In this section you can find the latest and most important news about the Real Estate sector in Spain as well as other information of interest to foreign property owners in Spain.
Spain's largest developers don't build a single home in two months
Month DD, YYYY
The largest developers in Spain represented by the G-14 property group spent an entire two months (December 2008 and January 2009) without initiating a single home construction; a development that, according to company spokespeople, has never been seen.
Though official reports have not yet been compiled for February, all indications point to a similarly bleak situation. Sources explained that nothing had occurred to justify an expectation of any significant change for the better.
The collapse in housing sales (which decreased by 32% in 2008, when according to the Ministry of Housing barely over half a million homes were sold) and the stock of unsold properties (estimated at between 700,000 and one million) along with funding problems are setting the tone for the halt in the construction sector.
Most sources agree that 2009 will see the construction of a historic minimum of units: barely 150,000; a stark figure when compared to the highs of nearly one million reached only a few years back. (El Mundo: Mar 3, 2009)
Mortgage holders to experience biggest savings in a decade
March 2, 2008
Families and businesses in Spain have had a tough time with ever-stricter banking policies and the difficulty of obtaining loans, but those who already have a mortgage could experience decreases in the cost of their mortgages like they haven't seen in over a decade.
The savings will be greater the longer the term of the mortgage. A family that refinances a 25-year mortgage of 150,000 € with today's Euribor rate, for example, will save approximately 180 euros on their monthly payments. This would imply a 2,172 € yearly savings; money that could be well spent elsewhere.
For those with longer-term mortgages, the savings can be even greater. A 50-year mortgage, for example, refinanced with today's rates would be as much as 32% cheaper. The fall in the Euribor has thus become one of the few escape routes for families and businesses in the current hard-pressed Spanish economy. (El País: Feb 27, 2009)
Government extends repayment period for mortgage moratorium by 5 years
February 9, 2009
The government approved adding another year to the partial moratorium on mortgage payments announced last November as part of President Zapatero's economic rescue package. The maximum repayment period for the deferred payments was also extended by 5 years (from 10 to 15).
The mortgage moratorium can be taken advantage of by the unemployed (which includes over 3 million people in Spain as of January), self-employed individuals who are out of work, and pensioners with dependents. Qualifying mortgage holders can reduce their payments by half, with a limit of 500 € per month during a period of two years. The implementation for this anti-crisis measure, originally slated for January 1, will take effect on March 1 instead.
Specifically, those who decide to take advantage of the mortgage moratorium will postpone the repayment of 50% of their mortgage payments between March 1, 2009 and February 28, 2011. Beginning March 1, 2011, the initial mortgage payments will once again take effect. The repayment period for the postponed payments, however, will not begin until March 1, 2012. (El Mundo: Feb 6, 2009)
Entrepreneurs urge for unity to overcome crisis
January 30, 2009
Developers and builders at a meeting in Barcelona pushed for a national non-partisan pact, backed by all of Spain's political, labor and business forces, that would inspire the necessary confidence in the citizenry to overcome the economic crisis.
Eduardo Bueno, president of the real estate agency Ibusa, criticized the "spectacle" put on by the country's political parties regarding the crisis and the measures adopted by the Spanish government to face its various challenges. Bueno said the government's solutions have, for the most part, been "hasty and poorly developed," while admitting it has initiated a few good measures that haven't been given due recognition or appreciation.
Another participant in the meeting was Javeir Solano, president of the estate agency Restaura. Solano took on a more self-critical tone, reminding his fellow entrepreneurs that the economic crisis dealt its coup de grace to a real estate sector that had committed numerous mistakes and was responsible for an alarming amount of "excesses."
"We've built more homes than needed, in some parts of Spain more than in others, encouraged by the banks and easy, cheap credit," said Solano. He added that real estate professionals "have to address our share of the responsibility by ourselves, which is possible." (finanzas.com: Jan 30, 2009)
Average home prices drop for first time since 1993
January 19, 2009
Property price statistics easily lead to confusion due to the disparity in the various results, but for once it seems they all coincide on one point: the average price of a home fell in 2008. According to the Spanish Ministry of Housing the devaluation occurred at 3.2%, a downward trend that hasn't been seen in over 15 years. The strongest property devaluations took place in Madrid and its surrounding provinces, one of the areas where the concluded property boom was at its most intense.
The two sources for official statistics in the country, the National Statistics Institute (NSI) and the Ministry of Housing, both showed decreases in the price of real estate. The results, however, did not pair up exactly between the two because the organizations are informed by different sources. The NSI uses data from home deeds, while the Ministry of Housing looks to real estate appraisals.
The Ministry of Housing's data shows the volume of appraisals fell by 41.7% compared to 2007. However, developers say that the drop in prices was higher; somewhere between 15% and 20%. (El País: Jan 16, 2008)
Big developers looked beyond Spain in 2008
January 12, 2008
Spain's largest developers closed 2008 with a new record for construction contracts abroad. A total of 12 million euros were billed last year for such projects, exceeding the previous year's figure by around 9% according to provisional data from the Association of Spanish Contractors (SEOPAN).
The biggest names in Spanish property used the foreign market as a boost amid the sector's tough times and managed to post record profits abroad for the fourth consecutive year since 2005.
According to the figures from SEOPAN, total billing for business outside of Spain - including contracts of all kinds - reached 20 million euros. Approximately half of this amount was attributed specifically to construction contracts. (urbanoticias.com: Jan 12, 2009)
Real estate developers experience huge boost on the stock market
Jaunary 5, 2009
Just a few days into 2009 real estate companies experienced a day to remember in the stock market. Shares for large developers such as Realia and Inbesós rose through the roof, at more than 10%, despite the fact that the day was marked by low trading volumes.
This extraordinary and unexpected development may have come about due to a variety of factors. Juan José Fernández-Figaro, of Link Securities, suggests that many investors had probably sold short and subsequently been forced to buy shares back in order to cover themselves. "I don't think anyone's taking up any serious positions, given the poor outlook for the Spanish property sector. It's too early [for a comeback] since the sector has yet to complete a long journey through the desert," he said.
Another explanation may be the buyback of shares by investment funds that got rid of them towards the end of 2008 to clear them from their end-of-year stock portfolio. Bargain hunters out to take advantage of the industry's low prices could also be behind the stock explosion.
Rich Spaniards will lead property investment in 2009
December 22, 2008
According to the head of the real estate services firm Cushman & Wakefield in Spain, extraordinarily wealthy Spaniards will take center stage as the main property investors next year. Foreign property investment groups will lack the reach to open new funds in Spain, and Spanish private equity investors will remain in the background waiting to take up distressed assets shed by liquid-hungry developers.
"I expect that in the early part of next year, Spanish private families will be the strongest investors in the market," said Roger Cooke, adding that their best bet will probably be to focus on office space: "I suspect the office market will begin to return before the retail market. We haven't seen the last of retail sales problems, and the office market (in Madrid and Barcelona) is not oversupplied like it has been in previous cycles." The trend will be of smaller investments of up to 50 million euros, which will be more manageable to family investors.
Cooke said the aggressive expansion of the now concluded Spanish property bubble created billions of euros in debt that has forced most developers to sell off assets in an effort to meet credit obligations. This has resulted in a stressed, but not distressed market, he says, since in his opinion banks won't pressure lenders excessively to avoid becoming burdened with toxic debt. (Reuters: Dec 15, 2008)
Finance Minister Says Spain Could Play Key Role in International Financial Reforms
December 15, 2008
Pedro Solbes, Spain’s Finance Minister and the European Commissioner for Economic and Monetary Affairs, said recently that Spain can play an important role in the reform of the international financial system by sharing the country’s valuable experience with the International Monetary Fund (IMF) and the World Bank.
During the opening of a conference dubbed “Spain, the IMF and the World Bank: Fifty Years of Cooperation,” Solbes explained that Spain places great importance on international cooperation in all spheres as well as on a vocation of active participation in international financial institutions: “We believe we’re contributing and can contribute a lot to the process of regulatory and supervisory reform of the international financial system,” said Solbes.
In reference to the international financial crisis, Solbes spoke of its intense effects on the Spanish economy and emphasized the need to continue with ambitious structural reforms to overcome the country’s own crisis as soon – and in as healthy a position – as possible, with a more robust and flexible growth model.
Solbes, who in the past has criticized the IMF for painting an overly bleak picture for the future of Spain’s economy, backed concerns voiced by the institution that Spain would need structural reforms at all levels of its economy if it is to avoid a prolonged period of weakened economy and high unemployment. The IMF said next year, Spain’s economy would contract by at least 1%, ending a 15-year period of steady growth. (Finanzas.com: Dec 15, 2008)
Developers propose a 4% VAT reduction to stimulate demand
December 10, 2008
The president of Spain's Association of Developers and Builders (APCE), José Manuel Galindo, proposed a series of contingent measures to ameliorate the property crisis and its effect on demand, economic activity and employment. Included among the proposals was a plan to decrease the VAT on home purchases by as much as 4% in order to stimulate demand and drain the stock of unsold homes.
According to Galindo, nearly one million jobs – both directly and indirectly associated with the construction sector – will be lost in 2008 and 2009 due to the crisis. This figure is derived from the reduced number of homes he says will be built due to decreased demand and the consequent accumulation of unsold homes. Galindo claims 600,000 idle properties already burden the market.
APCE's figures show that that in 2008, approximately 250,000 new home constructions were initiated (about 300,000 less than in 2007). This, he claims, will result in the destruction of some 490,000 construction jobs (340,000 direct and 150,000 indirect). In 2009, Galindo foresees new construction could decrease by as much as half with respect to 2008 – with only 150,000 new projects initiated – wiping out an additional 340,000 jobs.
"Besides the fact that the sector has experienced an excess in production that needs adjusting, and besides the fact that alternatives for economic growth must be sought, in the short term it's necessary to make the sector's transition more livable in terms of destruction of employment and wealth," said Galindo at the press conference. (urbanoticias.com: Dec 10, 2008)
Private Spanish equity firms to invest in ailing builders
December 3, 2008
Jaime Hernández Soto, chairman of Spain's Private Equity Association (ASCRI), said in a Reuters interview that a number of important deals between private equity companies in Spain and builders desperate to sell off assets will soon come through.
"We won't see growth yet in 2009, but volumes should stabilize. There will be a lot of investment opportunities arising from the financial crisis," said Soto.
Some of the companies to sell assets before the end of the year will include Sacyr Vallehermoso, which will sell its infrastructure company Itinere (holding concessions of roads in seven countries) to Citigroup Infrastructure Partners; Acciona, a large and diverse holding company with operations in 30 countries; and ACS, one of Spain's largest construction companies.
Soto pointed out that while the financial crisis will create excellent investment opportunities, the uncertain atmosphere will also lead to mistakes. Because of this, he predicted the disparity in returns on the assets offered by construction companies will be much higher than in previous years. (Reuters: Dec 2, 2008)
Barcelona cemetery alive with renewable energy
November 24, 2008
Real estate is so tight in Barcelona's suburbs that a plan to install solar panels at a mausoleum in Santa Coloma de Gramanet, originally met with resistance from families of the deceased, was approved after a public campaign in support of the project. The cemetery was cited as an ideal location for the installation of 462 solar panels because it was one of the few open areas in the crowded suburb that received ample sunshine throughout the day.
The panels were installed over the cemetery's mausoleums and according to its owners (who are also involved in renewable energy) they will create enough energy to decrease the amount of carbon dioxide produced in the area by 62 tons and provide yearly energy needs for 60 homes. A company spokesperson said about the project: "The best tribute we can pay to our ancestors, whatever your religion may be, is to generate clean energy for new generations."
There are already plans to increase the number of solar panels at the cemetery in order to triple the amount of electricity currently being generated. So far, the project has cost approximately 720,000 €. (BBC News, November 24 2008)
5 arrested for real estate corruption in Murcia
November 18, 2008
Five people were arrested as part of an investigation launched by a Murcia court for an alleged case involving bribery, prevarication and negotiations prohibited to public officials in the municipality of Librilla. Among the detained are former town hall official Luis García Cano, his wife, and a town hall technician.
A Murcia judge has ordered searches in a number of buildings owned by the Ministry of the Presidency of the Autonomous Community of Murcia, in the Librilla Town Hall, at a local company allegedly involved in the case, and in private homes and head offices for various companies throughout the towns of Librilla and nearby Los Alcázares.
