Homes & Watson

Over the last 2 years, Spain’s housing bubble has burst, in line with a number of other countries inside the Eurozone or the US.
Although it is true that Spain’s overpriced housing prices have plummeted and that they should continue this downward trend, it seems like prices are plateauing of late and will continue along these lines in the months to come.

The Spanish property market juncture is quite different from that of the UK, where certain housing zones are even experimenting rising prices. Spain is undergoing two very specific realities, which make its market well worthy of study and which will help understand why now is the moment to buy in Spanish territory.

The state of real estate affairs over the last few years has favoured banks invariably. Since the bubble burst, many construction companies have gone bust, transferring their housing stock to the financial corporations in view of the impossibility of refinancing their debt. The current property portfolio of the banking institutions is such that they practically control half of Spanish real estate assets, having de facto become realty agencies.

Why do we say that the price fall will hit plateau over the next few months? To understand this, suffice to know that Spanish banks have turned off the credit tap for new housing construction. Therefore, if constructors are unable to build homes and a large part of the current stock is in the hands of the banks, it is the latter that control the market and decide on the average selling price.
Meanwhile, we are also dealing with the issue of mortgages, controlled as well by banks. If somebody wants to buy a home and needs a mortgage… you got it! They have to go see their banker. Given the fact that banks own a great deal of property, it’s not hard to guess to which properties they will concede the best financing conditions. Thus, over the next few months, prices will remain more or less at a par with today’s. The meagre 12% drop of the last four months-period is proof, especially when we measure it up against the appalling 240% overpricing on a good number of properties.

On another token, we have been experiencing the proliferation of Outlet or Low Cost Property Fairs, attended by a good number of agencies and construction companies to sell their stock at very competitive prices. They need the cash faced with the banks’ refusal to refinance or process new loans.
The Residential Property Outlet Show, held in Madrid’s Ifema fair grounds from 24th to 26th September, is an excellent opportunity to purchase property in Spain before the market falls fully in the controlling hands of the banks. Benefit from the bargains and top discounts that real estate agencies and builders are willing to give.

Homes & Watson will also be attending the fair to consult with and advice its British clients during the purchase of Spain’s sun-drenched properties… of course, always under their rule of thumb: “Buy sustainably, never over your possibilities.” It seems evident.

Written by Jena Watson.

You can also follow me on Linkedin:

http://www.linkedin.com/in/jenawatson

Tired of reading all the doom-and-gloom stories about buying property in Spain? Well here are my top ten reasons why you SHOULD buy in Spain. Remember that I’m not an estate agent but I do live in Spain and there’s a lot to love about it. You can add your own comments to the list too…

1. The Climate

I had to start with this one really. Being able to see a blue sky practically every day is truly wonderful. We’ve had some 20ºC days this month (January) which makes winters so bearable. Some might say that the summers get a little too hot but at the same time it makes for some excellent strolls along the “paseo” on those hot evenings. Top marks for an all-round superb weather in Spain.

2. Close to Home

Cheap flights, an abundance of airlines and just two or three hours in the air means you’re never that far from home. Jumping on and off planes these days is relatively straight forward and painless (unless you’re over six foot tall….EasyJet take note) so you can jump on a plane in the morning and be sipping your vino on the terrace in the afternoon. Bliss.

3. Nice Neighbours

The Spanish have a reputation for being a friendly bunch and on the whole they certainly are. They seem prepared to put up with everyone’s poor attempts to mutter something in Spanish and don’t take offence to sandals and socks! Most communities will have a mixture of Spanish locals and expats and most of the time it’s a good mix. People seem to make more of an effort to make friends when they are abroad so chances are you’ll make friends with your neighbours quite quickly.

4. Property Bargains

Scared of buying an off plan property? Fear not. Those before you have already taken the risk for you. The market may be flooded with properties and somewhat slow at the moment but there are literally loads of nearly new resale properties on the market. Some buyers keen to sell will even drop the price a little for you. There’s lots of choice, you can shop around and bag yourself a good property at a good price. We’ve just bought a new place ourselves! Got a great price…

5. Mañana, Mañana

How great it would be if you could just get away for a few days from your busy life back home and enjoy the relaxedlifestyle in Spain. Having your own place in Spain means you can come and go as you please and enjoy the laid-back and friendly lifestyle in the area.

