starting to improve.

The European Central Bank reports that more European banks have increased their lending, while the cost of borrowing has fallen sharply. The report says that improving property yields could increase the long-term attractiveness of  investing in property.

Tim Francis, director, Continental European strategy and research at Invista, says: “With improved visibility on bottom-of-the-cycle valuations, we are in a better position to judge market pricing against fair value. This will assist in identifying attractive investment opportunities across these markets, some of which are experiencing distressed selling.”  We expect deal flow to improve during H2 2009 as the other mature continental European markets including Spain and Tenerife catch up.

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