Sources to the Spanish press indicated police had entered Librilla's municipal building, blocking all entrances and exits and not allowing civil servants to leave or communicate with the exterior. (20 Minutos, November 18 2008)
70% of Spanish estate agencies predicted to close by 2009
November 12, 2008
A study by Spain's Association of Real Estate Professionals (in Spanish, APEI) estimates that seven out of ten estate agencies in operation during January of 2007 will have closed its doors by the end of the year, due to the sharp fall in sales caused by the property crisis.
In absolute numbers, of the 60,000 agencies that did business towards the end of 2006 (while the real estate boom was in full swing), the study suggests a mere 18,000 will be left standing in 2009.
APEI's president, Óscar Martínez Solozábal: "Any Spanish city, regardless of size, has seen the number of estate agencies multiply in the last years by between 30% and 40%, so that now we're returning to pre-boom figures, although in a very brusque fashion." (El País, November 11 2008)
Madrid's SIMA 2009 embraces new anti-crisis strategy
November 4, 2008
The eleventh annual Madrid International Real Estate Exhibition (SIMA 2009), which will be held May 26-30, will put more emphasis on professional investors and international markets as part of its strategy to overcome the developing real estate crisis.
The director of SIMA 2009, Eloy Bohúa, stated during a presentation for the exhibition that next year's event will be extremely important for the recovery of the property sector. Bohúa emphasized that the organization is planning a more dynamic and interactive fair than in years past, open to "the new reality of the sector and its new protagonists."
Under the new strategy, which according to the event's director will constitute a "new first edition," organizers hope to attract more international exhibitors and offer more opportunities to investors. SIMA 2009 has also announced it will make room for non-residential sectors, such as shopping centers, logistics, hotels, and leisure facilities. (eleconomista.es, October 29 2008)
Only 8% of Spaniards willing to buy a home
October 27, 2008
With all of the uncertainty in Spain's property market and in the midst of the country's financial crisis only 8% of Spaniards are willing to buy a home, according to a study developed by the multinational plaster manufacturer Saint-Gobain Placo.
The study goes on to conclude that only around 24% of Spaniards would consider restoring their home, while 69% said they would like to do so two years ago. The study also marks a recent trend among Spaniards who are moving out of apartments and into houses in larger numbers than ever.
Since 2006, the study shows, the number of Spaniards living in apartments has decreased from 90% to 80%. This change is due in large part to the increase in the number of houses on the market, which now represent 10% of the homes in the country (compared to 5% two years ago). According to Placo, another important reason for this exodus is that 58% of Spaniards desire a larger home; since 2006 the number of Spaniards moving to the center of a city has decreased significantly, from 70% to 35%.
A separate study by the online property search engine Facilísimo suggests the average price of a Spanish home, at around 260,000 euros, is 8% above what most Spaniards are wiling to pay. The results were obtained through a survey, with average home prices based on over 100,000 sale listings that were published on the portal during the first quarter of 2008. (El Pais, October 27 2008)
Home values fall by 4.9% in September
October 20, 2008
The housing market continues along its precarious path as sales drop, fewer new projects are initiated, and home values fall. According to statistics released by Tinsa, the leading Spanish real estate appraisal company, property values saw a 4.9% year-on-year drop in September and a 5.9% drop since January.
As explained last Tuesday by Tinsa's managing director, Luis Leirado, the accumulated fall of prices up to September has been more pronounced in the metropolitan areas (8.8%), the Mediterranean coast (8.1%), and the larger cities and capitals (6.5%).
The data released by Tinsa also indicates that out of the 185,000 new homes entering the market during the second quarter of the year, only 75,000 were sold. This leaves 110,000 unsold properties to be added to the existing stock of 680,000. The appraisal company predicts only 300,000 new homes will be sold by the end of the year, leaving the number of unsold properties as high as 930,000. (El Pais, October 14 2008)
Prices fall, opportunities arise
October 13, 2008
As real estate companies gathered in Malaga for this year's Simed event (Spain's fifth-running Mediterranean real estate convention), the picture was entirely different from only a year ago. Of the 109 exhibitors in attendance last year, only 30 remained. While the 2007 convention spanned more than 16,000 square meters, this time around barely 3,500 square meters were occupied.
"This year we're just here to sell," said a participant at the convention, alluding to the excesses in decoration and catering of previous years. With prices sinking, promoters and estate agencies set on recuperating clients at all costs resorted to unheard-of bargains, including even a "two for one" deal by Malaga-based estate agency Salsa Inmobiliaria.
Other bargains included price reductions of up to 20%, apartments as low as 120,000 euros, rentals with option to buy, and several months of free mortgage. (El Pais, October 10 2008)
50 billion euros for Spanish rescue plan
October 7, 2008
Spain will be the first country to emulate the US’s buyback plan with a similar rescue maneuver to help keep its banks afloat.
Over 50 billion euros (roughly 4.5% of Spain’s GDP and nearly a third of the proposed 2009 government budget) will be allocated to a fund that will help Spanish credit institutions operate smoothly and continue in operation, Prime Minister Zapatero says, until the market attains stability.
According to Zapatero, the fund will buy high quality Spanish assets from all banks in operation in the country. (Bloomberg.com, October 7 2008)
Government's new IPV property statistics fundamentally flawed, critics say
October 2, 2008
Spain's National Statistics Institute (INE) launched a new statistic for the very first time yesterday – calling it the "property price index" (IPV, or Índice de Precios de Vivienda) – that measures quarterly variations in home sale prices throughout Spain. Yesterday's data provided figures for 2007 and the first two quarters of 2008, while future IPV reports will be published each quarter.
According to the INE, the IPV (which measures sale prices of new and used homes but excludes data from government-subsidized housing, known as VPOs) marked a 5.3% increase for new homes between the first and second quarter of 2008, while pre-owned sale prices decreased by 4.9% within the same period. Year-on-year, property prices fell overall by 0.3% in the second quarter.
The figures published by the INE, however, have fallen under sharp criticism by analysts who point to a fundamental flaw in the method used to calculate the IPV. According to critics, the official statistics use unreliable data because prior to the bursting of the Spanish property bubble, it was common practice to declare a substantially lower sale price than the amount actually paid on a home, in order to avoid high taxes.
After the notorious property scandals that rocked the country and with the end of the real estate boom, tighter controls implemented in the sector have strongly curbed this fraudulent practice. Analysts claim the problem with the IPV statistics, then, is that the INE fails to take into account that new residential homes may have appeared to rise in value simply because people are being more honest with regard to home sale prices, not because the prices themselves are actually rising. Analysts say the failure to address this flaw has resulted in "official" numbers that show prices for new residential homes are rising (albeit at a slower rate than in previous years), when in reality the opposite is occurring.
Amid bleak outlook, a note of optimism for the real estate sector
September 29, 2008
The correction in house prices, while still in an initial phase, has not been met with increased demand in the Spanish property market. In fact, statistics show the opposite to be true; the latest figures from the Ministry of Housing indicate a fall in sales of 31.2% in the second quarter of 2008.
Among the causes of the fall in demand is Spain's economic and employment crisis, rising interest rates, and the sentiment that the adjustment in prices remains an unfinished process. One problem facing the sector shows signs of recovery, however: the currently limited financing opportunities for home purchases could be aided by recent global banking developments.
Jaime Pascual, executive director at Aguirre Newman (a leading Spanish property consulting firm) asserts that: "The measures designed by the USA and the Federal Reserve to inject liquidity into the financial sector, if successful, are good for any activity facing credit restrictions." Pascual said that if Spanish banks regain financing opportunities thanks to a corrected functioning of the global banking market, more money will be available for prospective property buyers and demand could begin its gradual return. (El Pais, September 27 2008)
Spanish home sales drop by 30%
September 23, 2008
Recent data from the Spanish Ministry of Housing shows second-quarter house sales falling by just over 30% with respect to corresponding 2007 figures. The same figures for pre-owned homes took an even larger hit, falling by nearly 50%.
The slowing demand is in part a result of over-construction during the real estate boom years (1997-2007), a factor that has also begun to negatively impact property prices. Ministry of Housing figures, however, continue to show home values rising (albeit slowly), but some analysts regard the government's data as outdated. (Reuters, September 23, 2008)
Experts foresee a 30% drop in housing prices
September 17, 2008
According to president of the Madrid Association of Economists Juan Iranzo, Spain's real estate crisis has only just begun. Iranzo said at a conference last Monday that the property market will only level out "when real prices drop by 30% and the European Central Bank decides within measure to reduce interest rates in the Eurozone."
In Iranzo's judgment, the indebtedness of Spanish families brought on by a rise in property prices of nearly 200% during the last decade along with increasing fuel costs and stricter credit conditions have provoked a strong decrease in consumer activity: "This is especially visible in families, where 50% of the consumption is financed through credit."
Iranzo made these assessments during the presentation of the latest edition of Economistas magazine, which analyzes the economy of Spanish families and is edited by the Madrid Association of Economists. (El Pais, September 15 2008)
Spain to "return to strong growth" by 2010
September 8, 2008
In a Financial Times article by Spanish Minister of Economy and Finance Pedro Solbes, the economist explains how Spain will endure a weak economy throughout 2009 only to "enter a new period of sustainable strong growth benefiting from our structural transformation" beginning in 2010.
Solbes points out that Spain's economy was not hit directly by the global subprime crisis but was weakened instead by tighter international credit and the domestic property slump, emphasizing that "Spanish banks are solvent, efficient and profitable, and well placed to withstand ongoing turmoil."
Arguing that Spain's previous decades of strong growth have brought profound and permanent structural changes to its financial systems – transforming the country into a globally competitive and integrated economy – Solbes states: "We have room to maneuver and will help to offset the social cost of the downturn while maintaining the investment in infrastructure and education needed to enhance future productivity." (Financial Times, September 8 2008)
Zapatero to assist unemployed construction workers
September 3, 2008
Spanish Prime Minister José Luis Rodríguez Zapatero announced he will present a plan next week to help hundreds of thousands of construction workers left jobless following the collapse of Spain's decade-long property boom.
Over 70% more unemployed construction workers applied for state aid this August than the corresponding period last year, marking a ten year high. Overall unemployment claims were up 25%.
Zapatero, who has already put together an economic stimulus package and enacted a number of measures to curb the country's weakening economy, said he'd present the plan at a parliamentary hearing to discuss Spain's financial situation on September 10th. (Wall Street Journal, September 3 2008)
So far, Spain escapes recession
August 27, 2008
Though faced with the lowest growth rate in 15 years, figures from Spain's National Statistics Institute (INE) show the country was the only one of Europe's four largest economies not to contract during the second quarter of 2008.
Spain posted a second quarter growth of 0.1%, following an expansion of 0.3% in the first quarter of the year. Gross domestic product grew by 1.8%, marking a 13-year low. Secretary of Economy David Vegara claims Spain will avoid recession, posting a 1.6% growth for 2008, which would represent another 15-year low and a significant reduction from the 3.7% growth in 2007.
Many economists, however, disagree with the government's estimates and predict an economic contraction starting in the third quarter of 2008 and lasting throughout 2009: "Everything is pointing to a mild recession in the second half of the year," says Deutsche Bank analyst Susana Garcia.
Spain's weakened economy is mostly due the halted construction sector and reduced consumer spending. It has also been impacted by global credit problems initiated by the subprime crisis in the U.S., though not as strongly as other European economies. (Reuters, August 27 2008)
Spain approves 24 anti-crisis reforms
August 18, 2008
The Spanish government gave a green light last week to a series of 24 measures aimed at softening the blow of a looming recession predicted to last until 2010. Among the reforms proposed by Prime Minister Zapatero are the abolition of wealth and inheritance tax.
Spaniards and foreign property owners alike will benefit from the reform, which will save them from paying wealth tax on properties purchased after January 1st 2008. Another important part of the 20 billion euro package will be a 400-euro tax rebate for 16 million workers and pensioners, to stimulate consumerism.
Further measures will include quicker approval of public works and more funding of subsidized housing to stimulate construction, new lines of credit and other forms of assistance for small and medium businesses and other packages aimed at strategic sectors such as housing, transportation, energy and environment. (El País, August 13 2008)
Spain to shorten air routes
August 11, 2008
Spain's Public Works Minister, Magdalena Álvarez, announced the government is considering altering official air routes to allow commercial airlines to fly in airspace currently reserved for military use. The change would provide quicker and easier access to Spain as well as offset high fuel costs that are hurting airlines the world over.