6. New Friends Back Home

Tell people back home that you’ve bought a place in the sun and they’ll automatically become your new best friends. There’s no better way to make friends back home than owning a property in Spain!! He he.

7. Knowledge is Power

There’s just no excuse for getting it wrong when buying a property in Spain today. Websites such as Eye on Spain are full of helpful information and advice to guide you from the moment you start looking for your property to when you finally have the keys and are enjoying the fruits of your labour. Discussion forums are full of people willing to help and give advice on all aspects of buying, living and moving to Spain. There’s just no excuse for getting it wrong these days.

8. Developed Country

Although some of us often get annoyed (and rightly so) when it takes two years to get a phone line, Spain is a very much a modern developed country. Most of the infrastructure is now in place to cope with the increased economic growth of the country of recent times but could you say the same about Bulgaria, Morocco, etc?

9. Long Term Gains

Very few people could buy a property today in Spain and sell it tomorrow for a profit. It’s just not going to happen. But that’s not what it’s about. Buying in Spain is about having an appreciating asset that you can actually enjoy. As a long term investment, Spanish property has to be a safe bet. There will always be people wanting to move to Spain and holiday here. There will always be a demand and as I mentioned earlier, a healthy and growing demand from the Spanish themselves.

10. Established Rental Market

If you’re buying a 2 bedroom apartment in the middle of nowhere chances are you’re not in it to make money from holiday rentals. Buying a decent property in popular areas means you’ll have a chance to generate some extra cash through renting it out. There are many websites that drive thousands of rental enquiries to property owners throughout the year. This demand will always be there. You’ve just got to learn to tap into it.
Well, I hope that’s helped to get you excited about buying in Spain again. It’s not all doom-and-gloom. Do your research, take your time, haggle hard and you’ll find yourself with a lovely property in the sun to enjoy for many years to come.

Via: eyeonspain

Spain’s housing minister, Beatriz Corredor, was upbeat and optimistic about the Spanish property market. She says now is a good time to buy property in Spain, there are many bargains and prices are only rising in line with inflation. She also urged developers to make an effort to sell their stock of empty property by adjusting to demand, thought to mean by lowering prices. Now is a good time to buy a newly built property.

On the question of the excess supply of property in Spain, Corredor said there are around 600,000 homes on the market, compared to annual demand for 450,000 homes. On this basis she argued that the constructions sector need to adjust to an ‘intensive’ model of refurbishing existing housing stock, as opposed to the ‘extensive ‘ model of new construction that has characterised recent years.

She also pointed out that recent housing starts of 600,000 or more a year were unsustainable, and that the real estate sector’s share of Spanish GDP, at 18%, was “far higher than desirable” for a country like Spain, bearing in mind an EU average of around 12%.

Vía: spanishpropertynetwork

Property companies and mortgage borrowers are defaulting in rapidly rising numbers as Spain’s property slump digs in, leaving the banks that financed them holding the baby. Defaults and repossessions are turning Spanish banks into some of the country’s biggest estate agents.

This is not the first time that Spain’s banks have become unwilling owners of some of the country’s largest property portfolios. It was the same story in the property crash of the early 90s. Last time round there was a happy ending, as banks sold off their property divisions for handsome profits during the boom.

According to an article over the weekend in the Spanish daily ‘El Pais’, Spanish banks have lent a combined 300 billion to developers, and 600 billion to private mortgage borrowers. As the recession bites, defaults rates have quadrupled to 3.29%, back to where they were in May 1997, compared to just 0.83% in December 2007. As loans turn sour, banks are having to take back properties.

To deal with the situation, Spain’s banks are having to get back into the property sales game.
Santander, Spain’s largest bank, has set up Altamira Santander Real Estate to try and liquidate a property portfolio of 2.7 billion Euros. Hefty discounts will be used to shift the stock, which will be promoted online and in catalogues distributed in Santander’s branches. The bank’s 20,000 staff will get first bite at the apple.

Banesto will use its property arm Promodomus to try and shift a growing property portfolio of valued at 1 billion Euros.

