Real Estate & Editors' Choice News in Spain from Propertyshowrooms.com

Madrid property market has own peculiarities

Wed, 15 May 2013 14:12:45 GMT

Each local property market has its own quirks and peculiarities, and Madrid is no exception. The Spanish Brick has stressed in a Q&A that investors must approach Spanish real estate differently depending on where it is. After all, buying a property in a small town is different to doing so in the capital. There are different price points and offers available in the Madrid and it is important to understand the environment.

Property price adjustment is just one thing people need to be aware of. "The fact that the cost of housing continues to adjust month-to-month should not be overlooked, as it is for this very reason that the market is swamped with very attractive housing offers," the Spanish Brick wrote. "You should analyse, in detail, the characteristics of the flat and place them in relation to the area in which the flat is located. These clues about the local market should help you in making the best decision."

You should also consider investment yields. Currently, according to the Global Property Guide, the price per square metre for Spanish property stands at €4,683 (approximately £3,967), with monthly rents of €1,865 (approximately £1,579). This creates an average rental yield of 3.98 per cent, but this is likely to differ in the capital. There will also be variation depending on the area where a property is located.

When it comes to choosing a district for investment, Salamanca, Chamberi, Charmartin, Retiro and certain parts of the city centre remain the most popular. However, it often pays to step outside of these comfort zones and opt for real estate in regeneration areas, ensuring you're ahead of the curve. However, this is better suited to those looking for a return in the long term.

For a quick turn around, stick to popular areas. Spanish Brick explains here returns are possible from the third or fifth year. Over a ten or 15-year period, look to properties in Tetuan and Usera. These areas have good prospects.

Property investment visa will give Spain a boost

Tue, 14 May 2013 17:25:30 GMT

The introduction of new residency visas for foreign investors in Spanish property is expected to give the country’s ailing housing market a boost.

A new law, expected to be passed in July this year will give automatic residency to non-European Union citizens if they invest more than €500,000 in Spanish property.

It is expected that the move will create an increase in investment interest from Asia, with Chinese buyers predicted to pour €100 million into property investment in Spain.

Estate agent Lucas Fox told Property Wire that 80 per cent of the properties on their books in 2012 were sold to non-Spanish clients, with Asian investors looking at Barcelona and Ibiza in particular.

"Most Chinese investors want to buy a property in Barcelona because, not only are they getting a good investment, but there is now the opportunity to acquire Spanish residency at the same time. What’s more, the market is particularly attractive given the historic low price," said SQFT director Han Bin, which is working in collaboration with Lucas Fox.

Although Chinese investors are on the radar, it is expected that the new visa laws will create a boost in funds from many global investors seeking residency in Europe.

Jason Ham, Lucas Fox’s business development manager, told Property Wire: "We have seen Chinese investment in many corners of the world but this is the first time that we have seen interest in Ibiza. Thanks to the proposed changes in residency laws for property investors outside of the European Union, we expect to see increasingly more interest from the Asia-Pacific region as well as Russia and the United States."

The details of the visa have not yet been confirmed however it is expected that they will extend to spouses and children but will not be retroactive.

As well as the introduction of the residency visa, the current low property prices are thought to be tempting for investors as values are around 40 per cent below peak levels.

US tourists heading to Spain

Tue, 7 May 2013 10:15:58 GMT

Spain has long been the most popular holiday destination among Europeans, but it seems Americans now want a piece of the action too. According to the country's tourism research agency Frontur, arrivals from the US increased by 35.7 per cent to almost 100,000 in March 2013 compared to 2012. This is the highest growth rate of any nation.

Marc Pritchard, sales and marketing manager for leading Spanish house builder Taylor Wimpey Espana, commented: "US citizens have been vacationing in Spain for many years. Numerous celebrities including Michael Douglas, Antonio Banderas, Melanie Griffiths and even George Clooney own second homes here and walking down the Golden Mile in Marbella can at times feel like a stroll through the streets of Hollywood."

For those considering Spanish property, this means there is a burgeoning tourism market to be tapped into. To capture the interest of US holidaymakers, investing in real estate that appeals to their tastes and is in popular locations, such as the Costa del Sol, will help to ensure high occupancy rates.

However, it isn't just American's that are increasing their market share in Spanish tourism and overall tourism increased 7.9 per cent year-on-year in March 2013. In Q1 there was also an increase of 2.3 per cent in the number of holidaymakers visiting the country. This equates to a staggering 9.4 million tourists visiting Spain between January and March.

Brits made up just less than one in five (19.9 per cent) of all arrivals in the country, while Germans accounted for 11.9 per cent of total visitors. The French also increased their share in tourism, with arrivals rising by 16 per cent. Scandinavians were up 13.8 per cent year-on-year.

The Costa Blanca is proving to be a popular spot for holidaymakers and there is good access between the area and the US. Mr Pritchard explained direct flights operate from New York, Atlanta, Miami, Boston, Philadelphia, Newark, Charlotte, Dallas and LA to Madrid. There is then a high-speed rail link to Alicante.

Goldman Sachs: Spanish property prices must go lower

Thu, 2 May 2013 13:52:07 GMT

While the thought of further price drops in the Spanish property market will send a cold chill up the spine of many, one industry expert claims values must go even lower if the country hopes to turn its fortunes around. Goldman Sachs has warned that real estate prices must decrease by a further ten per cent, despite the fact they have already dropped by 30 per cent since peak, the Daily Telegraph reported.

The global investment bank is calling for a fundamental restructuring of the country's lenders and claims Spain's banks are holding back progress.This comes after the deficit reduction plan was abandoned. A deal has been brokered between the European Commission and International Monetary Fund to give Madrid to bring down the deficit below three per cent. It is hoped this will lessen the pressure placed on the economy and address Spain's substantial unemployment problem.

This is impacting upon the property market and the government has recently passed a law to prevent banks from repossessing homes. However, Goldman Sachs don't believe this is the way forward and the bank's economists Andrew Benito and Sebastian Graves explained to the newspaper: "Our preferred model values housing based on the relationship between rental yields and real borrowing costs. The current level is consistent with house prices falling by a further ten per cent to reach an implied equilibrium."

