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property buyers have pushed hard into the Spanish residential property market, as British and German buyers have withdrawn in the past half-decade.”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)

Sterling high good news for Brits buying property in Tenerife and eurozone.

January 27, 2012 – 10:55 am

Sterling high against the Euro a boost for property buyers in Tenerife and Spain

There was good news for Brits seeking to buy property in the eurozone as sterling reached a 15-month high against the euro currency. The euro’s value depreciated against the UK pound on the back of fresh concerns regarding the the health of the eurozone’s banking system.

Sterling increased by 0.73% to €1.208 on Wednesday  its highest level since September 2010. The euro also fell 0.95% against the dollar to $1.293. Despite concerns about the fragile state of the UK economy, it is generally considered to be doing better than the Eurozone, which is struggling with a major debt crisis.

Geoffrey Yu, currency strategist at UBS, told Reuters: “Maybe the UK is approaching a consensus (for a recession) but it’s not there yet. And there’s no break-up risk, so people are more willing to allocate funding from a passive perspective at the start of the year.”

However, despite the recent recovery in the strength of the pound versus the euro, some currency experts do not expect sterling’s value to increase much further in the short- to medium-term.

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

Vendors need to come to terms with drop in sale prices

August 16, 2011 – 3:48 pm

Vendors need to come to terms with falling property prices in Tenerife

The vast majority of private vendors still haven’t come to terms with the drop in the value of their properties, argues José Luis Jimeno, MD of Noteges – a real estate and executive education portal.

According to Jimeno, pictured above, only vendors who drop their asking price 40pc to 50pc below the competition in their area have a hope of selling. As a result, 80pc of private vendors are asking prices that are out of the market.

Vendors on the coast, where there is a large glut of holiday homes, are even worse off. To make a sale, they will have to accept offers 60pc to 65pc below the prices they are asking today, he claims. “Private vendors are still trying to sell at boom prices,” says Jimeno, quoted in the Spanish press.

But Jimeno is not the only expert with something to say about asking prices. Juan Fernández-Aceytuno, MD of Sociedad de Tasación, one of Spain’s leading appraisal companies, recently said that sales close on average 15pc below asking prices, according to another recent article in the Spanish press. If he is right, then asking prices are not so far from reality as Jimeno suggests

Looking ahead Jimeno expects house prices to continue falling thanks to the bleak economic outlook in Spain.

His advice to vendors is far from sugar-coated. “It’s not a good time to sell, but if you have no alternative then make the sale now, because with every passing day your home will be worth less.”

That advice is particularly relevant to British vendors, who have to take into consideration exchange rates. The Euro is still strong against the Pound, benefiting British vendors repatriating capital to the UK, but the way things are going in the Eurozone, that might all change.

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

European Central Bank rate decision

May 11, 2011 – 1:55 pm

Euro stays virtually unchanged for travellers to Tenerife,Spain and Europe

A shortened trading week in the United Kingdom as well as the main focus for analysts being on the Bank of England and European Central Bank rate decisions gave rise to range trading dominating the market for the early part of last week.

The Pound fell across the board on Tuesday before settling into the weeks ranges after the release of weaker UK PMI manufacturing data. The main concern for markets is the stability of economic growth in Britain and how this impacts the Bank of England’s ability to manage inflationary pressures. The PMI manufacturing index fell to 54.6 from 56.7 which was a downwardly revised figure and triggered a selloff in Sterling due to the negative impact the figures had on interest rate hike expectations. Market are now speculating that the BoE may move back to a more dovish position and thus hold interest rate until early next year, although these expectations are frequently revised the impact on the Pound is obvious, the market sold Sterling. Market expectations were reaffirmed by later releases of construction and services PMI that weakened as well. The monetary policy decision from the Bank of England offered no surprises with interest rates of 0.50% and the £200bln asset purchase program both remaining unchanged.

