Owning a holiday home still ranks as a ‘good investment opportunity’ with general public

Posted on June 27th, 2012 in Real Estate in Spain by author

The editor of A Place in the Sun magazine, Liz Rowlinson, stated recently that many people would still consider buying a holiday home abroad, either in Spain or other prime location in continental Europe, a good investment, especially when seen in comparison to other investment options.

Potential buyers had become very streetwise with regard to the expected returns on their investments and had become more wary of the costs involved in purchasing as well as owning a holiday or investment home.

Liz Rowlinson had to admit that a recent report published by Homeaway.co.uk had revealed some 65% of holiday homeowners were contemplating selling their overseas homes, but she asserted that second homeowners often considered putting their overseas assets on the market, when the economic climate got tough and explained that this was a symptom of the financial woes affecting the Eurozone at present.

SOURCE: www.propertyshowrooms.com

Property market in Spain continues to perform poorly

Posted on June 27th, 2012 in Real Estate in Spain by author

Official figures released by Fomento, the Spanish government source, reveal that property values across the country fell by 37.5% last year compared to 2010. Excluding social housing, the country recorded a total of 307,931 house sales in 2011, representing an overall value of €50.5 billion.

The Property Register quotes slightly different figures but still shows the same depressing picture. According to the Property Register – 370,204 home sales including social housing took place in 2011. That means the Spanish housing market is now at its most contracted since the Property Register began releasing figures in 2005. In the final quarter of 2011 sales transactions declined by 11%.

The Property Register also revealed that only four regions control the property market: Andalucía, Catalonia, Madrid and the Valencia community have cornered nearly two thirds of the entire sector. Anyone researching figures on the Spanish property market should remember that global figures are not really representative of the actual picture in the country.

According the latest Asking Price Index published by Idealista.com, a leading property portal, asking prices for second hand homes and resales declined by an annual 3.4% during the first 3 months of 2012.

Fernando Encinar, head of research at Idealista.com, explained that the difficult lending situation and latest legislation introduced by the government to put pressure on banks and the property sector to continue with the strategy of making housing more affordable, has resulted in property prices sliding further downwards, a trend that is set to continue until the end of 2012.

“Today you can find homes at prices that seemed unthinkable, especially from the estate agents that are getting the best discounts in the market,” Mr Encinar added. Existing homeowners may be suffering thanks to lower asking prices, but newcomers into the market are happy about the greater affordability of homes.

Fomento’s figures also reveals that new planning approvals declined by 31% per annum in January with just 4,698 approvals being granted. Could this trend spell the end of the construction industry in the country? Once house builders were the driving force behind the Spanish economy, now they are at their wits’ end of how to stay afloat.

Meanwhile, BBVA, one of the country’s largest banks, has predicted the Spanish housing market will continue to contract with house values declining until at least 2013. Sales transactions are also predicted to decline by an additional 20% and house prices are to drop by another 15%, before the market has finally adjusted to rock bottom.

SOURCE: www.spanishpropertyinsight.com

Murcia’s new Paramount theme park project is well on the way to becoming reality

Posted on June 27th, 2012 in Real Estate in Spain by author

Finally, the deal securing the construction of the Paramount Studio theme park in the Spanish region of Murcia has been signed off by promoters Proyectos Emblemáticos Murcianos (PREMURSA). They will pay two thirds of the purchase cost for the land needed to construct the theme park. An estimated €10.3 million will change hands for the land deal.

Having the signatures on the paperwork marks an important stepping stone in the creation of Paramount’s very first theme park and lifestyle centre based in Europe. Everyone involved in the housing market is hoping for a positive outcome and a transformation of Murcia thanks to the theme park, not least of all local estate agents, who are still reeling from the latest property sales figures recorded in January 2012.

Data published by the Spanish National Statistics Office show that the sales volume dropped by 26.3% in January in a year-on-year comparison. Many experts and homeowners are anxious at such news, fearing the crisis affecting the residential real estate sector is worsening. Sales transactions have fallen for 11 consecutive months now with just 33,087 properties changing hands in January (a drop of 26.3% per annum).

