Euro value falls after Greek government lose support for a further financial rescue package

June 17, 2011 – 1:20 pm

Euro falls against currencies making Spain and Tenerife cheaper for most people to visit at present.

The euro dropped the most in almost six weeks against the dollar after the Greek prime minister’s government lost political support as the European Union struggled to break a deadlock on a second financial rescue for the nation.

Europe’s shared currency fell versus most of its major counterparts, except for Sweden’s krona, Norway’s krone and Denmark’s krone, which dropped as commodity prices slumped. Demand for assets linked to economic growth also eased after reports showed slowing manufacturing in the U.S. Sterling fell versus the dollar after a report showed Britain’s jobless claims rose in May more than economists forecast.

“There is a lot of noise going on in Europe and in Greece,” said Sara Yates, a foreign-exchange strategist at Barclays Plc in London. “What we’ve seen from the opposition party, that they don’t seem to be on the same page wanting to push through fiscal austerity and more privatization, that is worrying.”

The euro fell 1.8 percent to $1.4181 at 5 p.m. in New York, from $1.4440 yesterday, after touching $1.4156, the lowest level since May 27. It weakened as much as 2 percent against the dollar, the biggest intraday drop since May 5, when it fell as much as 2.1 percent.

Source: BusinessWeek.com

By Angela | Posted in Economy, General, Inspirational, Miscellaneous Articles, Property, Tenerife | 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)

Good news for Spanish government

February 11, 2011 – 9:50 am

Good news at last for Spain,Tenerife and the Canary Islands

Good news has been few and far between for the Spanish government of late, but it seems now for the tourist industry the sun has finally broken out of the clouds. The latest figures from the federal ministry of tourism show a modest increase in the number of foreign visitors to the country last year, with 52.6 million international arrivals in 2010 as compared to 52.5 million in 2009. 

Tourist numbers have declined steadily in the country since the financial crisis hit, with a 2.3 per cent decrease in the number of foreign visitors in 2008 and  8.7 per cent in 2009. Spain has faced ongoing problems since the GFC with a national debt crisis and a severe decline in housing prices, so it’s extremely positive to see the tourist industry getting back on its feet.

Whilst the figures appear modest next to the overall 5% increase to Western European tourism, the ministry noted that in the face of a number of external factors – disruptions to travel from volcanic ash and domestic air traffic control strikes, and inclement weather in the UK and US in December – local tourism was still doing well. 

“The tourism sector has shown its strength in the context of the crisis that we have experienced,” a statement said. “The forecasts for 2010 showed a fall in tourism, but the sector has beaten the predictions of just six months ago and ended the year with positive figures, and tourist arrivals recorded the first increase since 2007.”

In addition the more visitors to Spain, Tenerife and the Canary Islands, the more people realise the advantages of owning property in these areas and look to purchase.

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

British Expats favour British banks

November 25, 2010 – 2:12 pm

British expats favour British banks

British expats believe that British banks are best and many prefer to keep their savings in Sterling, a survey has found.

Their confidence in the British financial system is maintained even after living abroad for many years with 55% of those who have been overseas for over five years still having a UK current account and 80% still holding money in Sterling, the survey from Lloyds TSB International shows.

The survey of British expats, living in France, Hong Kong, Spain, South Africa, the United Arab Emirates and the US, also shows that confidence in sterling is high in comparison with other currencies, with four times (44% versus 11%) as many respondents believing that sterling is stronger than the euro for their savings. Only 3% of those now living abroad cite weakness in sterling as a factor most likely to contribute to having to return home early.

‘It is reassuring to see that so many British expats are confident in the future of sterling which, after depreciating over the past few years, has stabilised as the economic recovery has taken hold and measures to improve the public finances have been laid out. In part their behaviour has been a reflection on what has occurred in the wider financial markets with the flight from more indebted economies,’ said Jakob Pfaudler, managing director of Lloyds TSB International.

Gordon Maddock, who has lived in Almeria, Spain since 1995, agrees with the findings of the survey. He decided to move abroad on his retirement and take the opportunity to establish himself as an author, artist and composer. He has since published three books and exhibited art in Germany, Spain, America and the UK.

He holds his savings in sterling and has confidence in its increase over the next six months, whilst believing that sterling remains a strong currency in the Western economy. Maddock also has a current account with BBVA in Spain and has found that bank charges are higher in Spain for all accounts and he would only consider moving his money when conditions demand, rather than for better investment.

For Maddock sterling is also convenient as he has a government pension and has to declare taxation matters in the UK.

