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

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

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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Sales volume for Spanish property transactions rises by 27%

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

The new Spanish government, led by the People’s Party, made a number of decisions on how to kick start the property market that have led to a scramble among foreign investors to snap up property bargains in the New Year.

At the end of 2011 international property investors came back to the land of sunshine and Sangria to boost the annual sales volume to €3.6 billion, representing a 27% increase in a year-on-year comparison. What started as a trickle of potential buyers at the beginning of January soon transformed into a positive flood in parts of Spain, where lenders and cash-strapped developers tried to lure buyers to their doors with hugely discounted properties and excellent finance deals.

Spain’s government cut property purchase tax by half, now standing at just 4%. The devaluing of the Euro against Sterling helped also to reduce asking prices by up to 50% and produced mortgage deals with up to 107% loan-to-value offers. International buyers were quick to spot various surveys listing property super sales.

A considerable number of buyers clearly felt that prices couldn’t go down any further, reserving their chosen properties either by internet or making appointments to view them post haste.

A bank-owned property development based in Costa Almeria saw the bank’s reservation system for viewings virtually collapse under the onslaught of potential buyers wishing to make appointments for their chosen properties. Online property portal Propertyinspain.net had nicknamed the development “best key-ready buy”, which no doubt added to the bargain hunters’ frenzy.

Within the space of a week there were multiple buyers lined up for viewings on waiting lists spanning several days, while the banking staff wrestled with a mountain of mortgage application paperwork and tried to allocate reservations to the correct property and potential buyer.

Their system allowed the bank to skip from one failed applicant to the next one in line on their waiting list, using the bank’s lending criteria as the basis for weeding out the unsuitable applicants.

One plucky South African buyer can hardly believe his luck, after having selected via Google and Skype street view and having patiently waited for several days, he eventually got the third penthouse, he’d chosen for just €62,000. The property is a brand new 2-bedroomed pool and sea view penthouse, includes all appliances and has a choice of no fewer than 4 swimming pools.

The most sought after properties in this super sale were the newly built, key-ready penthouses that have rooftop solariums together with either sea views and/or stunning views over four communal swimming pool areas. The €62,000 price tag is for 2 bedrooms, fully-fitted kitchen with appliances, air conditioning and secure parking. Buyers only need a €6,000 deposit to secure the deal.

The properties were discounted by 50% by the bank who owns the penthouses. The properties come complete with guaranteed 90% mortgage deals.

SOURCE: www.propertyinspain.net

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Real estate market declined further in third quarter

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

According to data published by the Spanish Government (Fomento), sales of Spanish property declined in a year-on-year comparison by 6.3% to just 75,462 sales in the third quarter this year.

While this may seem depressing news at first glance, it is nothing compared to the fall seen in the first 2 quarters of 2011, when a 30.4% fall was seen in the first quarter and an eye-watering 40.8% decline was recorded in the second quarter of the year. Some members of the Spanish press have chosen to put a rosy glow on this latest result, El Pais being one of them.

The sales result of the third quarter was undoubtedly influenced by the government’s announcement of new measures to boost the real estate sector, such as the reduction of VAT on purchases of new properties, down from 8% to 4%. It hardly bears thinking about, what would have happened, if there hadn’t been such incentives!

Although it is important to take the quarterly figures published by the Department of Housing in the Ministry of Public Works into account, the monthly data released by the National Statistics Institute (INE) are far more reliable as a true reflection of the property market situation across the country. Their figures, which exclude social housing, show no improvement of the real estate sector whatsoever for the third quarter.

The Property Register, another valuable source of accurate data, reported a 32% decline in property prices for the third quarter this year.

Bearing in mind that lending to new mortgage applicants has come to a virtual standstill, it is highly unlikely that the Spanish property sector will see any significant improvements in the final quarter of 2011.

While overall the figures suggest that things are still grim across Spain, there is reputedly evidence that shows some areas are more recession proof than others and luxury, high-end properties in some of the most sought after regions have fared far better than the average property has.

SOURCE: www.spanishpropertyinsight.com

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