As the dust settles on the mired property markets of Europe people are beginning to question how and why such a seemingly strong investment proved to be disastrous for many investors and families.
In Spain, the reason for the Sunshine State’s property bubble and its subsequent collapse, are being discussed and the answers provided make a lot of sense and carry warnings about the future behaviour of Governments, banks, developers and property professionals.
The conclusion so far from various debates by academics and industry insiders seems to suggest the Spanish economic miracle was a mirage, because the country was dedicated to building homes that people would not have wanted to buy had they known how little they would be worth in the future.
A house is only valuable as something in which to live. And if no one wants to do so, then it is not worth anything. Spanish, British and other north Europeans have purchased flats under construction or which will be visited only a few days a year, not because buyers were eager to consume housing, but because they thought they were a store of value for the future.
Furthermore, many banks and building societies provided big loans to developers and builders, many of whom cannot repay the loans and if they are allowed to go bust, could lead to bankruptcy for banks and cajas (building societies). Municipalities have enjoyed unsustainable revenues due to land reclassification and the waste to which they have become accustomed is over.
Cars and other consumer items that households bought during the property boom years were mistakes as they could not afford to buy because they were not as rich they thought. This led a complete distortion of the fabric of the Spanish economy.
Finally, as this kind of unsustainable activity has stopped, the economy has entered recession, although there are now a lot of well-priced bargain homes from Spanish banks and anxious, must sell owners.
Why did two successive Spanish governments and the Central Bank of Spain, despite numerous warnings on over-priced housing, not attempt to stop the bubble?
First, because the construction sector is labour intensive, which is important in a country with a high unemployment rate. Secondly, because an increase in the value of housing benefits the average voter, who is the owner of his home. And thirdly, because the real estate sector generates substantial revenue for the public sector at national, regional and municipal levels.
For example, in 2004, it accounted for 60% of the budget (excluding liabilities and current transfers) of Valencia and 50% of Madrid.
Lessons for the future? The best counter measure for house price inflation has got to be accurate price monitoring and production of benchmark prices at every level of the market. The Spanish Ministry of Housing has not been a reliable, accurate source and the replacement source, the National Institute of Statistics not much better.
Recently, the property registries themselves have been publishing the notarised transactions and the figures from TINSA, the big valuations company have been accurate and true reflection of prices gained from the frontline by their 3,000 frontline valuers.
There has to be increased planning credibility to avoid the disasters of the Valencia Land Grab and homes bought in in good faith being threatened with demolition because in retrospect the “planning permissions” granted by dodgy local mayors were more about revenue than community.
And Brit buyers should commit to a property in Spain only if they want a holiday home at a realistic price and to have lots of family fun and cool-out time while seeing an investment return over a number of years.
Now would seem an ideal time to grab a bargain, enjoy the fulltime or holiday lifestyle that comes with it and spend years immersed in the sunshine and culture of Spain...
28 February 2009
24 February 2009
Spain property Brit investment favourite
While the UK property market remains mired by the recession and the lack of confidence in the McBroon government and it’s cohort banks, British buyers are continuing their long love affair with Spain.
For yet another independent survey has revealed Europe’s Sunshine State is still the favourite destination for British buyers looking to invest in overseas property.
Director of the online investment portal, Property Abroad, Les Calvert, believes that the country's strength as a tourism destination means it will remain the ideal location to make a foreign foreign purchase.
His comments come on the back of a survey by the Spanish Property Owners Guild, which revealed that prices could drop 15 per cent over the coming year. Mr Calvert said: "Spain is still the most popular destination with overseas property buyers and that is almost completely undeniable.
"In the current economic climate, most people are buying-to-hold for the economic recovery and I would recommend buying a property in Spain … more so now than I would have a year ago."
Specifically, he identified the island of Tenerife as a Spanish region where prices have continued to increase, despite the global economic climate.
Leading specialists for Spanish bank repossessions and other bargains, PropertyinSpain.Net is reporting prices are increasing in Huelva province, a little known area of Costa de la Luz, where strong demand is encouraging local developers to edge up their asking prices.
Spokesman, Kevin Barnett said: “We see this as an early green shoot of recovery for the Spanish property market which is bottomed out with our best deals offering up to 50% discounts from banks and must sell private vendors.”
