Home construction in Spain to recover in 2013?

May 21, 2012 – 8:30 am

Construction in Spain and Tenerife set to improve in 2013

Home construction in Spain will begin to recover in 2013, according to the
Corporate Practise Institute.

The IPE’s Real Estate Pulsometer has predicted that the country’s inventory
of unsold will decline by 23.6 per cent this year, with up to 611,250 homes
being snapped up.

The report also notes an increasing trend for purchasing Spanish property
with cash, predicting that mortgages taken out will amount to just
one-third of the level seen in 2006.

However, while the market’s outlook is promising for the next 24 months,
“the report stresses that current construction activity has been reduced
to 20% of that achieved in 2007″,  Spanish rents rose by 0.7 per cent in April.

Figures from the National Statistics Institute showed that rental rates
increased compared to April 2011, with only two regions recording a
decrease in price: Murcia and La Rioja, where prices fell by 1.2 per cent
and 0.3 per cent respectively.

Rents increased by the highest amount in Catalonia, 1.4 per cent, followed
by Asturias and the Basque Country, where rates jumped by 1.2 per cent.
Rents rose by 1.1 per cent in Castilla y Leon and 1 per cent in Galicia.

Increases of less than 1% occurred in Andalusia (0.8%), Melilla (0.7%),
Ceuta (0.7%), the Canary Islands (0.6%), Extremadura (0.5%), Castilla-La
Mancha (0.5%), Cantabria (0.4%), Aragon (0.4%), the Balearic Islands
(0.4%), and Madrid (0.2%).

Source: Kyero

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Moody’s downgrades 16 Spanish banks

May 18, 2012 – 8:54 am

Banks in Spain and tenerife downgraded by Moody's as a result of Euro crisis

Credit rating agency Moody’s has downgraded 16 Spanish banks including two of Spain’s biggest lenders, the Banco Santander and Banco Bilbao Vizcaya Argentaria (BBVA).

According to a statement from Moody’s, nine banks were cut three notches and seven were kept on review of the agency for further downgrades.  Spain’s borrowing costs shot up at a bond auction on Thursday, after economic data confirmed the country is back in recession and reports of an outflow of deposits from nationalised Bankia hammered its share price.

According to official data, Spain is in recession recording a 0.3 percent contraction in the economy in the first quarter. Moody’s cited bad loans, recession, funding access worries, real estate crisis, high unemployment rate and lower credit worthiness of the government as the reasons for the downgrade. “The Spanish economy has fallen back into recession in first-quarter 2012, and Moody’s does not expect conditions to improve,” the credit rating agency said in a statement. “Banks will continue to face highly adverse operating and market funding conditions that pose a threat to their creditworthiness,” it added.

The agency has also cut the ratings on Santander UK, a subsidiary of Banco Santander, the eurozone’s largest lender. Santander UK maintained that the downgrade would not have any impact on its operations.

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Asking prices for property in Spain fall

May 17, 2012 – 11:11 am

Property prices on the slide in Tenerife and Spain

Asking prices for Spanish homes fell 9.5pc over 12 months to the end of April, according to data from Idealista, a Spanish property portal.

With Spain back in recession, and banks refusing to lend on anything but their own properties, home owners trying to sell have no alternative but to drop their prices. The average resale property in Spain now has an asking prices of 1,993 €/m2, down from 2,202 €/m2 a year ago. On a monthly basis, asking prices fell 1pc in April.

Asking prices fell the most in Castilla La Mancha, Navarra , Murcia, and Extremadura, and the least in Castilla y Leon, La Rioja and Galicia.

You can read the full monthly house (asking) price index report from Idealista  here (pdf in Spanish)

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Brits amongst the most active purchasers in Spain and the islands

May 15, 2012 – 9:27 am

Brits active in property market in Tenerife and Spain

Official figures show that Brits were among the most active purchasers of homes in Costa Blanca last year, along with the Russian and Norwegians, which collectively made up 80% of all transactions in the region.

According to figures obtained from Spain’s notaries, at least 9,200 foreigners bought holiday homes on the Costa Blanca last year, including 5,200 in the Catalonia region Costa Brava/Dorada, and 4,600 in Malaga  Costa del Sol; Balearics (2,700), and Murcia (1,500).

José Vicente Dómine, Director General of Public Works for the Generalitat (Valencian regional government), told the press that more overseas nationals purchased bought homes on the Costa Blanca last year than in Madrid and Andalusia combined, and almost as much as Catalonia, the Balearics, and Murcia combined.

While the Spanish property market continues to suffer from an oversupply of homes, now is a great opportunity “for foreign buyers to bag a bargain on the Spanish coast,” said Spanish property commentator Mark Stucklin.