The Euro saw little movement ahead of the ECB’s rate decision on Thursday as traders we focused on future interest rate expectations and divided on whether the next move higher by the ECB would come in June or July, this kept markets somewhat reluctant to take any positions ahead of the policy announcement. The European Central Bank kept interests on hold at 1.25% as expected but a shift in tone from ECB President Trichet during the post decision press conference where he took a less hawkish stance weighed heavily on the single currency. Trichet did not use any of the traditional ‘code words’ market have come to expect to signal further rate hikes rather opting for stating the Governing council would ‘monitor very closely’ developments in inflation. The result is an expectation amongst analysts that no rate hike will occur in June and that July is now more likely.

The Dollar had a number of influencing factors last week in the form of a broad-based commodity selloff and weakness in the Pound and the Euro due to changes in interest rate expectations. Silver has in recent months been pushed higher for the same reasons as gold; geo-political tensions, global economic uncertainty and the unprecedented cash injections by the Fed but the commodities movements have been far more exaggerated making it more attractive to speculators who took Silver sharply lower this week and triggered a knock-on effect slide in gold and oil, thus aiding Dollar gains. The ECB’s pause on interest rate hikes created Euro weakness that aided the Dollar further but US fundamentals in the jobs market came out to the downside putting the brakes on the Greenback trend higher until the release of stronger Non-farm payrolls figures. The data came out at 244K from the previous 216K that gave rise to initial Dollar strength but expectations remained that ultra-loose monetary policy from the Fed would continue which capped any gains made. 

Source: Baydonhill FX

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

Sterling slide against the euro and dollar is halted

February 17, 2011 – 12:18 pm

The sterling exchange rate against the euro affects those making property purchases inTenerife at present.

Sterling struggled for most of the week ahead of the Bank of England’s interest rate decision on Thursday. Recent speculation regarding potential interest rate hikes by the UK central bank saw traders buying into the pound but with low growth levels and inflation expectations indicating an increase in price pressures over the coming months the likelihood of a rate hike has diminished and concerns that premature monetary tightening could risk destabilising the UK recovery.

Economic data from the United Kingdom gave little support to the Pound which was batted around by risk aversion and movements in EUR/USD exchanges. The British Retail Consortium released its retail sales index which indicated sales had bounced back in January after a decline due to poor weather in December.

However, it is thought a rush to beat the VAT increase had contributed to the late push in higher retail spending. RICS house price data showed the pace of price declines eased for a third consecutive month. The data underlined the difficulty faced by the Bank of England in its decision over whether to raise interest rates, similarly a mixed performance in industrial and manufacturing output added to the argument that caution was required to support growth as well as tackling inflation.

The Bank of England rate decision saw the Pound react positively to the announcement and halted the currency’s slide versus the dollar and the euro. The UK central bank kept interest rate on hold at 0.50% and made no changes to its £200bln asset purchase program, as expected.

Expectations are still that the BoE may be forced to raise rates to combat inflation. A view supported by the release of higher than expected PPI inflation figures although late week geo-political tensions rising in Egypt prevented any gains as risk aversion dominated trade.

Clearly the sliding pound against the euro makes a difference for those who are trying  to buy property in Tenerife at present but also for  those who are selling and wish to change the euros back into pounds. The use of a good money exchange company such as Moneycorp will ensure that you get the best exchange rate for whichever currency that you have. The rates from these companies tend to be better than the high street banks. It really does pay to shop around.

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

Euro on the rise

January 25, 2011 – 12:41 pm

Euro on the rise again.

The euro rose to the highest in more than two months against the dollar as the European Financial Stability Facility prepared to sell its first bonds, bolstering confidence in the region’s response to the sovereign crisis. The dollar weakened against higher-yielding currencies including the New Zealand dollar and the Swedish krona before a report that is forecast to show that U.S. home prices fell by the most in a year as before Federal Reserve policy makers begin a two-day meeting. The pound weakened against the euro for the sixth-straight day before data predicted to show the economy slowed in the fourth quarter. Australia’s currency slid as inflation slowed. “All indications are that demand will be very, very strong,” at the EFSF auction, said Beat Siegenthaler, a currency strategist at UBS AG in Zurich, who said the auction could be four-times oversubscribed. “It will be a supportive factor” for the euro, he said. The euro was little changed at $1.3641 at 8:44 a.m. in London after reaching $1.3687, the most since Nov. 22. It traded at 112.45 yen from 112.54 yesterday in New York, when it rose to 112.91, the highest since Nov. 23. The dollar weakened 0.1 percent to 82.44 yen.