There’s always a silver lining though – compared to the number of sales transactions recorded in December 2011 the results for January actually represent a 42.3% boost in sales. A total of 347,305 Spanish properties were sold in 2011, representing a 29.3% drop compared to the previous year. Despite recovering briefly in 2010, sales volumes have continued to fall since the peak of the housing market in 2007.

The MIPIM international property show held in Cannes had property experts musing over a better outlook for this year, since the price cuts for Spanish homes has now been so significant, it is likely investors are going to come back with renewed interest in the Spanish property market.

SOURCE: www.property-abroad.com

Number of sales for Spanish real estate rose in January 2012

Posted on May 2nd, 2012 in Real Estate in Spain by author

Seen year-on-year the volume of Spanish sales transactions may still be down by 18.6% compared to the same period in 2011, but the number of completed sales rose in January in comparison to the previous month.

The latest data from the Spanish National Statistics Institute (INE) confirmed that the number of transactions for real estate rose by 42.3% in January of this year compared to the final month of 2011.

Interestingly, the INE’s report stated that only 13.8% of all transactions were registered for rural properties, showing that urban properties are what attract buyers these days.

They also seem to be in favour of new versus old, with 54.1% of sales transactions being for new build homes.

In the holiday lettings segment of the market Spain is also showing some improvement, said INE’s report. The number of holidaymakers opting for the self-catering property type rose by 4.7% in January this year, compared to the same period last year.

Buyers looking for an investment opportunity should take advantage of the low Spanish property prices now, especially with rising number of tourists expected to visit Spain this year.

SOURCE: www.propertyshowrooms.com

Murcia increasingly of interest to property buyers

Posted on May 2nd, 2012 in Real Estate in Spain by author

One property market expert said more enquiries about Murcia real estate were being received than for other property markets such as Portugal or the United Kingdom.

Jon Ainge, director of International Property Success, commented how the proposed theme park Paramount Studio were building was beginning to work its magic, especially now since construction on the site is to start in May 2012. “We expect demand for property to increase as a result,” Jon Ainge added. While Murcia is undoubtedly a great location for investment, he cautioned buyers to look for the best locations for their investment, such as 5-star resorts, rather than be swayed by apparent bargains.

The theme park has potential to cover about one million square meter area of land, which the developers have so far purchased and what will be a major tourist attraction in Murcia is scheduled to open its doors to the public early in 2015. The Paramount theme park is to have more than 30 attractions and 2 on-site hotels with a business and leisure complex being planned to be constructed on an adjacent site.

SOURCE: www.propertyshowrooms.com

Overnight stays in Spanish hotels rose by 3.5% at the start of the year

Posted on April 19th, 2012 in Real Estate in Spain by author

January 2012 figures published by the National Statistics Institute show that 12.6 million visitors opted for overnight stays in Spanish hotels during the first month of the year, which represents a 3.5% rise in a year-on-year comparison.

While the overnight stays for residents fell slightly by 0.2%, the number of overnight stays for non-residents rose by a significant 6.1% with the average length of stay going up by 1% at the same time compared to the same month in 2011. The average length of stay recorded now stands at 3.1 nights per person.

Another study, the Hotel Price Index (HPI) showed an increase of 0.3% for January 2012. Turning to the overall profitability of the hotel sector and the average room rate achieved, the HPI study shows that while invoiced overnight stays per night were on average €68.30, the actual profit made per room was €28.90.

Occupancy rates of available rooms stood at 37.4% for January this year, which represents a 3.3% rise on the same period in 2011. At weekends the occupancy rate rose to 40%, which represents a 2.2% rise when compared to the same month a year ago.

Overseas Visitors’ Overnight Stays

A breakdown by country shows that in January 2012 a greater number of German guests stayed overnight than British visitors. The overnight stays for German guests were recorded at 27.3% and for British visitors overnight stays stood at just 21.1%, which means the German market segment rose by 3.7% on the same month a year ago, while the British holidaymakers only represented a 0.8% rise.