"If the problem is the rise in fuel prices, the best measure to support airlines is to study how to reduce fuel consumption," said Álvarez. The new routes would shorten flying times and allow airlines to save on fuel and use their crew and planes more efficiently.
Spanish airlines have been experiencing a particularly rough time as rising fuel prices coincide with the sharp economic downturn that originated in the construction sector and has spread to other aspects of the economy. Low-cost Spanish airlines Vueling and Clickair adapted to pressures by announcing a merger, and Spanair (the country's second-largest airline) responded by cutting routes and releasing a quarter of its employees. (AFP, July 19 2008)
Construction workers head for the fields
August 6, 2008
Spain's General Workers Union predicts a 10% increase in the number of Spaniards that will harvest grapes in France this year due to rising unemployment in the construction sector.
Union spokeswoman Maria Angeles Repilado says workers will be paid 8.71 euros per hour in France picking grapes, as opposed to the 6 euros per hour they'll earn for farm work at home.
The number of unemployed construction workers has risen dramatically in the last months as property sales continue to drop throughout 2008. (International Herald Tribune, August 6, 2008)
Demand for Rental Properties Skyrockets
July 28, 2008
Spain’s property slowdown and the increased difficulty of obtaining a home mortgage have shifted Spain’s internal demand to the rental market.
Between the negative impact of the country’s economic downturn on Spaniard’s plans to purchase a new home and the fact that banks won’t give loans to many who do decide to buy, the buyer’s market is drying up.
For many Spaniards looking for a home of their own, a rental looks to be the only alternative. Real estate agencies throughout the country report a 50% increase in the demand for rental properties, a niche market that’s allowing these businesses to stay afloat despite its reduced profit potential.
Spaniards Among Most Optimist Towards Future of Property
July 21, 2008
According to a recent survey, most Europeans are confident the value of their homes will increase within five years despite their understanding that property values will remain flat or fall during the next 12 months.
The survey showed Italians and Spaniards have the most optimist short-term view toward property prices. 57% of Spaniards believe that in 2013 the price of their home will be higher than today’s value, while only 20% thought prices would fall.
The survey also concluded Europeans are clearly in favor of government support in the property market in the form of tax cuts or exemptions for mortgage holders. In Spain, only 10% of respondents were not in favor government assistance.
Spanish Banks Solid Despite Slowdown
July 14, 2008
In the midst of a weakening economy, Spanish banks have proved surprisingly resilient. Close ties to Latin America and diversification within Europe and other foreign markets has allowed banks in Spain to withstand the country’s current economic downturn.
Major Spanish banks such as Santander (the Eurozone’s largest bank) and BBVA (Spain’s second-largest bank) have maintained their strength thanks to smart banking policies in the past that allowed for little investment in U.S. subprime assets.
While competing giants in the U.S. such as Merril Lynch and Citigroup – as well as other banks across Europe – struggle for survival, Santander and BBVA have avoided direct hits from the subprime crisis and enjoy a steady stream of capital (approximately one third of their profits) from their Latin American branches.
Both banks surprised the financial world with significant growth in the first half of the year. Santander’s first-half net profits grew by 6.1% to 4.7 billion euros, while BBVA’s increased by 11.6% to 2.8 billion euros – no small task when compared to the losses experienced by other banks in the billions of euros.
Spain Approves Green Laws
July 7, 2008
The Spanish government recently approved a series of energy-saving measures that will impact homeowners in Spain. The 31 proposals set forth by Spanish Minister of Industry Miguel Sebastián include limits on thermostat settings for heating and air conditioning, with a summer minimum of 26C and a winter maximum of 21C.
The plan also aims to replace traditional and inefficient incandescent light bulbs with low-consumption bulbs by 2012. To help reach this objective every household in the country will receive two gift vouchers in their electricity bills (one this year and another in 2010) that will be redeemable for a free low-energy light bulb, replacing over 49 million bulbs in the country.
Other measures to be adopted will include a reduction of urban area speed limits by 20% to reduce the nation’s dependence on oil by 10% between now and 2011. The use of bicycles, public transportation (which will receive a boost in operating hours) and electric hybrid cars (which Spain hopes to have a million of by 2014) will also be encouraged.
Spain's Weakening Economy Offers Deep Discounts
International firms are lining up to invest in Spanish assets being offered at strong discounts due to the ailing Spanish economy. US companies such as investment bank Lehman Brothers and private equity firm Apollo have bought up large receivables accounts from Spanish banks such as Caixa Galicia, Banco Popular and BBVA.
A similar phenomenon is taking place in Spanish real estate as homes are offered at bargain prices and buyers are enticed with unheard-of incentives. Spain’s distressed economy and property market is expected to become a focus in the years to come for needy investors and homebuyers searching for exceptional bargains.
Vueling and Clickair To Merge
Vueling announced recently it would merge with Clickair, owned in part by Iberia, Spain’s largest airline. The unification of two of Spain’s most popular low-cost airlines will create the country’s third-largest carrier with a fleet of 47 airplanes and transporting nearly 11 million passengers a year.
The merger is designed in large part to stand up to low-cost carriers Ryanair and easyJet, both of which have competed intensely with Spanish companies for flights to and from Spain.
Banks to Unify in the Face of Economic Slowdown
Spanish banks may respond to the financial crisis brought on by the subprime meltdown in the US by consolidating in the face of adversity.
Despite the fact that Spanish banks were well protected against the direct impact of the mortgage crisis (thanks to Spain’s property boom and cautious banking policies), analysts say they will probably be affected by a second wave of effects.
Tighter financing conditions and an economy verging on recession has Spanish banks dealing with more debt and less loan growth; a dramatically altered scenario than that enjoyed by banks just a few years ago.
This altered environment has led the Bank of Spain to urge banks to merge, since this is one of the most effective ways of reducing costs and remaining competitive in an increasingly demanding market.
Loan Delinquency Tries Spanish Banks
The default rate for home mortgages in Spain has tripled since 2007 as unemployment rises throughout the country and an increasing number of families fail to pay their loans on time.
Spanish banks, which had been accustomed to strong growth during the last decade, are now forced to resort to emergency savings accumulated during the property boom. Global credit troubles are also making it hard for banks to finance loan growth just when it’s needed most; demand for credit from Spanish families is expected to grow by a weak 5% in 2008.
According to president of the Spanish Mortgage Association Gregorio Mayayo, loan delinquency will continue to grow at least throughout 2008 and 2009.
Spanish Housing Suffers in April
Spain's property sector took a sizeable hit in April with a 7.1% year-on-year drop in home sales and a 13.8% fall in mortgage lending. Analysts believe this unexpected drop could be due in part to the fact that Easter took place in March this year, while last year it fell in April. This factor has made analysts hesitant to draw any conclusions from the government's data.
According to the Spanish Minister of Housing Beatriz Corredor, the property slowdown will see its conclusion towards the end of 2009. She also stated that the process entails a necessary correction in house prices, which had been rising exorbitantly during the property boom of the last decade.
Spain's debilitated housing sector can be explained largely by the meeting of various factors including the end of its real estate boom, a strengthening euro, rising oil prices and global credit troubles.
Banco Santander Escapes Market Slump
April 30th, 2008 Spain's largest bank Banco Santander outshined other Spanish banks in the first quarter with a 22.4% rise in net profits during the first three months of the year. Most Spanish banks have suffered from a credit crisis attributed to the slump in the property market and a general economic downturn occasioned by the U.S. real estate crisis. Santander's first-quarter profits were of 2.21 billion euros, a substantial part of which was thanks to its recent acquisition of Banco Real. Chief Executive Alfredo Saenz affirmed that things would continue to go well for the bank despite the slump in the economy: "I'm relatively optimistic on the future. We have good diversification, a combination of emerging and mature markets, prudent risk control, no toxic products and very low bad loans." (Reuters)
Spanish Government Predicts Market Stabilization by 2010
April 28th, 2008 Spain's Ministry of Housing (MiV) considers that there may still be margin for further price decreases in property prices. The first quarter of the year saw a price increase of 3.8% compared to a 4.5% rise in the consumer price index. Hopes are that property prices will end up settling at similar levels to inflation. The MiV declared that the real estate market should attain stabilization by 2010, once supply and demand are regularized. Beatriz Corredor, the Minister of Housing will be meeting soon with developers to develop formulas that will facilitate this stabilization.
Experts Say Government Measures Not Enough
April 21st, 2008 Emilio Ontiveros and Juan José Toribio, heads of Spain's top financial analysis organizations (AFI and IESE, respectively), announced that the government's proposed 10 billion euros annually wouldn't be enough to remedy the property market's deceleration. Both figures presented their own proposals at a debate held today in Toledo on the Spanish economy. Ontivieros suggested the Spanish government follow the UK's move to temporarily trade treasury locks for loans with private banks in order to inject liquidity into the market. This, he said, would help avoid financial tensions in coming months. Toribio proposed emergency procedures such as a reduction in corporate taxes and measures similar to the removal of the weath tax (which has already been abolished).
10 Billion Euros a Year to Stimulate Property Market
April 14th, 2008 The Spanish Minister of Economy, Pedro Solbes, announced recently at the International Monetary Fund in Washington that Spain would spend 10 billion euros a year to stimulate its real estate sector. 60% of this amount will be used to provide taxpayers with a 400€ rebate. The money will also help finance small and medium-sized businesses and to facilitate access to subsidized housing. Among other measures to stimulate Spanish property are tax breaks and quicker rebate payments for sector businesses to encourage continued construction and renovation in Spanish cities.
15% Price Drop Expected in the Next Three Years
April 7th, 2008 The vice-president of Parquesol, one of Spain’s leading real estate companies, predicted a drop in house prices of 15% during the next three years. Antonio Bustamante stated that this period would be necessary for Spain’s property market to readjust following its 10-year boom. Bustamante made this statement at a round-table meeting held before the opening of Madrid’s international tradeshow and largest European real estate exhibition SIMA 2008. He stated also that the companies belonging to the G14 (a lobby that represents the country’s main estate agencies and developers) initiated 70% fewer properties in the first months of 2008. Issuing what could be seen as a mea culpa, the vice-president of Parquesol apologized for the part real estate companies played in driving up prices and driving potential national buyers out of the market. Finally, Bustamante pointed out that “all scars heal” and that sooner or later the stilled national demand will pick up following the current situation of surplus demand and extreme debt.
New Measures to Fight Draught
March 31, 2008 Last autumn and winter were the driest seasons on record in Spain, and mounting concern over civilian access to water has led the government to undertake new measures to ensure adequate water distribution throughout the country. Spain is heavily dependent on water, not only for consumption but also to maintain its hydroelectric plants – especially that the government has put great emphasis on renewable energies. Part of the plan to alleviate Spain’s driest areas (particularly the southeast) includes diverting water from the Tagus river, which flows from the north to the west of the country, to the Segura river basin in the southeast.
British Airways Considers Iberia Takeover
March 25, 2008 Britain’s premier carrier has had its eye on Iberia at least since last year, when the company negotiated a failed takeover with Spanish bank Caja Madrid (Iberia’s major shareholder). Recently, BA has turned on the heat again, spending 52 million pounds last week to up its stakes in Iberia from 9.95% to 13% and re-initiating talks with Caja Madrid. Chief executive Willie Walsh emphasized the fact that a takeover would only take place in consensus. One of the reasons for BA’s interest in Iberia (Europe’s fourth-largest carrier) is its position as a major air bridge between Europe and Latin America and, according to Walsh, the high quality of Iberia management.
Spain’s Future Las Vegas Stirs Up Opposition
March 19, 2008 Europe’s largest amusement park, to be built in Aragon’s desert, is in direct conflict with the awareness of sustainable water development raised by Expo Zaragoza 2008. This massive complex, which was considered for construction in France and Dubai, will include over 30 casinos, 70 hotels and hundreds of restaurants and shopping venues, bringing nearly 20 billion euros in investment to the area. There has been criticism of the project, however, especially related to issues of energy sustainability. The area known as Los Monegros where the project will be built is characterized for its desert landscape and also suffers from high migration. Many of the opposers to the project are locals concerned with corruption and the fact that a Las Vegas-like environment could attract organized crime to the area.
