Euribor rate falls

January 7, 2011 – 10:04 am

Spain's Euribor rate falls

Euribor (12 months), the interest rate mainly used to calculate mortgage repayments in Spain, fell to 1.507pc in December, from 1.541pc in November (-2.2pc). On an annualised basis, Euribor  changed by 21pc compared to the end of last year. That means higher monthly repayments for borrowers with mortgages resetting now.

As a result of the latest increase, repayments for a typical mortgage (150,000 Euros, 25 years, Euribor +0.5) will go up by 20 Euros /month, or 240 Euros / year.

The big news of the month was October’s collapse in new mortgage lending, which fell by an annualised 24pc (to 39,542), and by 25pc compared to September, according to figures from the INE

This is the sixth month in a row that new mortgage lending has fallen, a clear sign of trouble for the market. New mortgage lending has been falling since July, and the latest fall comes on top of a slump of 16pc in September.

The average residential loan value in October was 111,368 Euros, down 2.7pc over 12 months and down a startling 6.8pc compared to September. Significantly fewer, smaller loans means a lot less money chasing property, putting further pressure on prices.

Total new residential mortgage lending in October was 4.403 billion Euros, down 26.4pc in a year. The average new mortgage interest rate was 3.74pc, down 10.7% in a year but up 0.3% in a month.

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

Canaries property prices fair better

November 26, 2010 – 12:31 pm

Canarian property fairs better than that on the Spanish mainland

Residential property prices in Spain have fallen between 3.7% and 5% over the 12 months to the end of September with the popular coastal regions taking the worst hit.

The latest figures from the Ministry of Housing show prices down 3.7% while the Tinsa index is down 5% year on year.

The average price of property is €1,832 per square meter, down from €1,903 per square meter a year ago, according to the figures from the Ministry of Housing.

The Tinsa index fell 5% in September, compared to declines of 4.6% in August, and 4% in July. Up until then prices had been trending towards smaller declines, suggesting they might even make it into positive territory on an annualised basis before the end of the year

Prices on the coast, where most holiday homes are located, saw the steepest declines, down 8.7% in September compared with a fall of 4.9% in August. The Balearics and Canaries fared slightly better, down 4.2% compared with a drop of 5.3% in August.

It means that prices on the coast are now down 25.7% at €1,924 per square meter compared to their December 2007 peak of €2,590 per square meter.

Prices falls have accelerated in each of the last three months but these latest figures are a set back to recovery. A lot will depend on what happens in the last three months of the year, according to Mark Stucklin  ‘The big question is why are price declines accelerating again, especially when the latest property sales figures show a strong rebound in transactions?’ he said.

‘We have to keep in mind that it might be just a temporary anomaly lasting a few months after which prices return to an improving trend. You can never be sure with just three months of data. But more likely it shows that average Spanish property prices have still not fallen enough, and vendors are having to give more ground to find buyers,’ he added.

The poor price figures come as the number of repossessions in Spain are on the rise. The credit crunch and rising unemployment have driven home repossessions to a record level.

There were 27,561 repossessions procedures in the first quarter of this year alone, an all time record for Spain, following on from an increase of 126% in 2008 and 59% in 2009. Spanish banks now have €20.5 billion of repossessed property on their books

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

Residential property price changes in the Canary Isles and Spain.

March 27, 2010 – 5:38 pm

Prices in Spain, Tenerife, the Canary Isles and the Balearic Islands. Having improved for four consecutive months since September last year, prices on the coast decreased by 8.2% over the 12 months to the end of February, and by 8.9% in the Canaries and the Balearics. So since the peak of the market in December 2007 prices are down 15.7% nationally, 22% on the Mediterranean coast, and 16.8% in the Canaries and the Balearics, based on Tinsa figures.
 
But the latest figures from the National Institute of Statistics, which are based on actual sales figures supplied by lawyers, show that property prices fell by an average of 4.3% last year and by just 10% since the peak, seemingly backing up the trends identified by Tinsa. They also show that resale property prices fell 3.5% last year and actually rose by 0.1% on a quarterly basis in the last three months of the year.
 
The Spanish government claims there are signs of recovery. The latest figures from the Ministry of Housing shows there was a small rise in property sales in the fourth quarter of 2009. ‘The transactions in the fourth quarter represent a rise of 4.1% with respect to the same period last year, this being the first year-on-year rise since the fourth quarter of 2006,’ it said in a statement.
 
But like the Tinsa figures, when the data is put into a wider context the picture is not quite as rosy. The government figures show that there were 413,112 transactions last year, a fall of 19% compared to the previous year, and 46% down on 2007. Even the fourth quarter sales were down 33% compared to the same period two years ago.

Property price changes in Tenerife,Spain and the Canary Isles.

Property price changes in Tenerife,Spain and the Canary Isles.

Residential property fell nationally by 5.5% over the 12 months to the end of February, according to the latest real estate price index.There is a degree of stabilisation, with the index remaining the same as the previous month, said appraisal company Tinsa. But the headline figures hid the fact that in some markets prices are still falling considerably.
 
A closer examination of the Tinsa figures, which are based on valuations not sales, shows a different story for real estate on the Mediterranean coast,

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

Latest interest rates and mortgage news from Spain and the Islands

January 2, 2010 – 12:21 pm
The latest news from Spain and Tenerife's Euribor and mortgage situation

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

Euribor (12 months), the interest rate normally used to calculate mortgage payments in Spain, fell 1 % in November to a new record low of 1.231%. – Euribor has now fallen for 14 consecutive months, and is 72% lower than it was a year ago. – As a consequence of the latest reduction in Euribor, repayments on a typical annually-resetting mortgage (140,000 Euros, 25 years, Euribor +0.5%) will fall by around 240 Euros a month, or 2,800 Euros a year.  Economic analysts expect Euribor to stay around current low levels in the months to come. Both Jean Claude Trichet, President of the ECB and Miguel Ángel Fernández Ordóñez, Governor of the Bank of Spain, have said that current base rates are at the “appropriate level”.

The volume of new residential mortgages signed in September was 62,411, down 4.2% compared to the same month last year. In value terms new residential mortgages were down 16% to 7.3 billion Euros.  The good news is the decline in new mortgage lending has been bottoming out in the last few months. It fell 31% in June, 19% in July, 7% in August, and 4.% in September. If the trend continues new mortgage lending will soon be growing again year-on-year in volume terms. That will give some support to the housing market and if you have a good relationship with your estate agent, they will be able to point you in the right direction, particularly in Tenerife for the best deals available.

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)

New builds fall in Spain.

August 26, 2009 – 6:22 pm
New builds fall in Spain

New builds fall in Spain

The volume of new residential properties in Spain constructed is expected to fall by as much as 25 per cent by the end of 2009, according to a report by the Fundación Laboral de la Construcción.

Residential building activity levels have fallen over the past year or so, culminating in the loss of hundreds of thousands of jobs, due to the global financial crisis, an oversupply of Spanish properties, and a fall in demand for Spain property. Experts project that the new build figures in Spain will remain low until the end of next year.

The construction labour foundation basis its projection on the amount of cement used by Spain property developers, which dropped by 24per cent last year, the largest fall in a decade, while demand for cement has fallen even further so far this year.

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