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Wet weather sends Brits searching for the sun

May 14, 2012 – 8:06 am

Wet weather in the UK sends Brits to Tenerife and Spain

As summer approaches and the temperature rises abroad, demand for traditional holiday destinations is also beginning to hot up. With the wet weather in the UK, Brits have turned to search for overseas property in record numbers with properties in Spain attracting the greatest volume of searches. The latest Rightmove Overseas report shows that properties in Portugal were also high on Briton’s wish list, along with a range of other holiday hot spots, including Australia. But Spanish locations dominate the top 10 climbing regions. Shameem Golamy, head of Rightmove Overseas, said: “The main beneficiary of this increased search activity has again been the traditional Spanish destinations of Benidorm, Estepona, Tenerife and Torrevieja, as people look for properties in familiar locations. Albufeira and Carvoeiro in Portugal have also benefitted from extra searches, as has Sydney in Australia.” The report also reveals that more property investors are eyeing up property investment opportunities in Greece, Malta, Spain and Ireland, where prices have plummeted in recent years.  “The economic woes affecting parts of Europe has failed to deter buyers in the UK interested in overseas property. Germany, usually a favourite destination of UK investors, seems to be gradually losing interest. It seems that UK buyers are more inclined to look for warmer destinations as thoughts turn towards the summer.”

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Spanish banks hopeful of interest in property portfolios

May 4, 2012 – 8:42 am

Economy Minister, Luis de Guindos is hopeful of property sales in Tenerife and Spain

Spanish banks are hopeful that investors will show strong interest in the real estate portfolios they are selling, as long as the prices are right. The Bank of Spain recently announced that Spanish banks held a total of €308 billion in real estate portfolios, with 60 per cent of these classed as “troubled” assets.

The country’s Economy Minister, Luis de Guindos, said last week that new guidelines will be introduced to enable the banks to transfer the real estate into asset management companies, which will then be controlled alongside third-party investors.

“The key element is going to be transparency and valuation,” he told Bloomberg,adding that no financial assistance would be provided. The minister added that he expected Spain’s economy to return to growth in 2013.

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Average prices depreciate in Spain

May 3, 2012 – 2:05 pm

Prices of property fall in Tenerife and Spain

The average price of a home in Spain depreciated by 41.7% between 2006 and 2011, as a consequence of the housing crash, which has been fuelled primarily by a significant housing glut, according to research by Barcelona based Universitat Pompeu Fabra (UPF).

The study, which analysed the sales figures of real estate firm Tecnocasa provided from the end of 2006 to the end of 2011, suggests that Spanish property prices are likely to fall further unless credit conditions improve.

A lack of mortgage liquidity is partly to blame for the collapse in demand for properties in Spain, which has contributed significantly to the huge gap between supply and demand in the country.

The research, led by García Montalvo, reveals that the greatest fall in Spanish property prices occurred between the second half of 2010 and the same period in 2011, when prices fell by 19.7%.

Furthermore, the study shows that while prices have plummeted at the lower end of the property market, price falls have not been so great in some of the most exclusive areas in Spain.

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More misery for the Spanish property market?

May 2, 2012 – 12:54 pm

More property investment misery in Tenerife and Spain?

The Spanish property market faces more misery with average residential prices expected to fall by a further 18% before finally bottoming out, according to Barclays Capital. The British investment bank says that the decline in values will add to the 22% price drop witnessed since the Spanish property market crashed in 2008. The bank’s latest report claims that Spanish home prices will drop by up to 35% before reaching the bottom of the downturn. But the reality is that property price falls nationwide have been far steeper and have already depreciated by 40%, on average. In fact, this rate of fall has been confirmed by Spain’s Minister for the Economy, suggesting that Barclays Capital’s data is largely unreliable. “So Barclays Capital are right to say that prices might fall 40% in total, but wrong to say that means another 18% of declines to come,” says Spanish property commentator Mark Stucklin. “We are already almost there [at the bottom], certainly when it comes to holiday homes on the coast.”

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Average price of a home fell by 11.5% in March compared to last year

April 18, 2012 – 9:43 am

 

Property prices continue to slide in Tenerife and Spain

Vendors have been forced to slash property prices across the country in order to have any chance of realistically attracting a serious buyer, but with the well documented Spanish property crash showing no sign of abating, prices look set to fall further.

Despite claims from some estate agents and developers in Spain that market conditions are improving, it would seem that they are actually getting worse.

The average price of home in Spain fell by 11.5% in March compared to the corresponding month last year, according to Spain’s most widely-watched annualised House Price Index compiled by Tinsa, a leading property valuation firm. The annualised decline in Spanish property is the highest since the housing crash got underway over four years ago.

Spanish home prices have, on average, now dropped by 28.6% since the crisis started in December 2007 and by 35% along the coast, where the greatest glut of homes are located.

Advisory firm R.R. de Acuna & Asociados recently projected that the average price of a home in Spain will fall by 12%-14% this year – the most since the National Statistics Institute started tracking values in 2007.

Fernando Rodriguez de Acuna Martinez, a partner at the advisory company, said: “There will be more serious price drops this year because of the government decree.” What  could happen to prices beyond 2012? With unemployment standing at 23%, which is higher than Greece, and given that Spain is deep in a recession, with greater austerity measures to come, it would appear that prices still have a long way to fall.

Bankinter estimates that housing prices will fall an additional 6% to the end of 2013, but the reality is that the decline is likely to be greater and for longer.

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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.

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