400 Euro Tax Cut First Act of PSOE
March 12, 2008 The 400 euro tax cut promised to taxpayers in Spain during José Luis Rodriguez Zapatero's electoral campaign will be the first measure of the socialist's second term, the Spanish Secretariat of Economy, Pedro Solbes, announced today. Solbes said the decision will be made during the first cabinet meeting and applied retroactively back to February 1st 2008. The tax cut was one of the most popular promises made by Zapatero, who won Spain's general elections last Sunday.
New “European Las Vegas” in Spain
February 27, 2008 Aragon’s regional government recently approved a 16 billion euro project for a massive Las Vegas style resort to be built over the next decade. Currently referred to as Gran Escala (large scale), the resort will be built on 5,000 acres of land in the desert of northeastern Spain and will include five theme parks and 32 hotels. A bullring, stadium, conference center and even wedding chapels are all part of this ambitious plan backed by a group of international entrepreneurs. According to rumor, the casino city will make Disneyland Paris seem like a backyard playground. Spokespeople for the project are in the process of approaching the owners of the 007 movies to bring in James Bond as part of one of the theme parks, which will be entitled Spyland. Other theme parks and casinos will feature themes ranging the entire span of human history, including appearances by cavemen, Roman centurions, French courtiers to Louis XIV and KGB agents.
Up to 40% of existing estate agencies closed throughout 2007
February 6, 2008 More than thirty thousand estate agencies closed their doors last year as a result of the property slowdown Spain has been experiencing since last summer. According to COAPI (Spain’s official property agents association), closures were most noticeable in coastal areas targeted by overseas property buyers. A spokesman for COAPI expressed the opinion that these closures represent a return to normalcy: “What wasn’t normal was the lack of people ready to sell and the lines of people waiting to buy.” This booming market was responsible for the proliferation of estate agencies without coherent business plans, out simply for profits – the disappearance of these upstart profit ventures actually represents a healthy filtering of undesirable businesses from the market. COAPI also found that homebuyers today pay fewer physical visits to agency offices and increasingly use the Internet to look for a home; up to 60% of completed property transactions were initiated with an online search.
Less Mortgages Given Due To Real Estate Slowdown
January 30, 2008 The slowdown in Spain’s real estate market is making its mark on the mortgage market with decreases in its main indexes. According to recent figures for November 2007 from the INE (National Statistics Institute), the capital lent to purchase a home in Spain has decreased by 13.3% compared to the same period in 2006. The total number of mortgaged homes during this period also fell, with a decrease of 15%. These numbers provide further confirmation that Spain’s property market is moving at a slower pace and has completed the strong real estate boom it experienced since 1997.
Official 2007 Property Prices Released
January 25, 2008 The Spanish government’s Ministerio de Vivienda (housing department) released this week the official figures for property prices over 2007. While prices increased overall by 4.8%, this increase constituted the smallest one since 1997. More surprisingly was the fact that prices actually fell in 11 of Spain’s 50 provinces, although this occurred in areas not typically frequented by overseas property buyers. Murcia was the region where prices rose the most, with an increase of 8.1%. Other coastal regions also rose above the national average, making investment from foreign property buyers an important factor in the health of Spain’s property market throughout 2007.
Spanish Real Estate Companies Look Abroad
January 14, 2008 Only four years ago, few Spanish real estate companies were venturing abroad to explore foreign markets; the local residential property market was strong enough to fulfil any expectations. But much has changed in little time. Diversification is now the best way to combat the current hardships of the market. Spanish companies are moving into foreign markets as a way of softening the transition to a slower-moving market. Developing countries such as those of the old Soviet Union will continue to constitute the area of greatest interest for Spanish real estate companies. On the other side of the Atlantic, México and Brasil stand out with powerful real estate markets ripe with opportunities – these countries are also becoming interesting to Spanish companies from an investment point of view.
Spaniards Promised Money to Make their Homes Greener
December 11th, 2007 The Spanish government is planning to bring in a policy to give home owners the opportunity to make their homes environmentally-friendly by giving out grants. The prime minister, Jose Luis Rodriguez Zapatero is eager to push the green issue through before the general elections in March. Zapatero has insisted the government would give 1 billion Euros in direct subsidies to renovate old homes from 2008 – 2012, which is 200 euros more than his first suggestion. There is also another 2 billion euros in credit annually to assist Spanish residents in making there home between 25 and 60 percent more energy efficient. It will also boost the value of homes as energy bills would be cut. Zapatero insists the money will be sufficient to renovate 500,000 homes. And it is not only homes, public buildings such as schools have also been told they will receive 200 million euros to improve there energy efficiency.
Spanish Government Smartens Up the Property Sector
December 3rd, 2007 The Spanish Government has launched more than 100 investigations on the issue of corruption in real estate. The civil guard has arrested 57 people and charged 126 others. These investigations seem to circle public officials and developers only six months after special police units were erected to challenge this corruption in the property market. These officials who accepted bribes from construction companies, in order to break building permits and zoning laws allowed companies to build on protected areas such as beaches. The investigations are challenging an enormous volume of corruption that starting when Spain was experiencing a 10 year property boom, which occurred predominantly in Andalusia, where foreign buyers were victims of many building scams. The Spanish government has started clearing the costs of illegal buildings and the Ministry of the Environment has demolished around 660 homes and hotels that were built too close to the shoreline. The aim is to stop government officials accepting bribes in the future and making Spain a safer place in which to invest.
A Work of Art for Madrid’s Civil Courts
November 26th, 2007 “Transparency” and “democracy” are the values meant to be transmitted by the new courthouse of Madrid’s Civil Justice Campus. The building, designed by the Iraqi architectural firm Zaha Hadid, will hold 118 courtrooms and will be the largest judicial complex in the world. The design of the courthouse will also include projects by renowned architects such as Norman Foster.
“By my heel I care not” – Spain holds its chin up in the face of the Eurostar
November 20th, 2007 Eurostar has done it again; impressed us even more with a faster train. It now only takes an astonishing 20 minutes to get from central London to the city of Lille in northern France. It is likely to mean an improvement to France’s tourist industry and perhaps an increase in people wanting to buy a property there. However the question has been raised whether this high speed train will have a bad effect on the Spanish property market? Experts believe that despite all the hype, Spain’s property market still remains one of the most affluent in Europe. Property companies such as Propertyabroad.com believe Spain attracts a “very different market” than France, making the Eurostar a very minor variable in the percentage of future foreigners purchasing Property in Spain.
Spain’s 2010 World Expo Pavilion a Giant Basket
November 14th, 2007 Spain was the fourth country – after the UK, Switzerland and Luxembourg – to unveil the design for its pavilion at the 2010 World Expo in Shanghai as it signed a contract with event organizers earlier this week. The design will emulate a giant wicker basket. Various patterns made out of wicker will be hand-weaved and applied to a steel frame, then protected with a waterproof seal. 8,500 square meters of floor space will allow for exhibition areas, cafeteria space and areas devoted to live cultural performances, and will include both open and covered areas. The design was selected to highlight Spain and China’s shared tradition in wicker-weaving. A total of 1.8 million euros will be invested in the construction of the pavilion.
Spain’s Property Slowdown Will Increase Quality
November 5th, 2007 The slowdown in Spain’s residential property market will have a positive impact on the relationship between quality and price for homes in Spain, according to a market study by CB Richard Ellis and Barcelona Meeting Point. The ratio between quality and price of residential properties in Spain at this point is one of the lowest in Europe, and with current market conditions is expected to rise to normal levels. Richard Ellis says this doesn’t indicate a “sector catastrophe.” Rather, property prices will be adjusted in manageable steps as long as appropriate measures are taken to “transmit confidence to the final buyer.”
Spain Attracts ‘Elite Tourism’ From India
October 29th, 2007 Spain has engaged in an intense campaign to promote itself as an elite tourist destination in India. According to the director of Spain’s tourism office, this Asian country represents a new and rapidly growing market whose economy has grown by 20 percent between 2004 and 2007. Among other initiatives, including press releases, live cultural events and seminars, there will be a November supplemental issue about Spain in the travel magazine “Travel and Leisure South Asia.” Enrique Ruiz, the director of Turespaña, affirms that so far the reaction in India has been “fantastic.”
Spain Still Wants Gibraltar Back
October 22nd, 2007 In a book published by the Spanish Foreign Ministry, La Cuestión de Gibraltar, Spain has officially reiterated its claim to sovereignty over Gibraltar. On another front, the Spanish ambassador to the UN presented his case to the global organism’s Special Committee on Decolonization for Spanish re-possession of Gibraltar, which has been occupied by the UK since 1704. While Spain has made progress towards gaining added control of Gibraltar – as evidenced by the Cordoba agreement, which resulted in shared access to the disputed territory’s airport – Gibraltar itself sees self-determination as the only solution to the colonization issue.
How Retirement Dreams Can Turn Into Nightmares
October 18th, 2007 There is a growing concern in the number of British people retiring to Spain who are encountering financial strain. More and more people are retiring to the sun-nourished country, due to a heavy load of advertisements and television programmes. However, as easy as it may look, there is an increasing problem with people enduring financial suffering. Experts say these problems are simply a cause of bad financial planning. The human life-span has increased and in these critical years several people have not made any provisions for their future healthcare and the majority of these people end up struggling. The common problems are bad judgements which include property investments and inexact budgeting of pensions. Though living in Spain is till cheaper than the UK, prices have gone up dramatically and the economic difference between the UK and Spain is tightening. People are being advised to prepare for old age and calculate their finances and future options professionally before making the big move.
The Pause in the Spanish Property Boom Might Affect Portugal!
October 10th, 2007 During the 10 year property boom in Spain, Portugal has also been taken a long for the ride. The ride however has halted and once you get on, you cannot just get off! A large proportion of the Portuguese property market is economically dependent on its bigger neighbour, Spain. The economists analyzed the boom as a growth, fuelled only by an excessive expansion of the Spanish property market. This was always seen as unrealistic and rickety. The doubling of prices has left Spanish consumer dept at 100 per cent of a disposable income, while Portugal is at a staggering 112 per cent. Now that the increase rates have slowed down in Spain and shares have fallen, Portugal could also suffer, due to one third of its export growth rate (the main driving engine to recuperation) relying on Spain.
The Town of Muro de Alcoy is top of the charts for foreign investors
October 1st, 2007 Based in the Alicante region, the town of Muro de Alcoy is 30km from Benidorm on Spain's south-eastern coast. It was voted as the most popular area in Spain to buy a house in an online research by property experts Kyero.com. There are many factors contributing to this, primarily, the fine weather of the region and the fact that it is close to Alicante International Airport are crucial to its success. House prices in this town have increased to 22 per cent in the past 12 months and these days prices are close to the national average of €247,000. The costal town of Adra, in Almeria, came in at second most popular. It has warm weather all year-round and low property prices at a stunning 43 per cent lower than the national average. Also the town is less than one hour’s car ride to the airport. Evidently the vital variable on whether an area was popular seemed not to be so much the weather but keeping the distance to the airport at less than an hour.
Now the Buyers Have the Upper Hand in the Spanish Market
September 24th, 2007 The slow down in Spanish real estate has twisted the markets authority from a sellers market to a buyers market, this can prove positive for those whishing to buy a Spanish property in the near future. A buyers market is defined by a situation where there is an oversupply of all properties (both new and second-hand homes) in the market. There have been more than 600,000 new properties constructed per year during the last decade. The interest rates have risen and there have been less professional investors buying property and therefore the demand has decreased. This is why the buyers now have the dominance over the market, because there is too much supply and not enough demand. Property prices will fall and buyers can invest at a cheaper price and the sellers will make less money from their properties. There are other positive factors for the long-term buyer: There are more properties to choose from, the promoters will focus more on quality and bonuses to ensure a sale and the buyer is in a better position to negotiate the price and the conditions of the sale, i.e. the contract. Also experts agree that there will not be a crash in the Spanish real estate market, at most just an adjustment in prices and mainly in areas with a clear oversupply of new properties. In the long run the prices will increase, which could mean that buyers who purchase now could make a substantial profit, if they were to sell in the distant future. This great situation will not last for long as property developers have already started to slow down their production and building licenses have decrease this year. All in all this is a great time to purchase a property.