The strengthening of the Euro is good news for those who are paid in Euros and send money back to the UK  from places such as Tenerife and Spain.

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

Tourists returning to Tenerife

June 28, 2010 – 6:24 pm
Tourists return to Tenerife as the pound increases in value against the Euro

Tourists return to Tenerife as the pound increases in value against the Euro

British tourists are being wooed back to the Continent with more for their money. As sterling rose this week against the euro to its highest level since December 2008, giving British travellers up to 10 per cent more for their money than last summer.

“Holidaymakers can now expect to get more for their pounds travelling to one of the Eurozone countries than anywhere else,” said Sarah Munro, head of travel money at the Post Office.

Given the continuing concern over the future of the euro, the pound could strengthen further, while reports suggest that hotels and restaurants on the Continent are attempting to attract holidaymakers by reducing prices.

“Our research also shows that prices have plummeted in some of the most popular resorts – especially in Spain and Portugal, where restaurants have slashed their prices,” Ms Munro said.

The total average cost of several holiday essentials, including drinks, sun cream and a meal in a local restaurant, has fallen by 42 per cent in the Algarve, for example, and by 40 per cent in Spain, according to the Post Office. Similar research released this week by Thomas Cook also suggested that mainland Spain offers particularly good value for visitors from Britain.

“Exchange rates have a huge impact on where Britons choose to travel,” said Francis Tuke, a spokeswoman for Abta, the travel association. “The weakening of the euro will undoubtedly encourage us to return to the Eurozone.”

She added that hotel prices had fallen in Spain during the past year and that travel companies expected rates to fall in Greece.

Cheapflights.co.uk, the price-comparison website, has reported that searches for flights to Eurozone destinations increased by 6 per cent during May compared with the same month last year.

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

Clock ticking on Expats’ tax refunds

May 21, 2010 – 4:35 pm
Owners in Tenerife need to hurry to reclaim tax

Owners in Tenerife need to hurry to reclaim tax

Expats who paid out too much tax on their Spanish property sale may be entitled to a rebate amounting to thousands of euros.

The potential capital gains windfall for British expats who sold property in Spain before 2007 comes after the scrapping of a discriminatory Spanish tax law.

The  pound   is now  weak against the euro, and the clock ticking on  refunds, all claims must be filed by 21st November this year. With a weakening pound and a steady euro, this welcome tax refund can be maximised by British expats who can make a claim and exchange their money as soon as possible. When yearly interest is taken into consideration on property sold as long ago as 1997,  considerable sums of money can be returned and saved.

It will be great for expats to get their cash back, but even better if they can use the current exchange rate to their advantage and get the most from their unexpected windfall.

Capital gains tax paid by British expats who sold Spanish property before 31st December 2006 was charged at a ‘non-residents’ rate of 35 per cent, compared to just 15 per cent for Spanish residents.

The Spanish government changed the law in 2007, after the EU declared it discriminatory, but an estimated ten thousand British expats had already overpaid. Now they are entitled to a refund.

The claims deadline for those who sold property between 1st Jan 1997 and 31st December 2006 has been set for 21st November 2010, under a one year statute of limitation.

Dimas Cuesta from Lexland, a law firm that has already secured rebates for British expats, added: “The legal process requires expert advice, which is fundamentally important to the chances of a successful claim. British expats looking to be reimbursed should act now, before the claims deadline.” Expats who think they have paid too much tax on their Spanish property sale should  see how much they may be owed as soon as possible.

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

This week’s exchange rate news

March 8, 2010 – 2:21 pm

The Pound has been falling at an alarming rate, following Friday’s weak GDP revision (showing last year’s economic contraction was even bigger than expected) and new worries about Quantitative Easing.