El Pais reports that CAM Bank, Banco Sabadell, Unicaja, Caixa Galicia, Caixa Catalunya, Cajasur, Banco Popular, and Ibercaja all have similar initiatives underway. Caja Madrid, Caja España, Caja Navarra and Caja Canarias are also selling properties resulting from repossessions.

Amongst the most aggressive is CAM Bank, which has set up CAM Real Estate Opportunities (Oportunidades Inmobiliarias CAM) to dump quickly more than 450 properties with discounts reported to be around 20% and 100% financing.

Vía: spanish property insight

Amongst all the conflicting news stories about the health or otherwise of the Spanish property market, premium property in Mallorca is still regarded by most experts as one the soundest investment opportunities available.

So why is premium property in Mallorca bucking the trend? The answer lies in the enduring beauty and attraction of the island coupled with what are now seen as far sighted planning regulations initiated in 1990.

Since the birth of tourism in Europe at the end of the 18th Century Mallorca has attracted the rich and famous. The artists, poets and writers of the 19th century, were followed by film stars of the 50s and 60s and now global sports stars and entrepreneurs are the latest to enjoy the privacy and tranquillity of the island. Richard Branson, Claudia Schiffer, Michael Schumacher and Michael Douglas are all regular visitors to their second homes on the island.

With such natural attraction and easy access from all over Europe, Mallorca could have become quickly over-developed as everyone sought to pick up a little piece of paradise. What prevented this was some incredible foresight by the Mallorcan authorities who in 1990 realised that the key asset of the island was its natural environment and therefore introduced tight restrictions on building licences on the island. These regulations severely restricted the land available for development; at one stroke both protecting the beauty of the island and immediately increasing the value of the very best positioned properties.

The planning restrictions have remained in place limiting development in Mallorca and preventing the huge build up of cheap stock properties seen in many other areas of Spain. This restriction of supply has, according to the UK’s leading developer in Spain, maintained a healthy market for the best properties on the island. Taylor Wimpey Espana’s Sales and Marketing Director, Victor Sague explains:
“Over the last two years the Spanish property market has suffered price falls comparable to those in England, but, like England, the market is now beginning to turn. The prices for new homes in locations where there is significant over-supply will continue to fall whilst homes in the best locations are in short supply and already prices are rising steadily to keep pace with demand. In the Balearics, it is not an exaggeration to say that we could be left without any stock at all in twelve months.”

With the downturn of property prices through Spain in the last two years, premium property in Mallorca has held its more of its value and is now already seeing price growth as savvy investors seek out the few bargains that remain before they become out of reach.

An exclusive lifestyle

Crystal clear waters, white sandy beaches, peaceful forests, magnificent mountains – with natural beauty like this on offer along with excellent cuisine, a vibrant culture, a wide choice of entertainment and leisure activities, and regular flights to and from countless European airports, it’s easy to see why Mallorca is just as popular as ever with tourists. But away from the crowds is where the real delights of the island can be discovered, and where the finest new residential developments can be found.
Take Los Altos Del Golf for example. In Camp de Mar on Mallorca’s sheltered south-western coast, this tranquil setting is just five minutes from the beach and only 20 minutes by car from Palma and the airport – yet seems a world away from the hustle and bustle of the major resorts. Located on the prestigious Andratx Golf complex, which includes Boris Becker and Michael Douglas among its members, it’s the perfect place to relax or rub shoulders with the rich and famous.

It’s even more remarkable, therefore, that this private collection of two, three and four bedroom townhouses is priced from only 355,000euros. The specification and build are of the highest quality, the location – with views of both the golf course and the sea – inspirational. The very best of nature and design combine at Los Altos Del Golf, one of the most desirable new developments on this very popular island.

The best of the best

Like Sandbanks in the UK, where an exclusive coastal setting and limited opportunities for development have attracted glamorous residents and exceptional demand, Mallorca is fast becoming one of Spain’s most sought-after places to call home. But with new Taylor Wimpey Espana apartments starting at just 195,000 the price to buy here is still surprisingly affordable. Maybe not for long.