Sitting on a gold mine
September 10th, 2007 September 10th 2007. Continually there are on goings stories about Spanish property prices going down, however, there is one village that seems to have struck it rich. Irish mining firm Ormonde Mining PLC have discovered high-grade gold deposites in the village of Pino del Oro, which justly means "Golden Pine". The village Mayor, Jesús Ángel Antón, heard the news, but while thrilled about the job prospects for the villagers, he remained composed. "We've also known there could be gold here," he said, "the name of the village" – Golden Pine in English – "points to that. I've even witnessed some of the finds, but they've always been in very small quantities." Set in the region of Castilla y Leon, near the Portuguese boarder, this region attracts few international property buyers. It appeals to people who wish to immerse themselves within the Spanish community, or who prefer a rural place off the beaten track rather than the bustling touristy southern coasts full of international buyers. Buying a rural property in Pino del Orno could have cost less then 50,000 Euros. This, conversely, could all change dramatically and prices in the near future may sore sky high as the locals realise that their houses are infested with gold.
Alicante Gets a Ryanair Base, New Routes
August 13th, 2007 Low-cost airline company Ryaniar will make Alicante its 21st base, adding 11 new routes to the six already serviced from the city. The new routes will be available beginning in November. The company will invest 100 million euros in the project and create employment for 1,500 workers in Alicante. Ryanair also expects the new base to triple the number of passengers traveling to and from Alicante to 1.5 million per year. Some of the new routes will include Brussels, Milan and Paris; cities like Dublin, Dusseldorf, Liverpool and London are already serviced by Ryanair. By the time the project is completed there will be a total of 17 routes serviced from Alicante.
Walls Made from Water
July 30th, 2007 Next year’s World Expo in Zaragoza (June 14th – September 14th, 2008) will host a particularly interesting attraction: a building with walls made from water. Millions of fairgoers will be entertained by this unique sight, achieved through thousands of computer-controlled water jets that can be manipulated to create doors or windows at any point along the building’s walls. The building will also have the capacity to disappear in minutes by lowering its roof all the way to the floor, essentially becoming an ordinary fountain. Digitally projected text and images will be displayed along the water-walls of this 5,400 square-foot building, which was thought up by architects at the Massachusetts Institute of Technology and will cost around 3 million dollars to build.
Still No Crash in Sight for Spain’s Settling Property Market
July 23rd, 2007 Last year, property prices rose by nearly 6%, the lowest rise since 1998 and a definite sign that the market is settling and the second massive real estate boom in Spain’s recent history is coming to an end. Settling yes, crashing – no, is the prediction of industry specialists who claim price increases will slow until reaching a similar level as the country’s inflation rate. Prices have been rising the most in the Balearic Islands, Murcia and Ceuta y Melilla, as well as around the Costa Verde, and least in Navarra.
Spain and France Top Tourist Destinations in the World
July 17th, 2007 The UN World Tourism Organization has pronounced France and Spain the top tourist destinations in the world, according to data gathered from its 2006 study. France holds the top spot, with nearly 80 million visits per year; while Spain hosts almost 60 million happy tourists each year. Spain took its place as the second-most visited location on the planet in 2004, overtaking the United States, which nowadays still occupies the third spot. After that goes China, Italy, the United Kingdom, Germany, Mexico, Austria and Russia. The increase in tourism (which grew by 6% worldwide) will bring more jobs and exports, said the World Tourism Organization, a growth they hoped would handled responsibly by the highest ranking countries. In particular the UN organization believes there should be a reduction of gas emission in the tourist industry.
Spain Gets Green to Fight Gases
July 9th, 2007 Spain is beginning to react to its growing problem of greenhouse gas emission. Madrid and several other regional governments within the country will plant millions of trees to offset pollution. Since 1990, when the Kyoto agreement was signed by most developed nations to regulate global warming, Spain’s emissions have grown by almost 50%. In Castilla-La Mancha, the local government claims to have increased its forested area by around 7 million acres, and plans to plant an additional 20 million trees in the next four years. Madrid has combated its mad traffic by creating numerous parks and green spaces (it claims to be one of the cities in the world with the most parks), and plans to create even more green spaces via vertical gardens that will hang from the sides of buildings.
July 2nd, 2007 The Costa del Sol may soon have its very own TV Channel transmitting 16 hours per day. The new channel will be aired on the Sky Digital network to the UK and Ireland. According to property expert Iain Maitand, Living in Spain TV is a local community channel depicting life in Spain as it really is with real life stories of expats who have relocated in Spain. “It will provide a voice for the expat community and will make essential viewing for anyone planning to move there.” Expats have a big presence in the Costas and there are many web forums with great practical advice for those planning a move.
Watchdog Warns Buyers: Check, then Check Again
June 28th, 2007 A European estate agents' watchdog is warning home buyers in Spain to check that their property has planning permission before they buy. The warning follows an investigation by the European Estate Agents Union (EEAU) into several companies working in the Albox region of Spain. The EEAU has expressed concerns that many buyers are rushing into property purchases without checking that the building is legal. The EEAU has been contacted by a number of home-owners who have bought properties in areas like Almeria and Almanzora, only to find out they do not have planning permission. Andy Marchant, co-founder of the EEAU, said: "Spanish property law is complex and you need a good independent solicitor working for you."
Banco Santander to Enact Biggest Property Transaction in Spain’s History
June 18th, 2007 Banco Santander Central Hispano announced last week its plan to sell off all of its real estate assets in Spain, excluding their headquarters in Santander. A total of 44 buildings and 1,200 branch offices will be sold in what will be the largest property transaction in Spain’s history; the Spanish bank expects to profit from it by around 1.5 billion euros. After the sale, Santander will lease back its holdings. The money raised from the sale will help finance the planned joint purchase of Dutch bank ABM Amro, which the bank is currently bidding for together with Royal Bank of Scotland. However spokesmen of Santander have claimed that their holdings will be sold whether or not the Dutch bank is successfully purchased. This large property transaction comes at a time when many professionals are expecting a change in Spain’s real estate industry. Consensus has it that the property market is at its peak, and the most positive scenario at this point is one of a moderate downturn in prices. The sale also points to a wider trend in the business world of large companies selling off their real estate, such as was the case in 2000 when UK mortgage lender Abbey (which was later purchased by Santander in 2004) sold its holdings. More recently, Barclays Bank sold its Spanish headquarters and Argentinian-Spanish oil company Repsol is in the process of doing the same with its central offices in Madrid.
Spain Top for First Time Brits
June 11th, 2007 A quarter of young people in the UK are considering buying property abroad in an attempt to get on to the UK property ladder, new research has revealed. A National Savings & Investments (NS&I) survey found that 27 per cent of prospective first-time buyers would seriously consider buying overseas to help themselves on to the first rung of the property ladder. First time buyers are being priced out of the market in the UK where property prices are notoriously high. Out of all the potential destinations in which to buy property, Spain proved to be the most popular, with 43 per cent of prospective buyers considering the country to be the most attractive option. Australia and New Zealand were the next most popular, with the USA in third place.
Healthy Returns from Spanish Homes
June 4th, 2007 Spain's property market is second only to that of Florida in terms of performance according to property experts Inside Track. Spokesperson Pierre Williams said that the Mediterranean country averages a 48.74 per cent investment return, which is ten per cent more than the UK property market. He said: "Spain's naturally an attractive market, and has been because it's been a holiday destination for the British for so long." Spain has seen a boost in young buyers, priced out of the UK housing market, while the country continues to be a popular choice with retirees. Mr Williams said that despite softening in property markets in much of western Europe, Spain was still performing well. Experts have predicted that the trend for growth in inland markets will continue in the future, taking over from the popular coastal destinations like the Costa Del Sol.
Spanish Property Market Matured Nicely
May 30th, 2007 The Spanish property market has matured and is now more stable than in previous years, one industry expert has claimed. Overseas property director of BuyAssociation Paul Collins said that although the rampant speculation that went on in Spain a couple of years ago had calmed, it had left a mature market that is more stable than in previous years. The Spanish property market has been compare to that of France, where prices are still rising but the market is stable. “People buying in France are those who want to own or live in France rather than those out to make a fast buck", said Mr Collins. Recent research from self-catering-breaks.com found that Spain was a popular destination for Brits considering investing in property as part of their pension. Mr Collins said that overseas property could be a "great part of a retirement plan" but, he added that it would be risky to rely entirely on overseas property to fund retirement.
The 2007 SpainREi.com Property Awards Commend Outstanding Spanish Property Sites
May 22nd, 2007 For the first year ever, SpainREi.com, the impartial Spanish property portal, has prized a select number of sites devoted to buying property in Spain with its newly created e-award. Based on the submissions left by visitors to the SpainREi.com award section and further independent research, a team of industry professionals selected sites based on the following criteria: exceptional web content, quality design, intuitive navigation features, competitive offers and quality, personalized customer support. In particular, investigators tried to determine whether each site evaluated met the standards listed below: Quality Content Providing site visitors with unique web content in the form of informative guides, industry news and other useful features that are accurate, clearly written and relevant to the topic at hand. Professional Design Presenting a professional design that enhances the user’s experience on the site without detracting from functionality and ease of navigation. Intuitive Navigation Making it easy for visitors to find information of interest, search for properties, contact site owners and navigate through the site in general. Competitive Offers Offering competitively priced properties and related services that surpass the industry standard. Personalized Customer Care Providing users with quality after-sales services in a professional and timely manner. Other factors were also taken into consideration, such as availability of information in multiple languages, FAQ sections, live online help and regularly updated information. After much evaluation, the sites selected to receive the 2007 e-award can finally be found in the 2007 awards section of SpainREi.com. The winners will be listed under their respective categories, providing SpainREi.com visitors with an excellent resource for gathering information on the Spanish real estate sector. Some of the categories include: best customer service, best content, best design, most innovative site, best site for information on mortgages and best site for legal advice. By launching its property e-award, SpainREi.com also hopes to both reward quality property websites and to create an incentive for market-related sites to achieve a high standard of professionalism.
No Need to Borrow for Brit Retirees
May 10th, 2007 Many people who plan to purchase a retirement property abroad may be able to do so without needing a mortgage, according to a new report. The new data, published by online mortgage company mform.co.uk showed nearly half of those aged over 50 looking to buy abroad, say they will not need a mortgage to buy their new home. "Rising property prices [have] meant that many people have become well-off and a number are cashing in on this by purchasing cheaper properties and releasing equity," said Eamonn Rice, chief executive of mform. "Anyone who bought a house in the 1980s is certain to have seen massive growth in the value of their home and may now be in a position to cash in and move to a smaller house or relocate to a cheaper area." Bargain property prices in popular retirement locations like Spain allow Brit retirees to sell up and invest abroad, often with cash left over.
MyAir Announces Increase in Flights
May 3rd, 2007 MyAir, one of the leading domestic low-cost airlines expects to see the number of passengers double this year as a result of the increase in the number of flights to Italy and the introduction of flights from Bucharest to Spain and France, according to MyAir representative Antonio Iervolino. Increased budget flight routes bring more holiday makers and are good news for buy-to-let investors. The introduction of the new routes has tightened competition between the airlines operating domestically, as they are offering several low price alternatives to the same destinations. The number of low-cost airline operators is rising domestically. Aswell as the already present companies, Germanwings is to enter the market on March 25, by introducing a Bucharest-Kohl route, whilst Spanish airline company Click Air will launch flights to and from Romania starting in May.
Spain Beats Bulgaria in Property Battle
April 25th, 2007 In the wake of a huge media fenzy over the rising Bulgarian property market, Spain and France still top the charts in property popularity. Bulgaria is the third-biggest overseas property market for UK buyers, the Association of International Property Professionals (AIPP) has revealed. The first annual report on British overseas property investment from the AIPP has placed Spain and France in the top two spots, taking 50.5 per cent of the market share in 2006 (31.6 per cent and 18.9 per cent respectively). However, the figures show that Bulgaria has slipped into third place, attracting 7.7 per cent of British overseas property purchases. The popularity of the top two is attributed to the steady markets and sound returns on investments that property sales attract.
Brits warned: “Get Your NIE before you Buy”
April 19th, 2007 Brits planning to buy property in Spain have been warned about the importance of applying for their Numero de Identificacion de Extranjero (NIE) well in advance of making the move. The Spanish lending arm of Halifax, Banco Halifax Hispania has said that changes to Spanish law now mean that all foreigners buying property in Spain must now obtain their NIE number, before completing a purchase. The number is required not only to buy a property but for a range of other things, including setting up utility connections, applying for a Spanish driving licence or to apply for a business permit, the bank said. It can take between 2 and 6 weeks for an NIE to be processed, so it is essential to apply well in advance, the bank advised. Ian Smith, head of European operations at Halifax, said: "it is important to plan well in advance for your purchase. You need to get your NIE as soon as possible, as any hold-ups later down the line may mean that you miss out on your dream home."