They added that the bank's decision to continue offering evergreen loans to risky borrowers is holding back recovery, making too much credit available to "unhealthy sectors". Nonetheless, the financial sector has undergone significant restructuring and the International Monetary Fund (IMF) is confident the country is on the right track."The clean-up of undercapitalised banks has reached an advanced stage, and key reforms of Spain's financial sector have been either adopted or designed," they said in report. Sareb was also praised for its progress in dealing with distressed real estate and finalising the transfer of assets with affected banks.

Los Alcazares 'a hidden gem for property investors'

Fri, 26 Apr 2013 10:34:03 GMT

Foreign property investors are always on the lookout for a bargain Spanish real estate - properties in desirable regions which are likely to be in demand in the future. Spain is full of investment honeypots - areas which typically attract plenty of attention from overseas. But sometimes it is advisable to deviate from the beaten path and take a look at areas that other real estate buyers may have overlooked.

Writing for NuWire Investor, Stennie Harvey highlighted the pleasant coastal town of Los Alcazares in Murcia, Spain, as being something of a "hidden gem". Despite the climate, location and abundance of affordable property, she claimed that many investors overlook this part of the country. Rather than trying to find a home in Murcia, they typically look elsewhere for their purchase.

Ms Harvey described Los Alcazares as one of her favourite coastal towns in southern Spain. She explained that it originated as a Roman spa settlement, and later attracted Moorish traders who brought their goods to market. Los Alcazares is both a summer resort and a year-round working town, Ms Harvey noted - meaning property may be attractive to both tourists and employed residents.

She drew attention to the town's long promenade, which is lined with cafes and overlooks the beaches of the silver-blue Mar Menor. "A mineral-rich lagoon, it’s separated from the open Mediterranean by only a narrow strip of land," Ms Harvey said. "Some seaside settlements die in winter, but Los Alcazares isn’t one of them," she added. Typically, property prices are affordable, but also negotiable for those eager to drive a hard bargain, Ms Harvey suggested.

"Murcia and the Costa Calida - the name means 'the warm coast' - enjoy some of mainland Europe’s best winter weather," Ms Harvey stated. She pointed to daytime temperatures of 68 to 70 degrees Fahrenheit, claiming that Los Alcazares is a very desirable location - and worth considering as real estate investors look to develop their Spanish portfolio.

Mallorca property 'boosted by thriving tourist industry'

Fri, 26 Apr 2013 13:44:34 GMT

Mallorca has no shortage of visitors each year, with millions flocking to the Mediterranean hotspot for a sun-soaked holiday. The popularity of the island with cruise ships and package holidays ensures it is well and truly on the beaten track, giving excellent exposure to the Mallorca tourist industry.

According to Marc Pritchard, sales and marketing manager of Taylor Wimpey de España - the Spanish house builder - the number of people visiting the island is great news for the local property market. He claimed that demand for accommodation in Mallorca is increasing, particularly over the summer period. Properties close to marinas are becoming "highly desirable", Mr Pritchard noted - meaning real estate in the Balearics could be a great investment opportunity for overseas buyers.

“There are many benefits to be had from owning a home in Mallorca," he stated. "The stunning Balearic Island offers a wonderful quality of life and superb properties that are so often desired by holiday makers and potential home owners. And, although recognised in part as a hub for the rich and famous, Mallorca has plenty to offer in terms of affordable property with something for everyone."

Mr Pritchard noted that much of the attention is focused on Palma de Mallorca, the island's capital, a city home to around 300,000 people. In the main, visitors flock to the old town around the cathedral, and to the secret natural coves with secluded beaches nearby. He also drew attention to the island's many traditional fishing villages, and the abundance of hiking opportunities.

“Mallorca is quite simply a tourist hotspot," Mr Pritchard stated. He said that every year, the island receives "an abundance of intrigued visitors" attracted by its "sun-soaked climate, over 43 striking blue flag beaches and high class restaurants". The staging of the Super Yacht Cup race - one of the most significant luxury sailing events in Europe - also adds prestige to the island, potentially giving the local property market a further boost.

Murcia property market booming

Thu, 25 Apr 2013 13:43:56 GMT

While it is easy to get bogged down in doom and gloom news about the Spanish property market, there are some areas that are going from strength to strength. Murcia is one of these lucky locations and figures have shown the destination is still drawing in overseas buyers. The National Institute of Statistics revealed sales of Murcian property were up by 24.1 per cent in February 2013 year-on-year, ending the month on 1,169 transactions. This is well above the national figure of 17.3 per cent.

Growth in the region can also be seen in the books of local estate agents and Murcia-based firm Mercers enjoyed a 25 per cent rise in sales for Q1 year-on-year. This comes after the estate agents predicted a 25 per cent rise in transactions for the whole of the year. Luckily, the first quarter of the year has gone off with a bang, placing the local property market in a good position for the year ahead.

Chris Mercer, director of Mercers, commented: "I can’t pinpoint exactly why our sales are up so much, but momentum is certainly beginning to build. It can’t be attributed to an end-of-year rush before VAT on new builds went up from four per cent to ten per cent on January 1st, as all of our transactions have been resales. Furthermore, enquiries have not increased at the same level but those we have are more serious, have the funds in place and are intelligent enough to know that the window of opportunity on a serious Spanish property bargain will not be open forever."

This sales boost could be the result of places like the UK slowly emerging from the financial crisis, enabling international buyers to enter the fray once again. When comparing Mercer's Q1 2013 performance with the first three months of 2011, a massive 65 per cent rise in sales is noted - a sign conditions are improving. However, in Murcia prices have been reduced by up to 55 per cent from their peak levels, showing the area hasn't managed to escape the effects of the recession.

Is now the time to invest in Marbella property?

Tue, 23 Apr 2013 11:01:37 GMT

With real estate prices low and tourism booming, it seems now could be the ideal time to invest in Marbella property. Fine & Country claim the climate, changes to the cultural scene and improvements to the transport system in the area are making Marbella one of the most attractive places to be. Expansion of the port also means the property market is in a good position for recovery.

This makes a luxury villa in Marbella the "smart choice", according to Fine & Country, especially with March being the fourth coldest ever on record. Between March and April, there is approximately ten days of rainfall in the UK, with 110 days of rain per year. Conversely, Marbella has 320 days of sunshine on average per annum.