On Thursday, the Bank of England announced no change to interest rates.  In virtually all currencies, sending money overseas is becoming rapidly more expensive due to falling exchange rates. Remember that it is possible to secure your exchange rate up to 2 years ahead to avoid exchange rate risk

Exchange rate fluctuations in Tenerife caused by the falling pound

Exchange rate fluctuations in Tenerife caused by the falling pound

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

Time to return and buy property in Spain and Tenerife?

February 14, 2010 – 12:57 pm
Time to return to the property market in Tenerife as prices start to rise?

Time to return to the property market in Tenerife as prices start to rise?

We may think that we are savvy property investors, but are we really any good at investing abroad?  Many British investors crashed and burned in Spain over the last decade. German investors, on the other hand, largely avoided the trouble and are now purchasing from distressed British vendors. Germans always used to be big buyers in Spain and the Canary Islands, but from around 2003 onwards  many sold to British buyers after several years of surging property prices. Now it looks like they are back.They bought low and sold high, and now they are back to buy low again.  The Germans have been lucky with their timing. One reason they left Spain after 2003 was an economic recession at home that dented their confidence, and made surging Spanish property prices look crazy in comparison to their own declining house prices. But they also deserve some of the credit for their cautious attitude to buying property abroad.  Germans don’t like borrowing money, unlike the British who will happily borrow more than 100%  They are always looking for a good investment but only something they can afford with cash. Rising prices just encouraged the British to borrow more.

The Germans are also shrewd buyers who instinctively go for good beach locations in places like The Balearics and The Canaries, where there is always strong demand from holiday makers. Many British investors, on the other hand, were easily persuaded that new developments in obscure parts of inland Spain, miles from the sea, would make a good investment.  Germans are fussy about quality and like to see what they are getting, so they found the off-plan boom a turn-off. Nonchalant British investors, on the other hand, piled into off-plan investment. By 2007, German buyers were just 10% of British demand, according to figures from the Property Register.

So what is starting to lure the Germans back? Prime property at reasonable prices. Prime property prices  are down by as much as 25% in the last few years. You can now buy apartments in good locations with sea views for around 350,000 to 400,000 Euros, down from 550,000, and villas are down to 1.5 million from above 2 million Euros. The crisis has created a window of opportunity that the Germans are exploiting. They are after the best properties, in the best locations, with the best views, for the best price. If the price isn’t right, they won’t buy.

Though there is little evidence that Germans are buying outside of their usual haunts, you could argue that this is the best time in years to buy property in other popular destinations around Spain and Tenerife. For a start there is a glut of brand new, key in hand properties languishing on the market, so investors are spoilt for choice.

In Tenerife, prime property with sea views is selling quickly if the price is right, showing that the market is far from dead. There are lot of enquiries for villas between 1 and 1.5 million euros, and anything really good in that range – private, with sea views – gets snapped up.

Of course prices may continue falling, but it would be foolish to expect prime properties to be given away.British people making offers 50% below asking prices are going home empty handed. Sellers are still open to offers, and it’s far easier to negotiate with them just before prices start rising than just after.

The big problem for British buyers right now is the weak Pound. There are ways to mitigate this, such as forex option contracts or taking out a mortgage (if you can), but there is no escaping the fact that British buyers with Pounds do not benefit from lower prices as much as German and other buyers with Euros.

The British may have dominated the mass market during the boom, but today there are plenty of other Europeans interested in prime property now that prices are coming down. So Spain may be in the middle of a massive real estate crash, but it could be a mistake to think that prices for the desirable properties in good locations will go down much further. Warren Buffett famously said that he tries to be greedy when others are fearful and fearful when others are greedy. Right now British property investors are fearful, but German buyers are showing signs of an appetite. If we have anything to learn from the Germans it is that the time to buy property is during the bust, not the boom. Maybe it is time to take the plunge and return to the buying pool?

By Angela | Posted in Economy, General, Health, Holiday, Inspirational, Miscellaneous Articles, Property, Tenerife, Things to Do, Uncategorized, Weather | Tagged , , , , , , , , , , , , , | Comments (1)