For yet another independent survey has revealed Europe’s Sunshine State is still the favourite destination for British buyers looking to invest in overseas property.
Director of the online investment portal, Property Abroad, Les Calvert, believes that the country's strength as a tourism destination means it will remain the ideal location to make a foreign foreign purchase.
His comments come on the back of a survey by the Spanish Property Owners Guild, which revealed that prices could drop 15 per cent over the coming year. Mr Calvert said: "Spain is still the most popular destination with overseas property buyers and that is almost completely undeniable.
"In the current economic climate, most people are buying-to-hold for the economic recovery and I would recommend buying a property in Spain … more so now than I would have a year ago."
Specifically, he identified the island of Tenerife as a Spanish region where prices have continued to increase, despite the global economic climate.
Leading specialists for Spanish bank repossessions and other bargains, PropertyinSpain.Net is reporting prices are increasing in Huelva province, a little known area of Costa de la Luz, where strong demand is encouraging local developers to edge up their asking prices.
Spokesman, Kevin Barnett said: “We see this as an early green shoot of recovery for the Spanish property market which is bottomed out with our best deals offering up to 50% discounts from banks and must sell private vendors.”
20 February 2009
Credibility in Spain, but not in UK
With car sales, mortgage loans and shares plummeting and jobless and house repossessions hitting the roof, it’s hard to see what the McBroon Government has achieved in the last six months that offers hope and salvation to any sane, rational UK citizen …
There are still no loans on offer for hard-pressed businesses and families as McBroon minion ministers fill our screens with platitudes and assurances they are going the extra mile to get cash into the economy – despite the billions they have poured into useless, not fit for purpose, banks.
It seems no-one has confidence in their utterances and, as a direct result, we are all keen to hang onto to every quid we have, despite the good shopping deals in the High Street, malls and showrooms.
McBroon himself has quietly abandoned his hilarious prediction that Britain was so well placed in the global recession that we would be starting recovery from mid 2009 and is now wasting his time trying to provide normal service to the world economy. What would impress more would be for him to get the vital loan cash into the British economy.
Meantime, there are reports that increasing numbers of Brits are voting with their feet and investing in property in Italy, France and mainly in Spain where prices are better than even the current rock bottom UK level and mortgages are available.
They will be encouraged by the most accurate figures on property prices in Spain that have ever been released.
Not the laughable stats from the Spanish Ministry of Housing nor the National Institute of Statistics, who until recently claimed that house prices were still rising, but from Tinsa, the valuation company with 3,000 highly trained valuers on the frontline of Spanish housing every day.
Tinsa accurately track prices to show that at the end of 2007, homes were still rising 5% year on year, but that in 2008 they dropped by 10% as the world economies went into freefall. Tinsa's reports are not focused on the actual price of a particular property - but on the overall trend in house prices. On the Brit-buying Costas prices are down 12.6% compared with 2007 and there are Spanish bank repossessions available.
Whatever their methodology is, it seems to be working well and other experts like myself are now convinced Tinsa price tracking is the most accurate and credible.
There is only one buy-direct, full service website in the Spanish property sector that publishes Tinsa valuations on individual properties against the asking price and in many cases supplies the 25 page valuations as part of the view trip. This vital, independent paperwork is as additional assurance and confidence builder to UK and north European buyers, puzzled by the many “big discount” claims of various vendors.
Realiable statistics, support valuations, published honestly - that’s another big step towards fuller transparency in the week when the EU has attacked Spain for lack of it where foreign buyers are concerned and is threatening financial sanctions if things don’t improve.
There are still no loans on offer for hard-pressed businesses and families as McBroon minion ministers fill our screens with platitudes and assurances they are going the extra mile to get cash into the economy – despite the billions they have poured into useless, not fit for purpose, banks.
It seems no-one has confidence in their utterances and, as a direct result, we are all keen to hang onto to every quid we have, despite the good shopping deals in the High Street, malls and showrooms.
McBroon himself has quietly abandoned his hilarious prediction that Britain was so well placed in the global recession that we would be starting recovery from mid 2009 and is now wasting his time trying to provide normal service to the world economy. What would impress more would be for him to get the vital loan cash into the British economy.
