The IMF’s latest verdict on the Spanish economy, which is overall better than the one it presented on the state of the UK, suggests there will be recovery in 2010 after a decline of three percent in GDP this year.
That’s good news, as is the information that housing starts are down 20 percent, and that many of the empty, newly completed homes could well finish up in the rental sector because the Spanish Government is offering young couples a useful rent subsidy.
Take away the housing surplus, and demand – more than 300,000 sales a year currently - should begin to drive up prices again to the benefit of existing owners and those planning to purchase a property in Spain this year. Current prices are 30-40 percent below the peak and are unlikely to fall much further because sales are getting brisker at the present level.
Would-be buyers, hanging on in the hope of cheaper prices, may just be a mite disappointed. “Cheap” means “cheap” and rarely reflects the premium aspects of a property which are location, location, location. “Cheap” away from amenities like beaches, decent restaurants, good access to transport, remains just “cheap”.
Conversely “good value” would be a price paid for a property that was well-built and came with all the attributes that would benefit the new owner and help them to sell it when necessary. “Buy to sell” is the mantra of US realtors, and they are the best in the world.
It is currently possible to marry “good value” with a “good deal” in the Spanish real estate sector, as developers come under the cosh from their development funding banks. They are being innovative in their new beefed-up marketing activities.
One of the leading established property sources in Spain has offers that include “try before you buy”, 90 percent mortgages, 3-year rental guarantees, 40 percent discounts, purchase in sterling, view trip cashback vouchers, legal security paperwork etc.
Unlike many in the property boom years, these deals are often underwritten by the very bank putting the pressure on the builder/developer to generate the cash to finance their loan.
Working together in that way adds a lot of credibility to the offers and an incentive to book one of the summer flight bargains from Ryanair or Easyjet and for buyers to see for themselves what great value for money they can bag for themselves in the New Spanish Property Market.
They might find, as the IMF did, that life's looking a lot better in sunny Spain.
Showing posts with label low costa bargains. Show all posts
Showing posts with label low costa bargains. Show all posts
1 May 2009
11 April 2009
Beating the airport Rip-off Merchants
Just when you thought the Great Recession 2008-10 had brought the end of Rip-Off Britain with High Street prices reduced by up to 50% and most service companies bending over backwards to oblige the new god-like, tight-fisted consumer…
Just when you deduced the Governing McBroons had benefitted from serious brain surgery and reduced taxes for the first time in a decade…
When we can snap-up Ryanair flights to Madrid for a zero cost and laugh out loud as we hand over £17 for “airport charges” - the airport operators introduce more of their pesky on-costs.
£10 a head towards “development costs”, a fiver to “fast-track” us through the delays caused by their own security inefficiencies, £1 to be dropped off at the terminal and, coming soon, £1 for a pee and another fiver to exit the building near your waiting plane?
The Rip-off is back, the lunatics are running the asylum and Joe Public is left picking up the costs as usual. Easyjet and Ryanair have already pulled out of airports who have introduced these new charges, taking thousands of passengers out the door with them.
Spain is the major destination for most Brits and they’ll switch to airports showing a little more respect to their customers as they fly to the beach or for property purchase viewing. Voting with their wings may restore sanity because Brits know things costs 30% less in Spain and their property aspirations can be satisfied with 1,000’s of Costa bargains.
Buying a property in Spain for holidays or fulltime living can reduce the impact of Rip-off Britain. And if you have to go back to Blighty there are flights from Alicante for a tenner including the minimum charges of the airport operator.
And if that’s too much, one leading Spanish property website is providing buyers with a Cashback Voucher worth EUR 500 that will buy a few glasses of cool cava to celebrate the defeat of the Rip-off merchants.
Easter marks the start of the property buying season in Spain and it's never been cheaper, easier or more legal to snap perfectly good homes from EUR 60,000.
Just when you deduced the Governing McBroons had benefitted from serious brain surgery and reduced taxes for the first time in a decade…
When we can snap-up Ryanair flights to Madrid for a zero cost and laugh out loud as we hand over £17 for “airport charges” - the airport operators introduce more of their pesky on-costs.
£10 a head towards “development costs”, a fiver to “fast-track” us through the delays caused by their own security inefficiencies, £1 to be dropped off at the terminal and, coming soon, £1 for a pee and another fiver to exit the building near your waiting plane?
The Rip-off is back, the lunatics are running the asylum and Joe Public is left picking up the costs as usual. Easyjet and Ryanair have already pulled out of airports who have introduced these new charges, taking thousands of passengers out the door with them.
Spain is the major destination for most Brits and they’ll switch to airports showing a little more respect to their customers as they fly to the beach or for property purchase viewing. Voting with their wings may restore sanity because Brits know things costs 30% less in Spain and their property aspirations can be satisfied with 1,000’s of Costa bargains.
Buying a property in Spain for holidays or fulltime living can reduce the impact of Rip-off Britain. And if you have to go back to Blighty there are flights from Alicante for a tenner including the minimum charges of the airport operator.
And if that’s too much, one leading Spanish property website is providing buyers with a Cashback Voucher worth EUR 500 that will buy a few glasses of cool cava to celebrate the defeat of the Rip-off merchants.