Michael Lovett, director of Fine & Country Marbella, said: "The attraction of Marbella is at its peak right now not just because of the unfortunate weather in the UK but because the area is undergoing a real rejuvenation. Changes to the cultural scene and the transport system have recently been made to re-establish Marbella as the place to live and as a result, the future of the property market is promising."

Investors may be particularly interested in the €84 million expansion of the port, which is expected to drive the revitalisation of the area. Not only will the port bring economic benefits, it will enable more cruise liners to dock in Marbella - good news for local tourism. Over the next four years, it is expected that the number of cruise ships coming to the port will increase considerably, while more berths will be created for private boats and yachts.

The Balearic Island of Mallorca is one place that has already seen the benefits of welcoming cruise liners. Already enjoying considerable tourism footfall from the ships, with approximately one million passengers entering Mallorca by sea annually, the extension of the pier is expected to increase the number of cruise ships coming to the port. In 2013 alone, the port of Palma is forecast to receive 449 cruise ships.

Spain remains top spot for golf tourism

Mon, 22 Apr 2013 14:24:25 GMT

Spain continues to be the top spot for golf tourism, with a new survey by KPMG's Golf Advisory Practice naming the country as the most popular travel destination for the sport once again. Portugal and Scotland came in second and third respectively, but it is the lush greens of Spain that attract golfers in their droves year after year.

This is yet another string to add to the country's tourism bow, showing Spain is still a heavy hitter on the holiday scene, despite its economic troubles. What's more, with global golf holiday sales increasing by 9.3 per cent in 2012 compared to the year previous, there are plenty of opportunities to be had. In fact, among those operators surveyed by KPMG, 1.6 million golf travellers were recorded.

With golf tourism exceeding the estimated €1.5 billion (£1.2 billion), now is a great time to invest in Spanish property to capture the holiday market. This is the advice of Taylor Wimpey Espana and with real estate values at an all time low, there are plenty of great deals to be had. Marc Pritchard, sales and marketing manager for Taylor Wimpey Espana, explained: "[While] the course itself is an important factor when choosing a golfing holiday, the accommodation is equally important once you leave the fairway. Developments with onsite courses, accommodation and amenities are in high demand as they offer the entire package, are often easy to maintain and offer a higher level of security and community living."

Germans are proving to be particularly active in the golf tourism market and in 2012, Taylor Wimpey noticed a 36 per cent rise in the number of buyers from the country compared to 2011. The Costa del Sol is also proving to be a hot spot and boasts over 50 golf courses within its parameters. Some of these even have a stunning mountain locale, with breathtaking views of the area. With these amenities, it certainly isn't difficult to see why golf tourism is hotting up in the country.

Spain remains top EU destination

Thu, 18 Apr 2013 13:37:08 GMT

New figures have named Spain as the top EU destination once again, showing that despite the economic climate, the country remains the dream spot for many tourists. Eurostat found that in 2011, 13 per cent of all outbound trips in Europe were made to Spain, with Italy and France coming in second place (nine per cent respectively). These figures do not include holiday makers outside of the EU and actual visitor numbers are likely to be much higher.

It was also revealed that Spain is the preferred choice among Portuguese, British and French tourists, with market shares of 39 per cent, 21 per cent and 18 per cent respectively. This flies in the face of most research, which indicates it is in fact people from the UK that make up the majority of travellers in Spain.

These figures will no doubt be welcomed by Spaniards, who have been faced with a deluge of bad news over the coming years, thanks to the recession. What's more, they indicate investors looking to enter the holiday let market should set their sights on Spanish property, to benefit from low real estate prices and high demand.

Data shows that many foreign buyers are already capitalising on the assets the country has to offer. Spain's Ministry of Development revealed overseas buyers upped their investment in real estate by 13.7 per cent in 2012, equating to €6,336 million worth of property transactions on private homes. This is considerably greater than the €5,573.3 million noted in 2011.

Over the last quarter of 2012, activity was particularly strong, with overseas investors buying 47 per cent more homes than the same time in 2011. Some 13,873 properties were bought by foreigners between October and December. This appetite for Spanish real estate shows little sign of abating anytime soon, and non-residents of the country have been increasing their market share for six consecutive quarters.

The most popular areas for investment are Alicante, Malaga, Barcelona, the Balearic Islands and Madrid. For those interested in the holiday let market, selecting the right location is integral. The Costa del Sol and Costa Blanca have proven particularly sought after among investors and holiday makers.

Russians heading to the Balearics

Tue, 16 Apr 2013 13:05:51 GMT

Balearic property buyers will need to fend off competition from Russian investors, as the eastern Europeans flock to the country. Sotheby's International Realty explained that the islands are becoming more attractive to wealthy Russians, thanks to improved hotel and leisure facilities. Visitor numbers from this part of the world were up 23.4 per cent in 2012 and all three Balearic airports now have links to the nation.

This means that not only is the property market likely to witness more Russian activity, but holiday let investors can benefit from this emerging market. According to figures from Mallorca's Hotel Association, overnight stays among Russians have increased by 34.1 per cent, with a higher-than-average stay of 11.6 days. Tourists from this nation spend an average of more than €162.8 million on the islands - up by 19.7 per cent since 2011.

Sotheby's International Realty claims this is the result of improved connectivity between the country. Daniel Chararria Waschke, managing director of Balearics Sotheby's International Realty, explained: "At March’s Moscow International Travel and Tourism exhibition, Russian tour operators confirmed that air capacity to the Islands would double and, for the first time, all three of our airports – Mallorca, Ibiza and Menorca – would be directly connected for the summer season. The Balearics are outperforming other Spanish holiday destinations in terms of percentage increase of Russian tourists and the expectation is for this trend to not only continue, but to soar."

The weather is also one of the main drivers behind Russian interest in the islands and with the Balearics increasingly tailoring their offerings to this market, demand is likely to continue. Already, the 26 golf courses and stunning marinas are proving popular. Investors looking to capitalise on the market should focus their efforts on the prime sector, choosing luxury property in key locations.

Taylor Wimpey Espana has also recognised the potential of the Balearics, explaining that Mallorca in particular is a popular port for cruise liners. With around one million passengers entering the island by sea each year, there are plenty of opportunities to tap into the growing number of tourists.

