Banking reforms set to hit Spanish property prices

March 20, 2012 – 10:11 am

Banking reforms in Tenerife and Spain affect property prices

New banking reforms are expected to hit Spanish property prices hard, causing values to plummet across many parts of the country, particularly in popular holiday destinations, presenting further bargains for house hunters looking to buy a home in Spain.

According to Spanish Property Insight, referring to a recent article in the Spanish financial daily Cinco Días, the Spanish government has introduced reforms to reduce home prices and get banks lending again. But some experts believe that this will cause the price of holiday homes on the coast to plummet due to the chronic oversupply of unsold homes on the market.

Josep Oliver, economics professor at the Autonomous University of Barcelona, believes that property prices in the country’s main cities are now at or near the bottom of the downturn, but the same can not be said for holiday homes along the coast.

“There is not much room left for price declines,” he told the press. “Discounts of up to 50% are only being considered for holiday homes or unfinished new-developments.Whilst the stock grows in holiday home areas, demand is focused on big cities and provincial capitals where there is little excess and prices have already adjusted.”

According to CatalunyaCaixa, a savings bank, about 65% Spain’s housing glut of 800,000 new homes was built on the coast with holiday home buyers in mind, especially in Catalonia, the Balearics, the Valencian Region, Murcia and Andalucia.

The province with the biggest problem by far is Castellón, in the North of the Valencian Region, and home to the so-called Orange-blossom coast (Costa del Azahar), with around 114,000 empty new homes, compared to 57,000 in Barcelona and Alicante (Costa Blanca), 52,000 in Murcia, and 40,000 in Valencia province.

“That means Castellón, a relatively unheard of destination with a new airport that nobody yet flies to, is responsible for around 20% of the entire Spanish glut of new holiday-homes. New developments in Castellón like Marina D’or development help explain why, said Mark Stucklin of Spanish Property Insight.

He added: “The excess inventory of new homes in Malaga province, home to the Costa del Sol, is relatively minor in comparison. According to local builders there are less than 20,000 new homes on the market, most of which will have sold in the next couple of years. The Costa del Sol is a mature market with good access and diversified international demand where almost everything sells in due course.

“The Costa del Azhar is a different story. Who will buy 114,000 new holiday-homes there in any reasonable time-frame? What if prices get really cheap there? Will that help, or is there no demand at any price?”

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

Spanish house prices return to 2004 levels

March 15, 2012 – 11:32 am

Tenerife and Spanish house prices hit 2004 levels

The General IMIE Index, an indicator created by Tinsa to analyse the evolution of house prices in the Spanish market, increased its year-on-year decline in February, falling by 9.5% to 1664 points, returning to the levels of 2004.

The cumulative decline from the top of the market in December 2007 increased to exactly 27.1%. The deterioration of the macroeconomic environment with significant job losses, together with an increase in the spread on mortgage rates, are offsetting the positive effect of reinstated tax breaks on house purchases.

With regards to the performance of the different market segments, “Capitals and Major Cities” once again recorded the severest decline in February of 11.5%, followed by “Metropolitan Areas” with a fall of 10.3%, compared with the same month the year before. In both cases the decline was greater than the market average.

With a similar level to the General Index, the municipalities of the “Mediterranean Coast” segment declined by 9.5% year-on-year.

Source: Kyero.com

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

House prices have fallen 35% since peak

March 8, 2012 – 12:08 pm

Property prices fall by 35% since peaking Spain and Tenerife

Luis de Guindos, the Economy Minister, says house prices have fallen 35pc since the peak, much more than official figures suggest.

According to an article in the Spanish daily El Pais, de Guindos says it is his “impression that finished housing sells at a discount of 35pc compared to prices before the crisis.”

That’s not enough for De Guindos, who has introduced financial-sector reforms forcing banks to make bigger write-downs on their properties, with the stated objective of bringing down house prices.

De Guindos has criticised banks for only lending to buyers of their own properties to “maintain the fiction of the value of their properties,” something he hopes his reforms will discourage.

The reforms introduced by De Guindos had an immediate impact on vendor expectations, with a 30pc increase in asking price reductions (by an average of 9.5pc, or €26,200) in the week after De Guindos announced his banking reforms, according to figures from Idealista  a property portal

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

Cheaper homes in Spain as sellers try to attract more buyers

February 17, 2012 – 2:33 pm

Cheaper rental and sale property prices in Tenerife and Spain

Resale Spanish property asking prices continued to fall last month, as more vendors slashed prices in a bid to secure a sale. The latest home price index published by idealista.com shows that the average price of a home in Spain depreciated by 9.4% compared to January 2011.

The figures provided by the Spanish property portal reveal that January 2012 was the worst month since the Spanish housing crisis started four years ago. On a month on month basis, asking prices of homes in the idealista.com database depreciated by 1.9% to an average price of €2,045sqm (£1,712sqm) suggesting that homeowners are becoming more realistic about the need to reduce property prices if they are going to have any chance of attracting more home buyers.

It represents the biggest fall in asking prices since idealista.com started publishing the index before the property crash got underway in 2008.

On a monthly basis, prices fell the most in Castille La Mancha (-2.3%), followed by The Balearics, Asturias and Andalucia (-2.1%).  With property prices falling, housing affordability has somewhat improved in Spain, based on average property prices versus average gross annual household income, which has fallen from 7.7 years at the peak of the property boom to a current rate of 6.2 years, according to the Bank of Spain.

Spanish families might welcome more affordable housing,  but housing is still much more expensive than it was before the boom, when it cost just 4 years gross annual income or less.