Easter marks the start of the property buying season in Spain and it's never been cheaper, easier or more legal to snap perfectly good homes from EUR 60,000.
28 February 2009
Why the Spanish property bubble burst
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...
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...
12 January 2009
A wobble for Spanish property
It’s a New Year and a new marketplace for the Spanish property sector, as the bargain hunters for Costa villas and apartments gather like UK High Street shoppers prowling for closure sales and colossal discounts…
With developers and builders going down all over Spain and estate agents shutting up shop on a daily basis, 2008 was clearly the worst year ever for the property business in Spain.
The economic crisis buffeting in Spain sent the number of bankruptcies soaring by 182% to 2,864 in 2008, 38% of them in the real estate sector, reveals a new report from Pricewaterhouse Coopers. “Between October and December there were more insolvency proceedings than in all of 2007,” says the report, which warns that the commercial courts could collapse under the workload if this trend continues in 2009.
Bankruptcies amongst developers and brokers rose from 74 in 2007 to 387 in 2008, and in the construction sector from 182 to 692. The rapidly rising number of property companies being forced into administration, like Martinsa-Fadesa, is likely to have a significant impact on the market.
There is even more bad news - the number of Spanish properties bought and sold in October (39,201) was 27.5% less than the same time last year, according to the latest figures from the Spain’s National Institute of Statistics (INE). In the first 10 months of the year, sales are down by 28.4% compared to last year.
That means that the Spanish property market has shrunk by almost 30% in a year. Instead of producing 600,000 homes a year, it’s now doing 400,000 – still more than the UK, Germany and France combined.
So, maybe, more of a wobble than a disaster? A viewed now shared by many buyers in Northern European countries where growing recession, ineffectual Government action and uncertain futures are combining to focus on grabbing some of the property bargains available in Spain.
While new build prices are falling 6.6%, the biggest ever recorded, according to Sociedad de Tasación, one of Spain’s leading appraisal companies, there are plenty of homes – key ready with 10 year guarantees and resales with appliances and furniture – that can be snapped up at prices 30-50% below their current valuations.
It seems that enough is enough for many families and retirees in the UK and other colder climes and they are now clamouring for the big discounts in the warm, welcoming Costas.They Google search for “Spanish bank repossessions” and “Half-price property in Spain” or even “Must sell Spanish homes” and they find the top ranked source for exactly this kind of property.
It’s PropertyInSpain.Net, a long established website with a good affiliate network on the ground to help registered buyers find the best deals. They have 1,000s of bargains and an online showcase of properties to tempt the discount hunters. Just as important, the banks are prepared to lend up to 80% of the price, given the unprecedented loan to value ratios.
Massive discounts, generous low cost mortgages, cheap flights to a still low-cost country from a high-cost, chaotic homeland threatened with burgeoning tax bills for decades, is a bit of a no-brainer for the 250 families a week registering for Spanish bargains…
With developers and builders going down all over Spain and estate agents shutting up shop on a daily basis, 2008 was clearly the worst year ever for the property business in Spain.
The economic crisis buffeting in Spain sent the number of bankruptcies soaring by 182% to 2,864 in 2008, 38% of them in the real estate sector, reveals a new report from Pricewaterhouse Coopers. “Between October and December there were more insolvency proceedings than in all of 2007,” says the report, which warns that the commercial courts could collapse under the workload if this trend continues in 2009.
Bankruptcies amongst developers and brokers rose from 74 in 2007 to 387 in 2008, and in the construction sector from 182 to 692. The rapidly rising number of property companies being forced into administration, like Martinsa-Fadesa, is likely to have a significant impact on the market.
There is even more bad news - the number of Spanish properties bought and sold in October (39,201) was 27.5% less than the same time last year, according to the latest figures from the Spain’s National Institute of Statistics (INE). In the first 10 months of the year, sales are down by 28.4% compared to last year.
That means that the Spanish property market has shrunk by almost 30% in a year. Instead of producing 600,000 homes a year, it’s now doing 400,000 – still more than the UK, Germany and France combined.
So, maybe, more of a wobble than a disaster? A viewed now shared by many buyers in Northern European countries where growing recession, ineffectual Government action and uncertain futures are combining to focus on grabbing some of the property bargains available in Spain.
While new build prices are falling 6.6%, the biggest ever recorded, according to Sociedad de Tasación, one of Spain’s leading appraisal companies, there are plenty of homes – key ready with 10 year guarantees and resales with appliances and furniture – that can be snapped up at prices 30-50% below their current valuations.
It seems that enough is enough for many families and retirees in the UK and other colder climes and they are now clamouring for the big discounts in the warm, welcoming Costas.They Google search for “Spanish bank repossessions” and “Half-price property in Spain” or even “Must sell Spanish homes” and they find the top ranked source for exactly this kind of property.
It’s PropertyInSpain.Net, a long established website with a good affiliate network on the ground to help registered buyers find the best deals. They have 1,000s of bargains and an online showcase of properties to tempt the discount hunters. Just as important, the banks are prepared to lend up to 80% of the price, given the unprecedented loan to value ratios.
Massive discounts, generous low cost mortgages, cheap flights to a still low-cost country from a high-cost, chaotic homeland threatened with burgeoning tax bills for decades, is a bit of a no-brainer for the 250 families a week registering for Spanish bargains…
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