La Caixa moving to dispose of housing assets

Thu, 11 Apr 2013 11:28:13 GMT

La Caixa banking group is moving to dispose of its toxic assets and is believed to be in talks to sell a package of 12,000 Spanish properties. A source told Reuters that the real estate units will go for more than €1.5 billion, making it the largest cleansing of housing assets by a lender. La Caixa will be competing against Sareb and other financial institutions to rid itself of distressed property, as banks try to make a big push to clear their books of repossessed homes and buildings.

Should La Caixa secure the deal for their property package, it will be a big move for the group. Such deals are rare, despite international private equity firms and hedge funds interested in 'bundles' of discounted property. With so many banks looking to shift distressed assets, investors can pick and choose units.

So far, price has been a major obstacle to ridding books of toxic assets. While banks have lowered values considerably, many buyers are looking for discounts that institutions are unwilling or unable to offer. What's more, with most buyers looking for contemporary villas, opposed to the style of property that dominates the books of financial institutions, interest is tempered.

For La Caixa, clearing distressed assets will be an important part of securing their future. However, any deal has yet to be confirmed. "The process is at a very early stage and could be done in various stages, so for now the numbers are just an estimate," the source told Reuters. Nonetheless, it is expected the package will include flats and housing in Madrid, Barcelona and other major cities. These assets are considered easier to sell or rent out than more remote developments.

Properties in popular tourism destinations also have considerable potential in the holiday rental market, giving buyers a steady income until house prices rise once again. With values at an all time low, this is potentially a lucrative option for investors and with forecasts suggesting recovery will begin in 2014, they need to act quickly.

Protracted 'bust' for Spain after property boom

Wed, 10 Apr 2013 12:13:00 GMT

Spain is certainly experiencing a protracted bust after their property boom, with figures showing more companies have resorted to bankruptcy. Data compiled by the Commercial Register and published in Axesor's Corporate Radar show that since 2008, 27,108 companies have gone bust. February 2013 was the worst month of the crisis, with 1,028 businesses filing for bankruptcy. This is 81.6 per cent more than the same month in 2012.

Javier Ramos-Juste, head of studies office at Axesor, commented: "The Spanish economy had the worst February since the start of the crisis in formal insolvency procedures. SMEs are most affected mainly due to funding problems, lack of demand, delinquency and poor management of default risk."

The situation seems to be getting worse in 2013, despite reports that the country is on the verge of recovery. In the first three months of the year, 1,760 companies filed for bankruptcy - a 64.33 per cent rise on the same period last year. Unsurprisingly, the construction industry posted the highest number of businesses going bust. The Spanish market is overly saturated with property and despite significant price reductions, the sector is unable to shift considerable volumes from its books. With real estate supply higher than demand, the construction industry has gone into decline.

This is not to say there isn't demand for Spanish property and in popular resorts like the Costa del Sol, overseas buyers are keeping activity levels high. Investors are keen to put their money into contemporary new builds, particularly in prime markets. This is good news for construction firms, but is unwelcome for banks looking to get rid of distressed assets, commonly old-style fincas.

Nick Stuart, managing director of Spanish Hot Properties, stated: "International buyers are flocking to the Costa del Sol to soak up the cut-price stock, but the kind of home they’re after is in exceptionally short supply. Wealthy taste-makers are generally not into Andalucian-style fincas with pretty balustrades and Arabic roof tiles but instead seek contemporary villas or beachfront apartments with clean lines and floor-to-ceiling glass."

Confidence is returning to Spain, expert claims

Mon, 8 Apr 2013 13:13:25 GMT

Confidence in the Spanish economy is returning, according to one business expert. Ignacio Sanchez Galan, president of power giant Iberdrola, claims that reforms undertaken in the country in recent months have given investors assurance that Spain is once again open for businesses.

The overhaul of the financial sector and labour markets has been well publicised recently and there is confidence that growth will return in 2014. A report from the Spanish Business Council on Competitiveness has also claimed that good news is on the horizon for the country. Data from some of Spain's leading companies suggests that by the end of the year the economy will be on "positive levels".

"With the change in the productive structure and the emphasis that is being put on exports, we can began to think that the upcoming year can be one of growth," Mr Galan said. "Spain is today capable of accessing the markets in much better conditions than a year ago."

These words will be welcomed by the Spanish property market, which needs the economy to strengthen and domestic buyers to return in order to recover. While foreign buyers are helping to sustain demand for prime property in top destinations, other parts of the country aren't faring so well. What's more, financial institutions are struggling to rid their books of distressed real estate assets, despite significantly reducing their prices.

With an end to the crisis in sight, there is certainly hope for the sector. However, Spain still needs to prepare for tough times ahead. Prime minister Mariano Rajoy claimed that while there will be a return to growth in 2014, austerity measures will continue in the near term and 2013 will be another hard year. However, this is vital for the future of the country. "In 2014, if we are able to maintain the same level of effort, the Spanish economy will grow markedly and begin to create jobs," Mr Rajoy said. For the 26 per cent of the country out of work, this will be good news.

Is 2014 the year of recovery for Spain?

Fri, 5 Apr 2013 13:17:21 GMT

There may be light at the end of the tunnel for Spain, despite continued economic contraction and a second year of recession. Prime Minister Mariano Rajoy claimed on Wednesday (March 3rd) that there will be a return to growth in 2014, so long as the government continues with its austerity reforms. "In 2014, if we are able to maintain the same level of effort, the Spanish economy will grow markedly and begin to create jobs," he said during a meeting of the Popular Party.

This is good news for Spanish property and the economy at large, which have been lacking strong domestic activity and suffering from low investor confidence amid financial uncertainty. However, Mr Rajoy stressed that 2013 would be another difficult year for the country, specifically during Q1 and Q2. "Tangible results" will not be seen until the back end of the year, he said, but moving away from austerity policies "would be fooling the Spanish people".

Unemployment has been cited as one of the major barriers for growth in Spain and currently stands at a record 26 per cent. This equates to nearly six million Spaniards out of work and Phillip Inman, economics correspondent for the Guardian and Observer, and author of Managing Your Debt, a Which? essential guide, wrote in the Guardian that current unemployment levels are now reminiscent of the days of Franco.