House Price Hike for Spain
March 31st, 2007 Spain’s national average property price increased by 3,000 euros between February and March, moving up from 241,000 euros to 244,000 euros, the property website Kyero has reported. The average property price in Lugo province, located in north western Spain, part of the autonomous community of Galicia, was 261,000 euro, 7 per cent above the national average. Average price in Valencia province was reported to have fallen by 2,000 euros to 210,000, 14 per cent below the national average. Lanzarote retained its position as the most expensive of the Canary Islands with an average price of 265,000 euro, 9 per cent above the national average.
Spain Outstrips States in Property Popularity
March 20th, 2007 Spain has remained at the top of the table for property investment despite ever increasing foreign interest in Australian and American hotspots. For Brits, proximity is the pulling power in countries like Spain and France, and statistics have shown that far-flung locations are still lagging in the foreign property stakes. While the US or New Zealand appeal to Brits because of the shared language, a recent HiFX survey, has revealed that while France takes poll position with Brit buyers, Spain is close at its heels. Chris Howard, managing director of 4:Property explains; "France tends to attract more well heeled investors looking for rural locations, while Spain usually appeals to baby-boomers looking for an apartment on the coast. However, demand will continue in these areas because they are close to the UK and are well-known to buyers." One obvious advantage of investing in property in Spain and France is that those who rent from buy-to-let investors may do so while splitting time between the continent and the UK without having a long-haul flight to get home.
New Year New Rules
March 13th, 2007 From 1st January 2007, foreigners buying in Spain are required to have an NIE (the financial identification number you need if you are a foreigner) in place within 30 days of completion, or face a fine of 5 per cent of the sum due. For example, on a EUR500,000 purchase, tax of EUR35,000 is due. If this is not paid, there will be an automatic fine of EUR1,750. As it can sometimes take longer than 40 days to sort out an NIE number, the best advice is to get on to this well before you get to the stage of needing it. Another change to buying property in Spain that came in on 1st January is that the notary will require a copy of a bank draft or other document showing where the money comes from to make the purchase of a property. The change has been made to bring the Spanish Property market into line with EU money laundering and tax evasion rulings. For Brit buyers, copies of these documents may go back to HMRC in the United Kingdom.
Spain Susceptible To Possible Real Estate Crash
February 27th, 2007 Spain is one of only two countries of the European Union, along with Ireland, that could suffer from a real estate crash. This, at least, is the conclusion of a study made by the U.S. company American Express Fund. According to the study, the real estate booms that have taken place in Spain and Ireland are similar to the one experienced by the U.S. from 2003 to 2005, which resulted in an economic recession throughout last year. The fact that the Spanish and Irish real estate markets are the two strongest in Europe is the very factor that makes both of these economies susceptible to changes in home loan interest rates, which could potentially destabilize their markets. Although a potential shadow looms over the economies of Spain and Ireland, these countries represent only a small part of the European Union, and other factors exist that would limit the vulnerability of other member states against a possible real estate crash. In particular, the study points out the case of the emerging German economy as one of the most important compensating factors of this post-boom process.
Foreigners Soften Decrease in Spanish Property Investment
February 19th, 2007 According to figures from Banco de España, investment in Spanish real estate reached 4.4 billion euros up until November of 2006; a figure that supposes a 13 percent decrease from the 5 billion euros that were invested within the same period last year. On the other hand, Spanish investment in foreign real estate has doubled with respect to last year, rising from 1.1 billion in 2005 to 2 billion in 2006. In November, non-residents invested 375 million euros in Spanish real estate. This number has fallen by 16 percent monthly, and by 24 percent with respect to last year's figures. In comparison, the investment of Spanish companies in foreign real estate in November reached 217 million euros; an increase of 106 percent when compared to figures collected in November of 2005. One of the reasons for the decreased investment in Spanish real estate by foreigners is the rising cost of properties, especially in the country's coveted coasts (where prices rose by 9 percent in 2006). However, the APCE (Spain's association of promoters and constructors) expects the market to recover slowly but surely throughout 2007, a year in which 4.8 billion euros are expected to be invested. This would decelerate the decrease with respect to 2006 to 12 percent.
Tax Breaks for Foreign Homeowners
January 4th, 2007 A new law effective January 1st will equalize the capital gains tax for all homeowners in Spain, from native citizens to foreigners who live part-time or own holiday homes in Spain. The 18 percent tax that was previously applied only to Spanish residents is now the universal rate; previously, foreigners were forced to pay a significantly elevated 35 percent capital gains tax. The change comes after a European court ruling that the double taxing system is unfair to non-residents who own homes in Spain. Another piece of good news for foreigners in the Spanish real estate market is the probable reduction of a 5 percent retention on the price of a home when a non-resident sells to a resident. A new retention of 3 percent has been proposed, and is designed to help a purchaser pay for costs in the event that it becomes difficult to collect taxes from a seller who's already left the country. The retention would be compensated by subtracting it from the capital gains tax.
Confidence Boost for Home Buyers
December 13th 2006 New government rulings to tackle real estate corruption are set to offer home buyers a new found confidence in the Spanish property market, with the potential of driving renewed investment in 2007. New details have emerged from the government’s plans which include requirements for all real estate projects to be passed by a full council sitting at a public meeting. In light of the arrests of a number of government officials linked to real estate crimes earlier this year, the government will rule that mayors and councillors will not be able to join private companies for two years after leaving office, if those companies are in any way related to their previous policy areas. The measures, which are set to become law in the next few months, will pave the way to eradicating the immoral practices of back-handing and bribery that have led to millions of home buyers facing the prospect of losing their homes after unwittingly purchasing illegal properties.
Manhattan Plan Approved in Valencia
November 6th 2006 The Manhattan Plan, a property development consisting of 33 buildings of up to 25 stories that will be built on 610,000 square meters of land, was approved recently by the local government in Valencia. Despite political opposition from the PSOE, the plan was voted in thanks to the influence of the Partido Popular and the Union Valenciana. The plan has been criticized as unrealistic and many still think it shouldn't be built unless issues of adequate water sources and parking space are solved. A number of government studies suggest that such a large community might not be able to be sustained given the dry spell that the country has been experiencing the last few years. 5,000 homes and a 40-story hotel are among the developments planned for the Valencian municipality of Cullera.
Home from Home for Expat Shoppers
November 1st 2006 Murcia has been constantly tipped as a hotspot over recent months, and recent large scale investment confirms that the region is on the up. The UK's second-biggest real estate investment trust, British Land will announce the purchase of Nueva Condomina this week. The €350m (£237m) shopping centre in Murcia, Spain is one of the biggest out-of-town shopping centres in Spain, roughly the size of the Lakeside centre in the UK. Chief Excutive of British Land Steven Hester said explained that one of the anchors of the new centre is Primark; “retailing is going across borders so, to some extent, we are following our clients."
Spain in Pole Position
October 26th 2006 Foreign property investment used to be something most Poles could only dream of, but since Poland's ascension to the EU and a period of economic prosperity, buying abroad is becoming a reality for new home buyers. Spain is a favourite destination for Poles, who now look on foreign properties, both as holiday homes and investment vehicles. In the early 90s only the country's wealthiest citizens could afford a far-flung home or real-estate investment and most of those transactions were kept secret. But now, Spanish apartments are undercutting Warsaw prices according to Piotr Cicharski, of Polish estate agecncy Carisma. "The increase in market demand can be seen, as the price level on the Spanish real-estate market does not shock Polish customers anymore," says Maria Hahn, research and marketing co-ordinator of the residential department at CB Richard Ellis Polska. "Now, even Poland's middle-class citizens can consider investing in a Spanish apartment." Hahn explains that the main advantage of the Spanish market is its predictability and stability. "The investment is safe and will grow evenly," she says. "Prices grow from one year to another, which is unlike in Poland where prices jump from month to month."
Barcelona: TopTourist Hotspot
October 25th 2006 More tourists rented a holiday home in Barcelona during the past summer than in any other location, according to new research. The city proved to be a favourite among those visiting Holiday-Rentals.co.uk this year, according to the website, with Dubai, Italy and the Canary Islands following close behind, highlighting a trend towards "cultural tourism". Rather than flocking to the beach, tourists seemed to prefer taking in foreign culture, explains Ross McGowan, sales director for Holiday-rentals.co.uk. "The fact that Barcelona, Venice and Rome have continued to be popular with renters throughout the summer reinforces the fact that today's travellers are looking for a more holistic holiday experience and more than just sun, sea and sand," he comments. "The appearance of the Canaries in our top five illustrates that traditional destinations continue to perform strongly too, both in terms of traveller demand and investment," he continued. (Source: just the flight.co.uk)
Window Shoppers Dream On
October 23rd 2006 British holidaymakers have spent almost 22 million hours over the past two summers gazing into foreign estate agent windows in search of the perfect property, according to new research released today. The 'Holiday Habits' study, commissioned by property investment specialists, The Inside Track Group revealed that 45% of UK holidaymakers spend an average of one hour and 25 minutes each browsing local listings for houses and apartments for sale. According to the survey, the top five holiday destinations for Britsh tourists are: Spain (30%) France (18%) Greece (7%) USA (5%) and Italy (5%).
End of the Road for Rise in Spanish Property Prices?
October 21st 2006 High property prices and the increasing rate of construction in the coastal areas of Alicante, Almeria and Malaga have produced an excess in supply that acts as a braking mechanism to price increases and sales of new homes in these regions. In Spain's major cities, second-hand property prices also show signs of slowing down. From July to September, growth was registered at less than 1% in Madrid and Barcelona (0.7% and 0.6%, respectively), while in Valencia there was a decrease of 0.1%. After ten years of nonstop growth, Spain's property boom seems to have reached its peak with 820,107 homes built in one year. Spain has never before seen such a period of construction, according to the Spanish newspaper El Pais. Now the property sector faces the challenge of selling a large number of homes, something that will be made more difficult by the fact that buyers who can afford taking on mortgages have already purchased their own homes. The most relevant source of demand now is that of young adults, and if market conditions remain unaltered both parties will be affected negatively: promoters won't be able to sell their properties and young people won't be able to purchase a home. Fortunately, young British buyers may provide the necessary support to the property market in Spain. A large and growing number of Brits under 30 are deciding to make their first property investment in Spain due to the prohibitive cost of doing so in the UK. This trend seems to be catching on with enough force to help cushion the leveling out of property prices in Spain.
Zero Tolerance On Real Estate Corruption
October 20th 2006 The Deputy Prime Minister, María Teresa Fernández de la Vega announced on Friday that the Government has a policy of zero tolerance against real estate corruption, calling for the cooperation of autonomous regions and local town halls in the matter. Central government has taken measures to crack down on corruption in recent months, creating a force of real estate prosecutors and teams of civil hard agents. But what still needs to be made clear is what happens to the homes already built irregularly, where in many cases they now also represent the life savings of their occupiers, who generally have purchased in good faith. Website Typically Spanish pointed to the Chiclana housing amnesty as a possible solution for town halls across the country.
Housing Amnesty for Chiclana
October 20th 2006 After years of conflict over illegally built properties in Chiclana de la Frontera (Cadiz province) the local PSOE Town Hall has taken the step of offering an amnesty to all the homes, across the municipality. The amnesty will be certified in the new PGOU urban plan for the town, and the town hall has reached an agreement with the Unicaja bank to offer low interest loans so owners can face the cost of getting their papers and plans ratified, and with the Endesa power company so that legal connections can be assured. Town halls across the country are considering what to do with the revelation that many homes in their area have been built illegally, and the Chiclana case may set a precedent for other high profile cases such as Catral and Marbella.
Valencia Criticized for Unfair Play
October 17th 2006 The European Commission has given Spain a final notice to change controversial urban laws in Valencia that infringe on community rights. The local government in Valencia has two months to adapt the law as specified by Brussels before the case is taken on by the European Court of Justice. The law in question – approved in December of 2006 – is criticized for allowing city planners to contract public projects out to hand-picked private companies. This process of internal bidding has been attacked, and demands made to publicly announce bids as well as to change the criteria for the awarding of contracts. The Generalitat (Valencia's local government) has responded to the EC by defending the law as fair, a stance it's willing to maintain before the Court of Justice.