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

British expats who live and work abroad are less likely to return to the UK

September 12, 2010 – 11:56 am

British expats enjoy Tenerife property when at work or play

British born expats who have worked and retired abroad are less likely to return to the UK with 71% believing that they made the right decision in retiring abroad, new research shows.

The experiences of over half or 58% of expat retirees have been better than expected and the vast majority, some 92% of them do not live in an established expat community, the third annual Nat West International Personal Banking Quality of Life report also shows. Despite a belief that a significant number of British retired expats are regretting their decision to retire abroad and are planning to return to the UK, retiring abroad is very much still a popular decision, says the report that was carried out in conjunction with the Centre for Future Studies. It incorporates expats’ real life perceptions and experiences and gauges their personal assessment, including satisfaction or dissatisfaction, with their circumstances abroad.

The study also shows that a quarter of all retired expats rate their quality of life as excellent and the majority, 67%, are happier now than they would have been in the UK. It also reveals that there are two types of British expats: those who have spent their working lives in the UK and have chosen to retire abroad, the so-called silver expats; and those who left the UK to work abroad and subsequently retired in the country in which they had been living. The latter are often referred to as ‘lifer expats’. Those expats who worked abroad before they retired seem happier with their decision to continue living abroad yet those who have had no work experience in their chosen retirement country are having doubts about their decision to remain abroad.

Overall, silver expats retire in Western Europe, principally in Spain, the Canary Islands, France and Portugal. The lifer expats are spread throughout the world, principally in Australia, New Zealand, Canada, South Africa and the US.

When it came to choosing locations, surprisingly, 92% do not live in an  established expat community. Of those that do, the majority, 56%, did not consider this to be a determining factor in their decision to locate where they did. This is interesting, particularly when taking into account that silver expats have had no experience of living in the country and are happy to throw themselves into the deep end of foreign life, the report says.  Perhaps that is why so many opt for the prime property available in Tenerife.

By Angela | Posted in Economy, Property, Tenerife | Tagged , , , , , , , , , , , | Comments (0)

Banks keeping property prices high in Spain

August 10, 2010 – 2:05 pm

banks keeping property prices high in Tenerife,the Canary Isles and SpainWhy have property prices fallen less in Spain than other countries that had property bubbles like the US and the UK?

One reason is because the official housing price data in Spain is flawed, but  it doesn’t explain why asking prices haven’t come down by more. A recent article in the Spanish daily El Mundo gave another reason why prices haven’t corrected as much as one would have expected: price manipulation by the  banks.

“With the majority of the big developers drowning in debt, the banks are now the ones who determine the rhythm of prices,” explains the article.

How are banks keeping price high? Firstly, by improving financing terms rather than reducing prices. “The main answer is that the banks are selling their own stock by improving their financing terms rather than dropping prices, “explains the economist José Luis Campos Echevarría. “This strategy will cost them in the medium term, but it lets them solve the big problem they have in the short term, which is to off-load properties without prices falling too much.”

And secondly, by drip-feeding their stock, rather than flooding the market. Spain may have a monumental housing glut, but banks are keeping a big chunk of it off the market. Banks are also back to the bad old practise of offering 100% financing to buyers of their stock, allowing them to attract people without any capital. “They are making the same mistakes as they did in the boom,” one expert told El Mundo.

What the article doesn’t ask is how long can this go on? As I see it, as long as the European Central Bank (ECB) continues to supply them with unlimited funds, (and the Bank of Spain stays lenient with rules on provisions). Were the ECB to turn off the money tap, banks would be forced to get money from other sources, like dumping their property portfolios at any price.

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

Tenerife, Canaries and mainland Spain appealing to Russians

August 4, 2010 – 1:42 pm

Spain, Tenerife and the Canary Isles, have  not lost their appeal with affluent Russian buyers, finds a new study. Along with Bulgaria, Turkey, The US and Israel, SpainRussian's finding property in Tenerife, the Canary Islands and Spain to their liking. is one of the most popular overseas destinations amongst affluent Russian house-hunters, according to a study by real estate agents  and mortgage brokers Lowel.

Russians buying in Spain spend between 50,000 and 150,000 Euros on flats, and 300,000 plus Euros on Villas. At the very top end, Russians in Spain have some of the biggest budgets of all, often in the multi-million Euro bracket.

Nevertheless, Russian demand is feeling the pinch of the economic crisis this year. Russians are expected to spend 9.3 billion Euros – 10% less than last year  on property abroad.

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