For those out of work, Mr Rajoy's claim that 2014 will see more jobs will be welcomed. However, it can't be ignored that the economy contracted by 1.4 per cent in 2012, the second worst annual slump since 1970. Last week the Bank of Spain predicted this figure will be topped in 2013, with 1.5 per cent shrinkage. While there will be modest 0.6 per cent growth in 2014, this isn't the headline-grabbing good news many will be hoping for.

It seems Spain's recovery will be slow and steady, with the country still vulnerable to external shocks. However, for those considering investing in Spanish real estate, comfort can be taken in the thriving market in key resorts, such as the Costa Brava and Costa del Sol.

Foreign investment in Spanish property rises

Wed, 3 Apr 2013 15:07:01 GMT

Foreigners living in Spain upped their investment in the country's real estate by 13.7 per cent last year, new figures show.

Data from Spain's Ministry of Development suggest that foreign residents in Spain completed property transactions on private homes amounting to 6,336 million euros in 2012, a rise on the 5,573.3 million euros spent in 2011.

El Mundo reported that Spain's second-hand housing market saw the biggest volume of this spend, with 5,265 million euros in 2012, an increase of 15.6 per cent on 2011.

The number of new house transactions came to 1,070 million euros for the whole year, up 4.8 per cent compared to the previous year.

According to the Ministry of Development, Spain's foreign residents bought nearly half (47 per cent) more homes in the last three months of 2012 compared to 2011, with 13,873 private homes bought by foreign residents from October to December 2012.

This represents a trend that has been seen for six consecutive quarters now, with Alicante, Malaga, Barcelona, the Balearic Islands and Madrid being the most popular places to buy property in Spain.

One area that could attract new investment in the coming months is El Hierro in the Canary Islands (a Spanish territory), which has started to offer free Wi-Fi access across the entire island, making it the first so-called Smart Island in the world, according to Spain's Ministry of Industry, Energy and Tourism

El Hierro has 26 Wi-Fi points across its towns and residential areas, identifiable with signs in English, Spanish and German. Spain has sought to make the project as sustainable as possible, blending antennas into the landscape using volcanic rocks instead of bricks.

The development could encourage investment in commercial property on El Hierro, given the communication links brought about by free Wi-Fi.

Marbella remains a tranquil spot

Tue, 2 Apr 2013 10:09:40 GMT

Those looking to invest in Spanish property should head to Marbella if they want a green and tranquil setting. In the European Environment Agency's latest study of European cities at risk of urban flooding, Marbella was second from the bottom out of 579. Only 22.51 per cent of its area is 'sealed' by buildings, concrete or tarmac and Norrkoping in Sweden is now the only greener city at 21.6 per cent.

Nick Stuart, director of Spanish Hot Properties, commented: "This piece of research brought a smile to my face. Accusations of ‘overbuilding’ and ‘lack of planning’ have be hurled at Marbella by the media for years but the reality is the city, and much of the surrounding area, is very green – and now you don’t have to take my word for it. Take a look at satellite images from Google Maps and you’ll see plenty of parks and open space in the city centre and golf courses and mountainous countryside in the suburbs behind."

While other Costas have fallen prey to urbanisation, Marbella is certainly one area that has gone largely unspoilt. What's more, it will escape many of the effects of climate change, as green spaces help to keep cities cool. This is good news as Spain has already noted a considerable change to its environment because of climate change. Precipitation has increased in the north but decreased in the south and predictions expect that this trend will continue throughout the century.

The lure of Marbella has helped to attract a growing body of foreign investors in recent years, including Scandinavians, Brits, Dutch, Russians Chinese and Latin Americans. Luxury markets throughout the Costa del Sol are proving particularly popular and although price reductions aren't as noticeable in these segments, there are still deals to be had. However, competition will be fierce and there is a distinct shortage of luxury stock entering the market. Nick Stuart, managing director of Spanish Hot Properties, explained that contemporary villas and beachfront apartments are now much more sought after than Andalucian-style fincas.

Second home buyers continue to sustain Spanish property demand

Wed, 27 Mar 2013 12:06:44 GMT

Overseas buyers looking for a second home are continuing to sustain demand for Spanish property. Sales figures from Taylor Wimpey Espana showed that despite economic difficulties and a three per cent fall in overall real estate transactions, second home ownership is on the up, with a 57 per cent rise in sales on the Costa Blanca alone in 2012.

The region is proving that it can remain popular despite arguably difficult market conditions, drawing in foreign tourists and investors year after year across multiple market segments. What's more, its appeal is global, with buyers flocking from the UK, Russia and Scandinavia, to name but a few.

Vicente Domine, head of the Housing and Public Works Department of the regional government in Costa Blanca, claims that the number of foreign citizens purchasing homes in the Costa Blanca accounted for 29 per cent of the total number of Spanish transactions. This is a rise of 32 per cent on 2011 levels.

Marc Pritchard, sales and marketing director for Taylor Wimpey Espana, commented: "The rise in demand for second homes which we have seen on the Costa Blanca over the last 12 months is very encouraging. Enquiry rates have steadily been returning to pre-recession levels and as the market picks up we are building once again."

Taylor Wimpey Espana's La Vila Paradis, Villajoyosa development is also proving to be particularly popular, offering "clean, comfortable and stylish" units. With a beach on the doorstep and year-round sunshine, it isn't difficult to see why the site is proving popular. Choose from two or three bedroom apartments, built to a remarkably high standard. With a pool and private gardens, properties start from €249,000 (£210,896 approximately).

The developments also make ideal holiday lets for investors looking to generate an income from their property. This is a popular approach among home buyers, looking to create a return on investment at a time when the rest of the market in the country is flailing.

Luis de Guindos: Cypriot bailout no cause for Spanish concern

Tue, 26 Mar 2013 13:24:22 GMT

People should not fear for Spain's future because of the situation in Cyprus, according to the country's economy minister. Speaking ahead of the bailout that was approved early this morning (March 25th), Luis de Guindos told Europa Press that there has not been any flight of bank-deposits from Spain and the problems in Cyprus are unique, Reuters reported.

"To generalise the Cypriot situation to other economies in the eurozone is completely out of place," he said. This flies in the face of those that have predicted the crisis in Cyprus threatened other European nations, specifically the weaker members. However, Spain is not deterred and is arguably quietly confident about its position. Mr de Guindos revealed that the country has "absolutely" ruled out asking for international aid and things are looking up, with the yield on Spain's ten-year benchmark bond falling to below five per cent from more than 7.5 per cent based on European Central Bank figures, the newspaper recounted.