Civil Guard Combats Corruption
October 15th 2006 The Civil Guard has announced plans to set up a new task force to combat real estate corruption, town planning crimes and illegal building in Spain. The new force of 200 agents will start its work in Madrid, Málaga and Murcia. General Director of the Civil Guard and National Police, Joan Mesquida, told El Pais newspaper that society has demanded that serious measures be taken following the controversial 'Malaya case' where the local council of Marbella was disbanded in connection with real estate corruption. A circular was sent to all Civil Guard barracks across the country last July ordering them to report any irregular building seen in their local areas, with the idea being to first draw up a complete list of all illegal buildings constructed in Spain over the past three years.
Murcia Cleans Up its Act
October 14th 2006 The Murcia government has estimated that wind and solar power will produce a third of the region's electricity supply in six years' time. The Director General of the department of industry, expects the level of wind power currently generated in the Region to increase significantly by 2012. The solar panel installations which are awaiting approval would produce a total of 300 megawatts: enough to supply a city the size of Murcia for one year. The U.N. climate treaty's Kyoto Protocol, negotiated in Japan in 1997 and effective as of last year, calls for an average 5 percent drop in greenhouse emissions by 2012 from the base year 1990. Many countries are struggling to meet these targets. In Europe, Spain was rated as the worst performer, releasing 19.7 million tons of greenhouse gases more in 2004 than the year before. Part of the increase was attributed to a switch to fossil fuels to make up for a shortfall in hydro power caused by drought.
Jet2 Scoops Shorthaul Award
October 13th 2006 British based airline carrier Jet2 has bagged the award for "Best European Short-Haul Airline’, at the Travel Awards 2006 held in South Africa this week. The low cost airline based in Yorkshire was praised for its exemplary service and low cost fares by its passengers. The airline, which flies to 38 destinations across Europe fought off fierce competition from the likes of BA, Lufthansa, Air France/KLM and other low cost carriers, to scoop the prestigious prize. The annual awards, sponsored by the Guardian and Observer newspapers singled out Jet2 as the pick of the bunch following extensive research into customer satisfaction. Philip Meeson, boss of Jet2 was thrilled at the news. “In winning, we have fought off every European flag carrier and so called ‘low cost’ airline across the continent – an accolade indeed and confirmation Jet2.com can deliver the lowest fares and highest level of service" he said.
Brit Buyers Set Sights on Spain
October 12th 2006 Nearly one sixth of the UK population intends to relocate abroad due to dissatisfaction with life at home. A survey by Natwest International revealed that a staggering 72% of "baby boomers" now aged 30 to 50 years plan to move overseas in search of better quality of life and financial gain. Work stress and exorbitant house prices were the most popular motivational factors for leaving the UK. Half of the buyers questioned continue to set their sights on Spain, attracted by its historically solid returns on investment, as well as the Mediterranean climate, rich culture and holiday lifestyle. For many investors, property purchase abroad is now not only representing an opportunity for a changed lifestyle, but a better investment for the future.
House Prices Rise in Valencia
October 11th 2006 New homes in Valencia this year are selling at a faster pace than in cities like Madrid or Barcelona, according to a study published by property consultants Aguirre Newmann. The average price of apartments has risen by 10 to 12 percent and in Valencia capital the threshold of 3,000 euros per square meter has been surpassed for the first time. According to the study, a new home in Valencia takes around 15 months to be sold. In Madrid and Barcelona that period rises to 23 and 19 months, accordingly. The rhythm of sales in the center of Valencia capital is even faster, with average sale periods of one year. 86% of the properties on sale are concentrated in the western end of the city and in the area around the Ademuz highway.
Eurozone Interest Rates Rise Again
October 6th 2006 The euro weakened on Thursday after the European Central Bank raised interest rates in the Eurozone by 25 basis points to 3.25 per cent. The president of the ECB also made comments after the Bank’s meeting that indicated another rate hike is coming before the end of the year. The rise is the fifth this year and the latest quarter of a percentage point rise means an extra €15 a month for home owners for every €1,000 borrowed. The Spanish Property market has experienced a slowdown in recent months, but growth rate is still sitting at an impressive 10.8 per cent. This compares to an approximate 6.5 per cent in the UK and, according to Eye On Spain, probably explains why so many UK property investors are buying abroad. Latest figures from the Economist reveal that Spain is just behind Denmark, Belgium and Ireland in terms of property price growth.
End of Boom but Still No Crash
October 5th 2006 The Spanish real estate market may have reached the end of a ten year boom, but property prices will not crash, say experts. Although Spanish property price growth is in decline, it is growth nonetheless. Rising interest rates on mortgages and over construction are some of the factors that have halted growth in recent months, while hotspotters have been lured into bargain basement property investment in unstable markets such as Bulgaria and Poland. Spain remains, however a top retirement destination and is still number one with Brit buyers. Germany and France remain popular markets for Spanish property and an increase in investment from Ireland has occurred in recent years. A number of big players in the low cost airline industry have announced new routes to Spain from Ireland, following the lead of Ryanair, who expanded its service earlier this year – a clear indication that the Irish market will continue to expand.
Long Term Investors Look to Spain
October 4th 2006 Despite a bout of property slump scare stories, experts are still touting Spain as a hotspot for long term investment. Fears of a major price crash have not been realised and analysts are now predicting that the slowdown will be minimal and will not lead to any long term decline. Property growth rates are down - partly due to the rise in mortgage interest rates - but are still sitting comfortably above economic growth rate. "I think Spain offers great long-term prospects" explains property expert Iain Maitland from Eye on Spain. "Underpinned by the growth of first time buyers, the rising number of immigrants and the growth in single person homes, it should remain numero uno with Brits".
Bargain Bolt Holes in Jaén
October 1st 2006 For those who fancy a bolt hole or a jet-to-let in Spain without the heavy price tag, the little-known Andalucian town of Jaén could prove a good place to buy. Stats from Kyero reveal that property prices in the province are the cheapest in Spain, with the average home here costing €77,000 less than a third of the average in Spain. Since the region featured on popular Brit TV show A Place In The Sun, some properties in the region have experienced price appreciation of up to 60 per cent, and demand has intensified. Jaén boasts a Moorish castle, an 11th-century Arab baths and a 16th-century cathedral and palace. On the downside, there are no beaches and the nearest international airport is located an hour's drive away in Granada. The survey found that the most expensive places to buy in Spain were, unsurprisingly Barcelona, Ibiza and Majorca, where average prices are more than €500,000.
Malaga Budget to Improve Infrastructure
September 30th 2006 One third of the 2007 state budget for the Malaga province will be spent on improving the airport, including construction of a second runway, the government announced yesterday. The size of the investment (30 million euros) reflects the importance of the airport for the development of Malaga’s economy over the coming years. The biggest amount (77.5 million euros) is going into the initial phase of the building of a second runway; 51.6 million euros goes to the building of new car parks in the airport and 106 million euros into the final phase of the new runway, scheduled to be ready for service in 2008. Other costs relating to the new terminal building amount to 8.6 million euros. The government is also ploughing funds into the railways and roads in the province as part of an ongoing effort to reduce traffic in and around Malaga city. Improvements to infrastructure, particularly airports signal market growth and increased demand, a clear sign that real estate investment in the province is still a lucrative option for property developers.
Easyjet Doubles Routes from Madrid
September 25th 2006 Europe's second-largest no-frills airline, has announced plans to launch six new routes from its new base at Madrid's Barajas airport. The airline has will now provide domestic flights to Oviedo and La Coruna and four international routes to Lyon and Toulouse in France, Rome in Italy and Casablanca in Morocco. The new services will start February next year and EasyJet will initially base three aircraft at Barajas.
Police Crack-down on Costa Del Crime
September 23rd 2006 Another gang of foreign criminals has been broken up by the police in Málaga this week. In the latest case, 11 Algerians, specialists in villa robberies, car thefts and credit card fraud, have been arrested in Benalmádena, Torremolinos and Málaga. The ECO specialist police group against organised crime believe that the latest criminal cartel is responsible for some 200 crimes carried out on the Costa del Sol so far this year. The clean up operation is going well in the region making the streets safer for tourists and locals alike. Police say that the operation is proving particularly successful in the city of Málaga.
Owners will Fork Out for Property Checks
September 20th 2006 From today new regulations in Málaga City mean that all blocks of flats and buildings that are more than 20 years old need to have regular obligatory inspections, paid for by the proprietors. The new law will be passed in the City Hall today and is intended to stop the deterioration seen in many buildings in the city, especially those used for rental accommodation. The controls will take some time to establish however, because before they can be enforced the City Hall has to create a new census of all the buildings over 20 years old in the city. Once the inspections do get underway they will start first with buildings over 100 years old. (source: Typically Spanish)
Home Buyers Brush Shoulders with Sporting Heroes
September 19th 2006 As social stereotypes go, the Brits are probably best known for their passion for beer, sun and football. Canny property developers have caught onto the obsession for the latter and have built a sporting village in Spain, giving home owners the chance to buy a place in the sun alongside football legends such as Tottenham's Paul Robinson and Arsenal Player José Antonio Reyes. Buyers will brush shoulders with their favourite players while enjoying the many facilities available at the village. The site on the Costa Del Sol, near Estepona boasts six championship golf courses as well as swimming pools, tennis courts and gyms. Several UK football clubs have given endoresements to the village and Paul Robinson plans to set up his own football academy on site.
Second-Annual Real Estate Fair in Leon
September 18th 2006 Leon, located in Castilla-Leon and bordering Galicia, will host its second annual real estate fair. FEINLE (Feria Inmobiliaria de Leon) will take place between September 21 and 24, 2006 at the Leon Arena, the city's main bullfighting ring. It will begin the morning of September 21st and end the afternoon of the 24th. Potential homebuyers will have access to 2,000 square meters of exhibition space and 70 stands presenting the widest range of real estate services and opportunities available in the region. Organizers of the fair, with the help of local and regional governments, have done their best to create an environment where buyers and investors can meet equitably with professionals of the real estate market. For more information about the fair, contact ALEOP (Asociación Leonesa de Edificación y Obra Pública) at 987-218-250.
Marbella's Most Wanted Caught in Ibiza
September 18th 2006 Yet another criminal mastermind has been arrested in connection with Marbella property scams this weekend. Walter "Wattie" Douglas, Scotlands's most wanted crime boss was arrested after 12 years on the run, accused of driving a massive money-laundering operation in southern Spain involving "millionaire property and financial investments". He was caught trying to fly into Ibiza on a false passport on Friday and was instantly taken back to Spain where he will face trial. This arrest comes as part of a huge clean up operation on the coastal resort where a multitude of government officials and high profile businessmen have been tried and jailed over similar property scams.
British Government Crackdown on Foreign Assets
September 18th 2006 HM Revenue & Customs is cracking down on families who own overseas property over concerns that they could be avoiding inheritance tax responsibilities. With around 250,000 British residents owning property overseas, the clampdown could result in heavy penalties for families who believe they no longer have to pay IHT to the taxman. In the latest newsletter HMRC warn that they will be paying particularly close attention to foreign assets for the remainder of 2006. "In appropriate cases we will open an enquiry and ask you for further information to satisfy ourselves that all of the foreign assets have been included and that they have been valued on the statutory basis." IHT, which is levied at 40% on assets above £285,000, is extremely difficult to avoid even if a former UK resident attempts to acquire a new domicile. For more information see the full report.
One in Four School Kids Foreign
September 16th 2006 One in four of the new pupils starting school for the first time this year in the Málaga province is a foreigner. Out of 271,000 pupils returning to school tomorrow an estimated 21,500 of them are not native to Spain. The main countries of origin of these pupils are Britain, Argentina, Morocco and Ecuador. In line with government policy all of these children will receive extra Spanish language classes outside normal school hours. Studies have shown that children who attend school abroad and learn a second language grow up to be better adjusted, more open minded and more intelligent adults than those who do not. Pupils on the Costa del Sol are used to the cosmopolitan nature of the schools and parents who have relocated to the Malaga province have found that their children adapt quickly and are accepted and well regarded by their peers.