Overnight stays from guests coming from Italy (down 5.5%), France (up 10.2%) and Sweden (up 25.7%) were also an indicator of the respective economies in those countries, which influences tourists’ decisions on holiday budgets.

Favourite Holiday Spots

As in previous years the most popular holiday destination for tourists from other countries are Andalusia and the Canary Islands. Overnight stays by foreign guests holidaying in the Canary Islands went up by 7.7% compared to the same month a year ago. In second place is Cataluña with a 1.1% increase and Andalusia is in first place with a 14.7% rise.

With regard to Spanish residents holidaying in their own country, they favoured Andalusia, Cataluña and the Communidad de Madrid for overnight stays. Here the year-on-year comparison shows a downturn for Andalusia (5.4%), but an upturn for Madrid (0.3%) and Cataluña (3.7%).

The Canary Islands, seen on a year-on-year comparison for highest occupancy rates by room, were the winner with 71.3%, with the Communidad de Madrid in second place (41.0%) and Communidad Valenciana in third with 35.3% occupancy rates per room.

Occupancy and overnight stay rates were best for the island locations as well as coastal regions and the resorts located in the Pyrenees. In this category Gran Canaria was the clear winner with an occupancy rate by room recorded at 78.0% and a weekend occupancy rate by room at 78.7%.

Holiday Island Tenerife had a record 2 million overnight stays just for January 2012, while Madrid, San Bartolomé de Tirajana and Adeje recorded the greatest number of overnight stays. Popular tourist destination Arona achieved the highest occupancy rate by room with 83.3%, while Puerto de la Cruz boasted a weekend occupancy rate of 83.8% per room.

Considering a year-on-year comparison of January’s results, the HPI reached 0.3% this January, a 1.6 point increase from December 2011 and a 1.2 point rise from those recorded for the same month in 2010.

SOURCE: http://news.kyero.com

Newly built homes’ values to fall further this year

Posted on April 19th, 2012 in Real Estate in Spain by author

Cincodias.com reported that the Spanish government predicts the asking prices for newly built homes will fall further in 2012, bearing in mind that nearly 65% of all housing surplus is located at the Spanish costas. The lack of available credit and stagnant labour market has made it more difficult to reduce the number of empty new homes on the market.

The most dramatic price adjustment will be reserved for the 800,000 purpose built holiday and second homes, which are mainly located at the Mediterranean coast.

A recently published study conducted by Cataluña Caixa suggests that two thirds of unsold, and seemingly unwanted housing stock were constructed in coastal areas, ore more precisely, some 65% of such homes were built in Andalusia, the Balearic Islands, Catalonia,  Murcia and Valencia.

The latter is the worst affected region with nearly 210,000 unsold homes still on the market at the end of September 2011, which reflects 25.6% of the total unsold housing stock. Seen in combination with 137,000 unsold homes in Murcia and 107,000 unsold properties in Catalonia, this represents a 55.4% share of the overall unsold surplus.

Worrying still, while the overall availability of new housing stock may have reduced down over the past couple of years, in the Basque Country, Catalonia and Valencia more newly built homes have come onto the market.

Seen on a province by province basis, Castellón is showing a volume of almost 114,000 empty homes, whereas Alicante and Barcelona recorded 57,000 unsold newly build homes respectively. Murcia recorded another 52,000 unsold properties and Valencia registered some 40,000 newly build, unsold properties.

SOURCE: http://news.kyero.com

Getting a foothold on the Spanish property ladder with distressed properties

Posted on March 31st, 2012 in Real Estate in Spain by author

Not every investor has access to large funds to start their property portfolio. Distressed properties in Spain present would-be investors with an ideal opportunity to get in on the buy-to-let or holiday-let market.

Jon Ainge, director of International Property Success, pointed out that, while banks have introduced far stricter lending criteria, which have made funding a property problematic for some investors, they are willing to advance mortgages on Spain’s distressed properties. Recently introduced legislation forces Spanish banks to shed the glut of properties on their books in order to reduce their exposure to under-performing assets.