This means "Spain's accounts have greater credibility now" and there is likely to be almost one per cent growth next year, despite a high level of public debt. Figures from the central bank showed that public sector debt increased by 20 per cent last year, with borrowing costs rising to €884.4 billion (£763.2 billion approximately) at the end of December from €736.5 billion (£635.5 billion) in 2011. This is the equivalent to 84.1 per cent of gross domestic product - up from 69.3 per cent in 2011 and 77.3 per cent in the penultimate quarter of 2012.

Nonetheless, Spain is determined that the Cypriot bailout will not affect their recovery and for those considering Spanish property investment this is undoubtedly good news. While the current financial crisis has made real estate more affordable than ever for buyers, over the long term overall financial stability in the country is desirable. Of course, the rental market in popular coastal areas of Spain remains strong, meaning investors will still turn a profit if they they buy the right property in the right location.

Sareb to speed up distressed property sales

Mon, 25 Mar 2013 10:58:31 GMT

Sareb has announced that it will speed up its sale of distressed Spanish property, in what is an ambitious new timetable for liquidation. The bad bank is hoping to sell almost 42,000 housing units in the next five years. This is about half of the properties in its €50 billion (£42.5 billion approximately) portfolio.

However, falling house prices and a desire among buyers for modern properties in prime locations could hamper these plans for swift sale. Already the value of assets is being slashed by Sareb to clear their books, but attracting investors is proving to be no easy task.

Nonetheless, the bad bank is adamant that it is important to begin selling properties at the earliest possible opportunity. This will help to create a pricing floor for other investors, kick-starting a broader recovery in the housing market.

Interested parties won't have to wait long to get their hands on distressed real estate either, with Luis de Guindos, Spain's finance minister, declaring that Sareb is aiming to sell properties worth €1.5 billion. What's more, the country's financial reforms are on track, which bodes well for the implementation of future plans.

At the beginning of March the International Monetary Fund (IMF) declared: "The clean-up of undercapitalised banks has reached an advanced stage, and key reforms of Spain's financial sector have been either adopted or designed." Sareb has also been praised for its receipt of distressed real estate assets from the country's weakest banks. The bad bank has also finalised agreements with participating banks to manage the transfer of assets.

However, the IMF has acknowledged that the reform of Spain's financial system will continue to require "vigilant oversight" to ensure risks remain controlled, such as the impact of the pending Cypriot bailout. The IMF is confident that banks have properly prepared provisions to "cushion" the outcome on rising unemployment and non-performing loan ratios, but Spain is not out of the woods just yet.

Toxic Spanish assets on the rise

Wed, 20 Mar 2013 11:23:48 GMT

The number of toxic assets in Spain has risen once again, according to data from the Bank of Spain. Despite a drop in distressed assets during December 2012, figures have revealed that they increased once again in January. Although Sareb - known as the bad bank - has been created to manage toxic assets, bad loans as a proportion of bank's total loan book increased to 10.78 per cent in January from 10.44 per cent the month previous.

In monetary terms, toxic loans increased by €3.2 billion (£2.7 billion). With the country locked in a protracted recession, the figures come as little surprise. However, as more and more people default on finance arrangements, the number of distressed Spanish properties on the bad banks books could get out of control. With many investors preferring modern, prime real estate, toxic assets are being sold at dramatic reductions, but transactions are still not as high as hoped.

This follows news that Spain's public sector debt is also on the rise, increasing by 20 per cent during 2012. The central bank revealed that borrowing rose to €884.4 billion (£763.2 billion approximately) at the end of December from €736.5 billion (£635.5 billion) in 2011. This is the equivalent to 84.1 per cent of gross domestic product.

However, total public sector debt is still lower than the level forecast by the European Commission, indicating that Spain's financial restructuring is beginning pay off. Nevertheless, the country is still struggling under the current global climate, with the Cypriot bailout feared to have ramifications for Spain's recovery also.

Nonetheless, existing data on public sector debt may be misleading. The central bank explained: "The debt figures now being disseminated include operations relating to the Regional Government Liquidity Fund (FLA by its Spanish acronym), which came on stream in the closing months of last year." General non-recourse factoring operations are now also included in debt calculations.

Act now to get your hands on Marbella property

Fri, 15 Mar 2013 14:34:28 GMT

If you want to get your hands on real estate in Marbella you need to act fast, with Spanish property continuing to be in high demand. The area is one of the most popular in the country, especially among luxury markets and Scandinavians, Brits, Dutch, Russians, Chinese and Latin Americans. With so many now competing to get the best units, it is no surprise that Spanish Hot Properties has reported that there are just four remaining villas at Atalaya Fairways.

Nick Stuart, managing director of the company, stated: "International buyers are flocking to the Costa del Sol to soak up the cut-price stock, but the kind of home they’re after is in exceptionally short supply. Wealthy taste-makers are generally not into Andalucian-style fincas with pretty balustrades and Arabic roof tiles but instead seek contemporary villas or beachfront apartments with clean lines and floor-to-ceiling glass. Pickings are slim, but Atalaya Fairways stands out as a paragon of design excellence – ideal for a chic lock-up-and-leave millionaire’s home overseas."

The units are individually designed, meaning each property is unique, and the gated development comprises 16 three storey villas. What's more, the site overlooks Atalaya's two 18-hole golf courses and comes with its own private swimming pool. Each home has four bedrooms, en-suites, master dressing room, hydromassage Jacuzzi bath and private terrace.

With Marbella proving extremely popular among holiday makers, these properties are ideal for rental investment. However, there are other sites across the Costa del Sol for the discerning and competitive buyer. Taylor Wimpey Espana has properties dotted throughout the area and in September 2012 alone, the company noted a 22 per cent rise in transactions year-on-year. In the Costa del Sol sales were up 52 per cent.

The Real Estate Agency has also noted a boom in the second home market, reporting a 90 per cent rise in sales volumes during 2012. The UK and nearby European countries are proving to be the most active in the market, with the Costa Blanca also proving popular among investors.