Cursed Blessing for Spanish Youth
September 15th 2006 According to a study by OBJOVI (part of the Spanish youth advocacy group CJE), only 11% of the nearly 4 million young people in Spain between 18 and 24 years of age managed to leave their parent's homes and purchase their own homes in 2005. The prolonged dependence of young people toward their families has become a norm accepted by everyone (young people included), a social factor that could prevent young people from achieving financial independence even in the absence of obstacles such as high housing prices. On the other hand, young people who are able to beat the odds and purchase a home might be sacrificing too much by designating 40% of their income to loan repayments that could easily drag on for the rest of their lives. This kind of commitment could become a serious obstacle to the investment of Spanish youth in other, more life-enriching activities, such as traveling or raising children. Spanish sociologist Carlos Iles points to a mistaken association between home ownership and security that might have been valid decades ago but can no longer be applied to a modern Spain where changes in family, occupation and residence are much more common. Following the idea imparted by their parents, young people base their decision to buy a home not on an informed analysis of the benefits of buying vs. renting, but on the collective notion that a root possession will give them security and that renting a home to achieve independence is a waste of money.
Real Estate Companies Cash In
September 15th 2006 The publicly traded Spanish real estate companies generated over 1 billion euros in the first quarter of the year; an increase of 53.12% as compared to the first quarter of 2005. Spain's six largest real estate companies – Metrovacesa, Urbis, Fadesa, Astroc, Colonial and Riofisa – together produced just over 975 million euros of the total industry profits. Metrovacesa was the company that contributed the most to these numbers with 622 million euros in net profits. This total represents a 180% growth from last year and was stimulated largely by increases in rental rates and sales of residential homes as well as favorable asset re-evaluations. Following Metrovacesa were Urbis, with profits of 118 million euros (38% growth); Fadesa with 78 million euros (16% growth); Astroc with 62 million euros (513% growth); Colonial with 53 million euros (77% reduction); and Riofisa, which had its debut on July 19th as a publicly traded company, with 43 million euros (450% growth). Judging by these figures, 2006 promises to be a good year for the real estate sector in Spain. Revenues continue to increase and the number of homes built each month surpasses that of 2005 by a consistent 10%.
Real Estate Goes Green
September 14th 2006 With the aim of promoting environmental awareness within the real estate industry, the Spanish real estate firm Iberdrola (a branch of the renewable energy company by the same name) recently created a specialized department to make possible the construction of eco-efficient, sustainable homes. This move, according to Iberdrola, is part of an effort to create a culture of respect towards the environment, uphold biodiversity and encourage the efficient use of energy. The new department will focus on integrating various forms of renewable energies with energy-storage technologies. Among its earliest achievements is a development of 25 eco-friendly homes in Granada and the planning of a sustainable-energy research facility in Castilla La Mancha. A branch of the second-largest electric company in Spain, Iberdrola Inmobiliaria shows strong signs of playing a major part in the Spanish real estate industry for years to come. It reached a net profit of 58.6 million euros in the first quarter of 2006, increasing its profits from the same period in 2005 by nearly 40%. It also increased its holdings of developable land by 12.6% within the same period.
Congestion Charge in Spain?
September 13th 2006 The Spanish government is considering introducing London Style congestion charges for cars entering the major Spanish cities. The idea will be debated in PSOE's annual political conference due to take place between September15-17. Property prices inside the congestion zone increased in London after the change was implemented and the same is expected to happen if the plans go ahead in Spain. PSOE has already been working towards reducing car tolls on motorways in Galicia and Andalucía due to their unpopularity, and it seems unlikely that the plans for congestion charges will be approved.
Mallorca's Best Address
September 13th 2006 The exclusive suburban district of Bendinat in Mallorca has been rated as the most expensive place to live on the Spanish coast. With each square metre of property costing upwards of 4000 Euros, the area has become a luxury resort for wealthy investors. Nestled between popular night spot Magaluf and Palma, only 17 km from the airport, Bendinat is a small residential suburb of the resort town of Portals Nous, which in turn is part of the municipal district of Calvia, on the south west coast of Mallorca. Home to the family of top model Claudia Schiffer and the Monserrat family, Bendinat also boasts the Royal Golf course, whose honorary president is His Majesty King Juan Carlos of Spain.
Spain is "Buyers Market" figures reveal
September 12th 2006 Official figures reveal that house prices will increase by less than 10% in Spain over the next period, the lowest rise in the last six years. With a stagnant market created by over development and decreased demand, houses are selling slowly putting buyers in a good position to negotiate with asking prices and snap up bargains. Now is a good time to buy for retirees and those looking to buy private holiday homes. The figures give an overview of the current market but a breakdown shows that property prices are increasing in growing markets and prices will continue to rise on premium golf and beach properties.
Red Face for Ryanair
September 7th 2006 In a disastrous effort to boost its profile in Spain, Irish air carrier Ryanair caused pandemonium in Barcelona last week, offering free flights to anyone who turned up in the main square holding a sign complaining about rival Iberia. After handing out only 500 free tickets, Ryanair sent several hundred hopefuls away empty handed inciting wrath on the company rep. The airline worker had to be rescued by police from the angry mob who chased her around the Plaça Catalunya demanding free flights. Ryanair is one of several companies vying to knock Iberia off the top spot in Spain and a low cost airline price war is expected as big players like Easyjet, Vueling and Air Europa begin to muscle their way into the domestic market. Internal flights within Spain are notoriously expensive while those coming in and out of the country often cost next to nothing. The competition for the internal market should push prices down allowing cheap, no frills travel between major Spanish cities.
Chiclana Owners Get Good News
September 6th 2006 Owners of properties that have been built in Chiclana without building licences may be in for some good news according to Costa Del Sol News Online. The town hall says it can begin to make properties legal after the summer, although the town planning department does not expect to be inundated with applications during this voluntary period. The aim is to legalise 20,000 properties and to achieve this, the town hall has signed agreements with the College of Architects and the College of Building Overseers and Technical Architects, who will help owners with the technical aspect of the process, and with Unicaja bank who will offer loans to help people pay the costs. The properties must have been built before 1998, and must be in one of the nine ‘areas de gestión básica’ defined in the local development plan (PGOU). To initiate the legalisation process, owners must produce the certificate to show they are on the ‘padrón’ (municipal population register), proof of ownership of the property, proof that they are registered for IBI tax, and documents which show how old the house is, as well as the contracts for electricity and water.
Tarifa Tipped for Second Boom
September 6th 2006 The thriving town of Tarifa on the Costa de la Luz appears to be offering a substantial boost to the Spanish property market according to Assetz. The trendy region is a watersports mecca thanks to its location in the Atlantic and strong coastal winds. Tourists have consistently shown interest in the region, leading the travel industry to create a strong base for housing in the area, which has seen prices steadily rise in the past before stabilising recently. Tipped as a hotspot by leading British broadsheet newspapers, the town has proved popular among overseas property investors owing to its natural features. The area boasts ten kilometres of white sand beaches as well as ranges of open countryside. It also offers a view of the Rif mountains of Morocco from its location on Spain's south coast. Tarifa town has become a fashionable resort for those in the know, attracting young, upwardly mobile surf types and new families. The area has already provided substantial returns for overseas property investors in recent years through high levels of house price inflation. A recent deal to improve Gibraltar airport will make Costa de la Luz more accessible, potentially driving a second boom in the area. It is not too late to make a lucrative investment in this area.
Clickair Takes to the Skies
September 5th 2006 Clickair, the low-cost airline backed by Iberia, will start selling tickets this week, the company announced today (Sept 5). The new airline based at Barcelona's El Prat airport, will offer flights to Amsterdam, Geneva, Zurich, Prague, Dublín, Lisbon, Oporto and Moscow from the beginning of October. Domestic flights will also run to Málaga, Valencia, Seville and Bilbao. The airline, which has three planes, is working round the clock to try to make sure they are ready to begin selling tickets from September 7th, a spokesman said. Meanwhile, no frills airline Ryanair has taken a record 4 million passengers during the month of August. The company has announced new routes to the Canary Islands and will double its flight frequency from Dublin to Malaga from February next year.
Hole in One for Costa Del Golf
September 4th 2006 Golf is now estimated to be generating more than 900 million euros in the Málaga province every year according to website Typically Spanish. The province streches from Nerja in the east to Gibraltar in the west and is home to many excellent golf courses including those on Marbella´s golden golf mile. With an average round costing upwards of 50 euros per person and a multitude of courses to suit all levels, golfing holidays mean big bucks for property investors in the area. "Buying near a golf course will significantly boost the rental potential of your property" says property expert Daniel Rodriguez from oppSpain.com. New courses indicate investment in a region and it is worth looking at plans for new golf resorts to see where those in the know are putting their money. Polaris World has announced plans to open a brand new course and resort in Murcia later this year. Managing Director of AGS Properties (UK) Tony Sparkes says, “Condado de Alhama is a unique resort that will offer superb amenities with beautiful surroundings. Boasting 3 Jack Nicklaus ‘signature’ golf courses which form part of the 8 course ‘Nicklaus Golf Trail,’ which will provide golf players of all standards an opportunity to play golf on quality golf courses unequalled outside of the United States."
Stingy Tourists Not Spending in Spain
September 1st 2006 It came as no surprise to analysts that the Spanish government rejected an EU proposal, in June last year, aimed at eradicating extreme poverty in the world because of the impact it would have on Spanish tourism. The proposal to levy special taxes on fuel and airline tickets to raise funds to finance a global anti-poverty initiative would have added between ten to 30 euros to the cost of an airline ticket, reported Spanish newspaper SUR. Economy Minister Pedro Solbes said that the measures were a “sensitive issue given the importance tourism has for Spain.” Tourism currently accounts for approximately 12 per cent of Spain's Gross Domestic Product (GDP) and provides work for approximately 2.3 million workers or 12.2 per cent of the total workforce. The sector is also an important earner of foreign money, which helps the country reduce its bulging trade deficit. The Ministry is forecasting a four per cent increase in tourism compared to last year. “Spain retains a leading position in the tourist industry; we are the second tourist destination in the world and the second country that earns the most income from tourism,” said Industry Tourism and Commerce Minister Sr Montilla. The number of visitors from the UK and Germany continues to increase and according to SUR there has also been an extraordinary rise in tourists from France. However, the rise in the number of tourists visiting Spain has not translated into an increase in net income from tourism, in fact income receipts are falling because visitors are not staying for as long and not spending as much. The government will respond with a campaign to propmote Spain to wealthier markets who are likely to spend more during their holidays.
Bulgaria Property Plummets
September 1st 2006 Investment Advisor Assetz has revealed that in the third quarter of 2006, Bulgaria has suffered a dramatic change of fortunes. With total returns on cash invested falling from 104% in June this year to 44% currently, Bulgaria has plummeted from the top of the table where it has been since March, to sixth place and is likely to drop further still. Stuart Law, Managing Director of Assetz comments: "Bulgaria is facing a period of readjustment after a huge initial foreign investment. While longer-term investors are still set to benefit over the next 5 – 10 years, as low cost property continues to attract holiday home buyers, there are no longer instant returns to be made in the short term. An oversupply of rental properties is being aggravated by stories of dishonest local management agencies, some of which are reported to be letting properties and keeping the cash."
Irish Buyers Take the Plunge Abroad
August 29th 2006 Three quarters of first-time buyers in Northern Ireland would consider buying their first property abroad if they continue to be priced out, further research from Moneycorp has revealed. Soaring house prices have pushed 79% of first-time buyers to look at Spain or Italy in a bid to get onto the property ladder, according to the survey by the foreign exchange specialist. Spain is the first choice for cash-strapped first-timers, with Italy coming in at second place and France also high on buyers' wish lists. The survey showed that most potential buyers would happily commute to work with only one in five citing distance as a key factor in choosing a location. The shared currency and low interest rates on European mortgages are tempting Irish buyers to either move wholesale or to buy overseas solely for investment purposes. "The fact that so many first-timers are prepared to get their first taste of home ownership in a foreign land speaks volumes for the state of today's domestic market-buying conditions," said Moneycorp spokesman Nick Bull. Source: Firstrung.com
August 29th 2006 The average occupancy of hotels in Tarifa, Algeciras, La Línea and Zahara de los Atunes, reached 91.5% in the first two weeks of August according to The Association of Hoteliers. Tarifa achieved the highest ratings with 98.01 per cent, followed by Zahara, La Línea and Algeciras. The second fortnight is expected to see a drop to around 86.68 per cent giving an average of 89 per cent for the month, which is five per cent lower than in 2005 but similar to 2003 and 2004. Source Costa Del Sol News Online.
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