Meantime, there are reports that increasing numbers of Brits are voting with their feet and investing in property in Italy, France and mainly in Spain where prices are better than even the current rock bottom UK level and mortgages are available.
They will be encouraged by the most accurate figures on property prices in Spain that have ever been released.
Not the laughable stats from the Spanish Ministry of Housing nor the National Institute of Statistics, who until recently claimed that house prices were still rising, but from Tinsa, the valuation company with 3,000 highly trained valuers on the frontline of Spanish housing every day.
Tinsa accurately track prices to show that at the end of 2007, homes were still rising 5% year on year, but that in 2008 they dropped by 10% as the world economies went into freefall. Tinsa's reports are not focused on the actual price of a particular property - but on the overall trend in house prices. On the Brit-buying Costas prices are down 12.6% compared with 2007 and there are Spanish bank repossessions available.Whatever their methodology is, it seems to be working well and other experts like myself are now convinced Tinsa price tracking is the most accurate and credible.
There is only one buy-direct, full service website in the Spanish property sector that publishes Tinsa valuations on individual properties against the asking price and in many cases supplies the 25 page valuations as part of the view trip. This vital, independent paperwork is as additional assurance and confidence builder to UK and north European buyers, puzzled by the many “big discount” claims of various vendors.
Realiable statistics, support valuations, published honestly - that’s another big step towards fuller transparency in the week when the EU has attacked Spain for lack of it where foreign buyers are concerned and is threatening financial sanctions if things don’t improve.
14 February 2009
Spain moves could aid crashed Brits
Brits are biting the bullet every day as the media reveal more bungling of the ruling McBroons and their cosy cohorts in the banking business.
Having forced Lloyds Bank into a shotgun marriage with busted HBOS, McBroon preened how single-handedly he’d saved British banking and trotted off to meet the more sensible leaders of other countries to “lead the world out of recession”.
He never paused to get the Bank of England, his beloved and disgraced Financial Services Authority (FSA) nor his army of foolish fiscal mandarins to check the balance sheet of beggarly HBOS. Nor did Lloyds do much checking, in their haste to grab the McBroon billions in bribes if they saved his skin.
Ten billion quid is a lot of money and that’s what Lloyds will have to write off having found toxic assets in HBOS. It was comeuppance week for the British bankers when they trotted along to Westminster to say sorry for fouling up the world economy and wrecking the lives of millions.
They said it wasn’t their fault though…implying that that the FSA, operating the light touch” governance of McBroon for a decade or so, had not rapped their knuckles or threatened to downgrade the chateau wine at their next cosy luncheon..
So where to now for cash-strapped Brits, whose property assets and pensions are worth a third less than they thought and the markets that govern the prices are in total disarray and unlikely to show any growth for years to come, according to some pundits.
Think Spain, where the banks were banned from getting involved with American trailer trash mortgages, are still reporting good profits and have plenty of cash waiting for mortgage applicants. They also have the best interest rates for savers with one deal from La Caixa at 6% on 12 month call, being over-subscribed by a long way.
The Spanish banks also have a growing supply of repossession homes at up to 50% below current valuation and they can be purchased from specialist broker http://www.propertyinspain.net/ often with low cost subrogated mortgages built-in.
It’s an obvious way out of the crazy world of the McBroons, who seem to turn everything they touch into a solidifying rock bottom of common sense and diligence.
It seems few of the McBroons have actually run anything remotely commercial in their lives. If UK PLC was a commercial undertaking it would be going bust about this time and the McBroons would be collecting their redundancy payments and handing back the keys to the limo.
Having forced Lloyds Bank into a shotgun marriage with busted HBOS, McBroon preened how single-handedly he’d saved British banking and trotted off to meet the more sensible leaders of other countries to “lead the world out of recession”.
He never paused to get the Bank of England, his beloved and disgraced Financial Services Authority (FSA) nor his army of foolish fiscal mandarins to check the balance sheet of beggarly HBOS. Nor did Lloyds do much checking, in their haste to grab the McBroon billions in bribes if they saved his skin.
Ten billion quid is a lot of money and that’s what Lloyds will have to write off having found toxic assets in HBOS. It was comeuppance week for the British bankers when they trotted along to Westminster to say sorry for fouling up the world economy and wrecking the lives of millions.