Worsening unemployment spells bad news for Spanish property

Tue, 12 Mar 2013 11:20:05 GMT

March has brought with it more bad news for the domestic property sector in Spain. Nearly six million Spaniards are now out of work and it seems plans to boost employment to stimulate economic activity are failing. According to Phillip Inman, economics correspondent for the Guardian and Observer, and author of Managing Your Debt, a Which? essential guide, current unemployment levels are now reminiscent of the days of Franco. "The country was virtually a feudal, agrarian economy the last time almost six million workers were unemployed," he wrote in the Guardian.

As the country prepares for another recession, this is concerning for the property sector, which needs domestic activity to increase to move distressed assets. While foreign investors are continuing to be active in the country, they are increasingly opting for modern, new developments, opposed to many of the toxic real estate units currently being promoted by Sareb and other financial institutions. This means that the Spanish property market continues to be saturated.

For the government, finding a way out of the crisis could prove difficult and officials have recently come under fire for youth unemployment statistics. Mr Inman explained that the percentage of youngsters out of work now stands at 56.5 per cent and a ceiling does not seem to be in sight. This led to a "barely disguised jibe" from Mario Draghi, head of the European Central Bank, stating that countries that put "all the weight of flexibility" on young people leave themselves vulnerable to problems.

However, it hasn't been all bad news for Spain and there are signs that in other parts of the economy things are looking up. The International Monetary Fund (IMF) has recently declared that financial reforms in the country are on the right track, with the "clean-up of undercapitalised banks" reaching an advanced stage and important reforms either already in place or in the pipeline. What's more, Sareb has been praised by the IMF for receiving the distressed real estate of the weakest banks and finalising service agreements to manage the transfer of assets.

IMF: Spain is 'on track'

Fri, 8 Mar 2013 10:37:10 GMT

The International Monetary Fund (IMF) claims that Spain's financial reform is on the right track - undoubtedly good news for Spanish property investors. "The clean-up of undercapitalised banks has reached an advanced stage, and key reforms of Spain's financial sector have been either adopted or designed," the report explained.

Bad bank Sareb has also been praised for its progress in receiving distressed real estate assets from the weakest banks. The institution is in the process of finalising service agreements with participating banks to manage the transfer of assets, but must still work towards completing an updated and comprehensive long-term business plan.

However, momentum must continue for the reform of Spain's financial structures to succeed. The IMF has called for "vigilant oversight" to ensure that risks to the economy and the financial sector remain controlled, as they continue to be elevated as Spain undergoes the "difficult process of correcting pre-crisis imbalances".

Recession in other parts of Europe is also having a negative effect on the country's overall economic performance and the economy is expected to contract for a second year in 2013. This is doing little to help ease unemployment, which has been cited as one of the main barriers to progress in the property market. Throughout the year, it is expected that the number of people without work will stay over 26 per cent, causing a rise in the nonperforming loan ratio in the country.

However, the IMF don't believe this is a major cause for concern, stating that banks have prepared provisions to "help cushion this outcome". What's more, while the macroeconomic outlook remains bleak, it is still better than the scenario used to calculate banks' capital shortfalls under the program's stress test.

Elsewhere, foreign buyers continue to be active, ensuring the property market remains fluid in certain prime locations, such as the Costa del Sol. Investors for new markets are also entering the country, with Scandinavians increasing their market share. Taylor Wimpey Espana noted a rise 311 per cent in the number of Nordic buyers in 2012 and, so far in 2013, have accounted for a fifth of transactions.

Balearics is hotspot for foreign EU nationals

Thu, 7 Mar 2013 12:49:52 GMT

People in the EU are increasingly choosing to sell up and move to the Balearics. Some 2.3 million 'foreign' people from across Europe are officially now registered in Spain, and 133,740 of these are located in the Balearics. Making up 12.5 per cent of the Islands' inhabitants, it seems overseas buyers are becoming the dominant force in the Balearic property market.

Speaking to Balearics Sotheby's International Realty, Kate Mentink, founder and president of Europeos por Espana, said: "Taken from the latest 2012 census the figure of 133,740 EU nationals, almost 100,000 of those living in Mallorca, is an increase on the 2011 total of 130,385 and an even bigger increase on the 2010 figure of 109,026 – due in part to Bulgaria and Romania’s accession to the EU a few years earlier in 2007."

Germans are also active in the market, with 36,758 officially registered in the Balearic Islands, followed by the British at 23,804 and the Italians with 18,385. Of these, the average age of those choosing to make their lives in the country has dropped to below 40 - a massive change from 15 years ago when the Balearics attracted a primarily over 60s market. However, there has been a slightly different picture emerging internationally, especially outside of prime property segments. With the financial crisis driving up the cost of living, many non-Europeans living in the Balearics have chosen repatriation.

Daniel Chavarria Waschke, managing director of Sotheby’s International Realty, commented: "Traditionally our clients were wealthy discerning Europeans who were choosing to relocate for a peaceful retirement in the sunshine. Today, whilst that market of course exists, they are joined by younger couples or families looking for a change in lifestyle encouraged by the Balearics’ low crime rates, excellent schooling and good sense of community – all in year-round warm weather. Being able to enjoy an outdoor existence on the beach, golf course or out on the water is something most Northern Europeans crave and the Balearics offer all this and more."

Is Murcia on the verge of a tourism boom?

Thu, 21 Feb 2013 10:41:05 GMT

Those considering property in Murcia may want to make their investment sooner rather than later, as the area could be set for a tourism boom. Demand for holiday lets in the area will no doubt rise upon the opening of the long-awaited Corvera Airport, which will improve access to the region for overseas market.

According to the culture and tourism minister, "everything is going well" and there is hope of a spring-summer opening - just in time for the main season. This has been welcomed by the Spanish media and interest has started to peak, after Murcia's director general of transport and ports, Antonio Sanchez-Solis, revealed that validation procedures from the Spanish Aviation Agency are 80 per cent approved. This constitutes the last step towards Corvera Airport becoming operational.

Chris Mercer, director of Murcia-based estate agent Mercers, said: “The Spanish aviation authority, AENA, has guaranteed that commercial flights currently operating in and out of Murcia San Javier will be transferred immediately across to Corvera upon opening. All airlines involved have agreed to cooperate. With 1.2 million passengers using San Javier in 2012, this isn’t a bad starting point for a new Airport – a major advantage over Spain’s so-called ghost airports of Cuidad Real and Castellon who’ve never handled a single passenger.”