Though affected by a slowdown in sales along with the Spanish market in general, Mallorca is already showing rapid signs of recovery, with both the leading Spanish bank Caixa Catalunya and the Spanish Valuation Society predicting that coastal areas with little existing stock will see the most significant increases in 2010.
Victor Sague is in no doubt that this is the time to buy in Mallorca:
“In the best areas the best units are being sold now. Those looking for a bargain may benefit from waiting for prices to fall further in less attractive developments in less attractive areas. But if you want to buy in Mallorca act quickly, as prices will only continue to rise.”

Mallorca is famous for sunshine and warm temperatures all year round. Right now it also offers the perfect climate for buying property.

Whether you’re looking for your dream place in the sun or a rewarding investment opportunity, head straight for this beautiful island in the Mediterranean. Don’t miss the boat

Via: homesoverseas

A surge in the sales of second-hand flats led to an overall increase in home sales in Spain of 9% against March 2009 and consolidates the market rebound since the beginning of the year. The increase follows the record growth figures from February when Spanish home sales grew by 18.7% the highest monthly increase for two years.

Of the 37,561 sales in March, 48.9% were made on new homes and 51.1% on second-hand properties, according to the Statistics on Transfer of Property Rights published today by the National Statistics Institute (INE).
The overall growth of 9% is being driven by the growth in second hand sales which rose by 25.1% (19 212 transactions) whilst the sales of new buildings decreased by 4% (18 349 transactions).
The overall rise is the third consecutive monthly year on year rise following two years of declining sales.
Of the 37 561 sales transactions in March, 89.5% were on standard housing and 10.5% on social housing. The former increased by 9.2% compared to March 2009.
57.3% of all transactions were recorded in just four geographical regions: Andalusia, Madrid, Valencia and Catalonia.

Via: homesoverseas

Real cost of mortgaged property in eurozone drops by 8% in four months. British investors who took out euro-denominated mortgages earlier this year in order to beat the poor exchange rate are already seeing the benefits.
In February, Conti reported that an increasing number of clients were opting for euro mortgages for their eurozone property purchase. This trend has continued, and investors are already benefiting from this decision. A euro-denominated mortgage not only allows them to take advantage of cheap interest rates, but could potentially save them significant sums of money if, as experts predict, sterling appreciates against the euro over the next few years, as this will reduce the sterling cost of the property purchase.
For example, if an investor had taken out a euro mortgage of €250,000 in February this year for a property in France, based on the exchange rate at that time of around €1.1 per £1, they’d have been required to make a commitment of around £227,000 to pay that mortgage off.
The exchange rate has improved since then to around €1.2 per £1, so it would now cost £209,000 to redeem the mortgage – a reduction of £18,000, or 8 per cent, in the sterling cost of the property in just four months.
If, over the next year or two, the exchange rate continues to rise in favour of the pound to €1.3, investors would only have to find around £192,000 to repay the mortgage. So the cost of the property would have reduced by £35,000 in sterling terms.

Investors would have to factor in the impact of mortgage costs and notaire fees.
Clare Nessling, Conti’s operations director, says: “A euro mortgage minimises the amount of sterling you have to exchange for the overseas property purchase, as you only have to transfer money for your deposit and fees for now. Even cash-rich buyers could consider taking out a euro mortgage until the exchange rate improves, at which point they can pay it back and ultimately reduce the price they pay for the property.”
There are a number of other benefits associated with euro mortgages. If, for example, you’re going to rent out your property, having a euro mortgage means that your rental income and mortgage repayments are in the same currency. The big advantage being that the balance between income and outgoings on the property are not subject to exchange rate fluctuations, and it’s a more stable situation than servicing the mortgage repayments with sterling.
A euro mortgage also allows you to benefit from European interest rates, which are often lower than sterling rates. Even a small difference could potentially save you a lot over the
lifetime of the mortgage. The fees on some euro loans can also be substantially lower than on some sterling mortgages.
And in general terms, one of the biggest advantages of an overseas mortgage is that the lender, similar to those in the UK, will do its own checks on the property, ensuring that a proper legal title exists, that the property is registered in the buyer’s name and that a valuation of the property takes place. Banks will also check other issues such as planning permissions and building licences.
Investors should, of course, consider the impact on costs should exchange rates go against their favour. These examples are based on the sterling strengthening against the euro, as widely predicted by experts.

Vía: homesoverseas