They said it wasn’t their fault though…implying that that the FSA, operating the light touch” governance of McBroon for a decade or so, had not rapped their knuckles or threatened to downgrade the chateau wine at their next cosy luncheon..
So where to now for cash-strapped Brits, whose property assets and pensions are worth a third less than they thought and the markets that govern the prices are in total disarray and unlikely to show any growth for years to come, according to some pundits.
Think Spain, where the banks were banned from getting involved with American trailer trash mortgages, are still reporting good profits and have plenty of cash waiting for mortgage applicants. They also have the best interest rates for savers with one deal from La Caixa at 6% on 12 month call, being over-subscribed by a long way.
The Spanish banks also have a growing supply of repossession homes at up to 50% below current valuation and they can be purchased from specialist broker http://www.propertyinspain.net/ often with low cost subrogated mortgages built-in.
It’s an obvious way out of the crazy world of the McBroons, who seem to turn everything they touch into a solidifying rock bottom of common sense and diligence.
It seems few of the McBroons have actually run anything remotely commercial in their lives. If UK PLC was a commercial undertaking it would be going bust about this time and the McBroons would be collecting their redundancy payments and handing back the keys to the limo.
8 February 2009
Spanish property winter warmers
While Britain feels the chill in every sector, including the weather that has knocked more billions out of the economy, Spain is now being widely seen as the best place for bargain properties among hard-pressed Brits.
With uncertain futures thanks to the McBroons blunders and little sign of recovery, many UK residents plan to vote with their feet and many of them before the next general election that might finally sweep away the McBroon legacy.
The Spanish economy is regarded by commentators as in a better state than that of the UK, the weather offers 300 days of sunshine every year and property bargains are up to 50 percent down on the peak and now at the level of 2003. Even factoring in the sterling exchange losses, that’s still enough of a bargain to go for.
Having a property asset in the world’s strongest currency can be beneficial and for savers being offered a paltry 0.75% by some UK savings organisations, the thought of a juicy 6 percent interest from stronger Spanish banks is already tempting some Brits. The first of these deals, from La Caixa, is about to become over subscribed.
Brit and other north European property buyers are doing their research carefully on the specialist online sources of Spanish bank repossessions and must sell property in Spain and cannot quite believe they can buy a modern apartment within walking distance of the sea for EUR 35,000 and have a panoramic view of the sparkling Med if they opt for another bargain at EUR 55,000.
Three bedroom villas with swimming pools on golf resorts start at EUR 190,000 as hard-pressed owners and developers join the dash for cash.
These are many other bargains can be found at the highly rated website http://www.propertyinspain.net/ where buyers are provided with honest answers and immediate access to Spanish partner banks willing and able to provide generous mortgages to Brits with an eye for these Spanish property winter warmers…
With uncertain futures thanks to the McBroons blunders and little sign of recovery, many UK residents plan to vote with their feet and many of them before the next general election that might finally sweep away the McBroon legacy.
The Spanish economy is regarded by commentators as in a better state than that of the UK, the weather offers 300 days of sunshine every year and property bargains are up to 50 percent down on the peak and now at the level of 2003. Even factoring in the sterling exchange losses, that’s still enough of a bargain to go for.
Having a property asset in the world’s strongest currency can be beneficial and for savers being offered a paltry 0.75% by some UK savings organisations, the thought of a juicy 6 percent interest from stronger Spanish banks is already tempting some Brits. The first of these deals, from La Caixa, is about to become over subscribed.
Brit and other north European property buyers are doing their research carefully on the specialist online sources of Spanish bank repossessions and must sell property in Spain and cannot quite believe they can buy a modern apartment within walking distance of the sea for EUR 35,000 and have a panoramic view of the sparkling Med if they opt for another bargain at EUR 55,000.
Three bedroom villas with swimming pools on golf resorts start at EUR 190,000 as hard-pressed owners and developers join the dash for cash.
These are many other bargains can be found at the highly rated website http://www.propertyinspain.net/ where buyers are provided with honest answers and immediate access to Spanish partner banks willing and able to provide generous mortgages to Brits with an eye for these Spanish property winter warmers…
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