Jon Ainge explained: “If banks currently finance a development they are keen to deleverage themselves of the current risk they hold – this is where you will find that most loans are not being issued in countries such as Spain.”

The recently published Global Distressed Property Monitor by the Royal Institution of Chartered Surveyors revealed that increased demand for distressed properties had occurred in the last three months of 2011, far more than in the previous quarter.

Industry experts forecast roughly the same number of distressed Spanish properties would enter the housing market in the first quarter of 2012 than there had been listed in the previous quarter.

SOURCE: www.propertyshowrooms.com

A Retirement nest egg with Spanish property?

Posted on March 31st, 2012 in Real Estate in Spain by author

With the latest budget having been announced in the UK many people are looking at different options to boost their retirement funds – how about making Spanish property part of the retirement fund?

Jon Ainge, the director of International Property Success, believes that using Spanish property with capital growth and holiday rental income potential to boost retirement portfolios is not a bad idea.

“I believe the returns from overseas property, particularly in locations like the Caribbean, the Algarve and Spanish coast can help fund retirement and should be part of a pension portfolio,” Jon Ainge explained.

The idea of buying real estate in Spain has of late interested far more British people than before. Liz Rowlinson, the editor of A Place in the Sun magazine, observed that falling house prices have made Spanish homes more affordable, while at the same the traditional factors of great amenities, warm sunny climate and beachside holidays are still as appealing as ever.

SOURCE: www.propertyshowrooms.com

Spanish property prices continue the downward spiral

Posted on March 14th, 2012 in Real Estate in Spain by author

January’s house prices saw the worst depreciation since 2008 and, while this news was greeted cheerfully by potential foreign buyers, the Spanish press has expressed fears over a deepening of the crisis.

Spain’s new government, headed by the People’s Party, appreciated the “good” news, as lower prices mean greater affordability. Government officials are currently putting pressure on banks to cut prices for residential properties by launching higher capital requirements and making far greater provisions for bad debts and “undesirable” properties on their books, namely those properties that are unlikely to be sold.

Idealista.com, a Spanish online property expert, commented on January’s sales results as being “the worst month since the Spanish housing crisis started four years ago” and underpinned their statement with statistics that revealed a 9.4% decrease in a year-on-year comparison with 2011.

Traditionally, December and January are the worst months for selling property anyway, which means the average month on month decrease of 1.9% has to be seen in context. The average price per sq. meter is static at €2,000, meaning a typical 2-bedroomed holiday apartment still sells for just €130,000.

This is potentially good news, as low prices at desirable locations such as the costas have already caught the attention of international investors. Large numbers of self-catering tourists coming to Spain for their holidays have the potential to increase yields on rental income and Spain’s revenue from tourism was at a record high in 2011.

It is estimated that at least 36% of all bank-owned housing stock is in seaside locations. Such developments received generous funding during the housing boom years, when developers speculated on rising prices. Now such key-ready housing stock bargains are luring potential buyers from the Benelux countries, the UK, Germany and Scandinavia to Spain once more.

Propertyinspain.net, a specialist in bank-owned housing stock, described the whole debacle best by saying “crisis, what crisis? Price reductions are good news for both international and Spanish buyers.”

Is Spain’s government right after all? Affordability can be measured in two ways: who can afford to buy in Spain at what price? Domestic buyers have far less money to spend on properties located at the costas than international investors, but this has prompted Spanish buyers to look for property bargains in cities and towns, leaving the seaside housing stock largely to foreign buyers.

The Bank of Spain has told off the country’s banking sector, suspecting that prime properties are being held back until better market conditions are starting to surface. Housing stock that nobody else wanted has instead been offered at rock bottom prices to bank employees, their families and friends, even to long standing customers. Despite such tactics, some 600,000 housing units remain unsold to-date, representing a year’s worth of housing stock during 2007 peak times.

Spain’s banks will come under increasing pressure to release quality properties in prime locations at the costas onto the market to achieve more sales. They will also be called upon by the government and the Bank of Spain to come up with better incentives, so that international buyers can take advantage of lower prices and improved finance options.

SOURCE: www.propertyinspain.net

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