“There are several reasons why the affordability ratio has not improved more with falling property prices, including higher mortgage borrowing costs and lower household income, said Spanish property commentator Mark Stucklin.

He continued: “None of this really applies to the cost of holiday-homes on the coast, where prices have fallen substantially more than the national average, and where foreigners with higher incomes than the Spanish national average tend to buy.”


The average cost of renting a home in Spain also fell last year as rental prices depreciated in 77% of Spain’s primary rental markets, the latest to data from Idealista.com and the Public Rental Company show.

The greatest rental price decline was recorded in Toledo by 8.7%, followed by a 6.8% drop in Oviedo. In Spain’s largest cities of Barcelona, Madrid and Valencia rents fell by 3.1%, 1.3% and 4% respectively.
However, rents actually increased in Lleida, Bilbao and Alicante rentals, rising 11.2%, 4.2% and 4.1% respectively.

These rental price declines follow on from falls in 2010, suggesting that Spanish homes are becoming cheaper to rent, as well as buy.

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

Crucial year for Spanish real estate

February 9, 2012 – 4:37 pm

Crucial year for property in Tenerife and Spain

Property prices in the prime locations of Barcelona remained resilient throughout 2011 but it remains possible to purchase properties at discounts of up to 30% on 2007 prices, according to market analysis for Q3 and Q4 2011 by estate agents Lucas Fox. Having analysed the property markets in Barcelona, Mallorca, Ibiza and Costa Brava property markets, the company predicts that foreign property investment will rise in 2012. Alex Vaughan, Director at Lucas Fox International, says that his firm is still receiving strong interest from buyers looking to buy homes in some parts of the country, many of whom are keen to take advantage of the discounted prices that are possible. But the picture is less positive in other regions of Spain, with agents in some parts of the country such as Murcia and Alicante reporting on large amounts of property stock on the market and a very low volume of transactions. “In these worse affected areas 2012 looks set to be another crucial year for sellers and agents alike,” said Vaughan. “There are, however some positive signs in the market as a whole. Last year the Spanish government lowered the purchase tax payable on new build property which stimulated transactions in the last quarter and the new PP Government have announced that this measure will be continued through 2012.” 

The signs for 2012 are positive with a much larger amount of enquiries from international buyers  than we normally experience at this time of year.” Many prospective buyers who have been observing the Spanish property market for the last few years have now decided that it is the right time to show their hand and start negotiating on their ideal property, according to Stijn Teeuwen, director of Lucas Fox International Properties. He said: “For those clients that get it right there are possibilities to buy prime properties in the best locations at major discounts on the prices that there were being sold at prior to 2007 / 2008.” Tom Maidment, director at Lucas Fox Costa Brava, added: “There are still plenty of opportunities to purchase well-located, quality properties at interesting prices

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

Spanish prices fallen from peak

February 7, 2012 – 10:26 am

Spanish house prices have fallen 18% from the peak, according to the Government’s House Price Index. Is that enough? not according to Isidre Fainé,  head of La Caixa, Spain’s biggest savings bank, who says house prices could fall 50 to 60pc peak to trough.

Fainé  has the biggest branch network in Spain at his command.  La Caixa can probably afford the write-downs such a fall would imply. La Caixa are not alone forecasting more big falls. International rating agency Fitch say prices need to fall by 30 to 35pc peak to

Property prices fall in Spain and Tenerife

trough, or almost double what they have so far, before the market bottoms out.

 The official index is more misleading than it is revealing. In reality average prices are down somewhere between 30 and 50pc, not the 18pc the index would have us believe.  The index is taken at face value by international organisations and publications like The Economist, the OECD, the IMF, the European Commission, not to mention rating agencies like Fitch. Thus they all think Spanish property prices have only fallen 18pc and have much further to fall, when in reality the prices at which homes actually sell have fallen much more than that.

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

Bargain homes in Spain prove popular with international buyers.

January 26, 2012 – 10:05 pm

Bargain hunters in property are investing in Tenerife and Spain

Overseas nationals spent €3.6bn (£2.3bn) on buying homes in Spain in 2011, as they took advantage of significantly discounted properties, according to data supplied by the Bank of Spain. The figures show that foreign property investment in Spain increased by 27% last year compared to the preceding year.

With Spain’s economy in turmoil and the housing market in disarray, owed largely to a major oversupply of homes, property prices have been in freefall, attracting more bargain hunters in the process. The hike in property sales in 2011 marks a second consecutive year of growth in international investment with 2011 beating the total value of transactions in 2010.

Many property professionals believe that the rise in foreign investment activity is a sign that property market conditions are improving. Spanish journalist Daniel Talavera  believes that the Spanish property market is now touching rock bottom of the downturn.

“2011 has probably been the worst year in terms of property prices and sales drop. If the price fall in 2010 was by 3% compared to 2009, the mentioned fall of 6.85% in 2011 compared to 2010 confirms that the market is reaching its lowest at the right speed.”

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

Spanish banks prepared to lend over 100% on repossessed properties

January 12, 2012 – 10:51 am

Spanish Banks are prepared to lend over 100% on their own properties that have been repossessed, it has been revealed. They are also selling them at rock bottom prices to attract buyers so that they can reduce the amount of property on their books.

According to Adam Cornwell, managing director of Feltrim International these are quality properties in desirable areas. Recent reports from a leading risk adviser say banks have around €30 billion worth of property that they can’t sell.

Source:  PropertyWire.com

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

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

By Angela | Posted in Economy, General, Health, Holiday, Inspirational, 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)