Currently, Corvera Airport is waiting on the approval of its security programme, the frontier and customs to be enabled according to Schengen, and for the State Meteorological Agency to provide weather services. It is also yet to receive the final nod on restructuring airspace between commercial flights at Corvera and military operations running out of San Javier.

Once open, president of Murcia's Chamber of Commerce, Pedro Garcia-Balibrea, believes the airport will act as a gateway to the region, promoting residential tourism. Foreign buyers have already shown considerable interest in the area, with Mercers claiming Belgian, French, Norwegian and Swedish investors are driving demand. Prices remain stable and asking prices are being all but achieved, with real estate valued at €195,000 (£158,916) selling for around €185,000 (£150,766).

Spain suffering from lack of luxury stock

Fri, 15 Feb 2013 13:30:58 GMT

The Spanish property market is heavily saturated but, according to Spanish Hot Properties, it lacks the right sort of stock. They claim foreign buyers are looking for luxury real estate, but with many flocking to the country to take advantage of falling prices, there isn’t enough high end property to go around.

With overseas investors increasingly targeting Spain, competition is likely to ensure. Between 2011 and 2012, the number of properties purchased by foreigners in the country rose for five consecutive quarters, with Q3 2012 showing the greatest rise in home sales. In the penultimate quarter of last year, 8,803 transactions were recorded - a rise of 18 per cent year-on-year.

Strong increases were also noted in Q1 and Q2, with overseas transactions rising by 15.3 per cent and 16.2 per cent respectively. As expected, the majority of these took place in popular resort areas, including the Costa Del Sol and Alicante.

Nick Stuart, director of estate agent Spanish Hot Properties, explained: “With the domestic market in hibernation, some of the responsibility for recovery has fallen on to international shoulders but, certainly in the Marbella area, they tend to want the very best homes on the market and these are in short supply. There are very few top quality modern villas or frontline beach apartments available and the old-fashioned Andalucian-style finca doesn’t have the same appeal any more. It really is slim pickings.”

What’s more, it seems that many investors are being unrealistic when trying to purchase property. Mr Stuart claims that many do not realise that prime real estate is not available at the significant discounts noted elsewhere in the market. High demand is helping to keep prices relatively high and this will only be increased when Spain’s foreign residency permit is introduced.

Consequently, it is important for buyers to go into their search for a new property with an open mind and a realistic approach. Ultimately, if you want a luxury villa, you are still going to have to pay for it.

Brits flashing the cash in Spain

Wed, 13 Feb 2013 13:15:28 GMT

It seems Britons aren't letting the financial crisis get in their way of plans to own Spanish property and were flashing the cash in the country throughout last year. The Spanish Ministry of Industry, Trade and Tourism revealed that people from the UK spent a total of €1.46 billion (£1.24 billion approximately) in Spain - up by 12 per cent on 2011 levels.

This is streets ahead of France, who came in second place at €515 million (£440 million approximately), an impressive rise of 16.6 per cent market share. Scandinavian tourists are also increasingly heading to the country, growing their numbers by 17.5 per cent. While in Spain, the average daily spend has also risen, reaching €76.3 (£65.23) - up 8.9 per cent.

There is also good news for those considering investing in hotel rentals, as the average stay has increased to 12 days per visitor. However, traditionally popular Spanish hot spots will likely continue to enjoy the greatest performance and tourism numbers.

Marc Pritchard, sales and marketing manager for leading Spanish homes builder Taylor Wimpey Espana, commented: "Spain has indeed been through a challenging period but seeing the continual rise of tourists and associated spend to the country as a whole and the Costa Blanca specifically is immensely reassuring for both current and prospective property owners. Improved personal finances and a decrease in holiday prices have contributed to rising tourist levels, helping to alleviate some of the stresses on the Spanish economy."

Ease of access to the country is also helping to keep tourist numbers high, with new flights announced during the summer. This means holiday rentals will continue to be in demand, creating further opportunities for British buyers. With property prices remaining low in the country and the bad bank selling off its first wave of distressed real estate, now is an ideal time for investors to jump on the band wagon and pick up a bargain property.

Spanish property recovery relies on more than buyer interest

Mon, 11 Feb 2013 11:29:25 GMT

The recovery of the Spanish property market doesn't just depend on rekindling buyer interest, according to industry experts. Members of the Luxury Real Estate network discussed the future of the sector at the 7th Annual International Symposium at the Westin Hotel Valencia. Hosted by Inmobiliaria Rimontgó, the conference created a broad, multidisciplinary platform for professionals to learn from one another and exchange ideas.

A need for a multi-pronged approach to recovery was the verdict to come out of the event and there is a strong belief that this will lead Spain back to growth. Jose Ribes, chief executive officer of Rimontgo, explained: "Spain is at a crossroads, not only in having gone from boom to recession but also in that we have reached the end of a quantitative growth phase focused primarily on domestic drivers such as construction and large-scale infrastructural development. The new phase will require qualitative, export-orientated drivers such as technology, luxury products and high-value services."

This will also require a streamlining of institutions and legislation, in addition to investment in vocational education, linguistics, export skills and entrepreneurialism. "It is great to see that this process has already begun to gather momentum," Mr Ribes noted.

Improvement of these areas will theoretically lead to a decrease in unemployment, which has been noted as the overarching barrier to progress in Spain. Prime minister Mariano Rajoy is just one person who has targeted employment as the key way to boost the economy. In an interview with the Financial Times in January, he explained that job losses have led to many of the nation's problems, but labour reforms that make it easier for businesses to depart from region-wide collective wage agreements should help address the issue.

Under the changes, it is effectively easier for companies to make flexible deals at factory level, creating opportunities to expand workforces, while businesses can sack workers on fixed contracts without fear of significant backlash. This encourages a culture of hiring and will be key to getting Spaniards back in the workforce.

Spanish house price stagnation welcomed

Fri, 8 Feb 2013 10:16:09 GMT

Spanish property prices stagnated during January, marking the first month without a decline in three years. Research by Fotocasa.es and IESE Business School revealed that last month the average asking price of a home was €1,890 (£1,631 approximately) per square metre, compared to €1,891 (£1,632 approximately) in December. With the market in freefall since 2008, the news will be widely welcomed, indicating a possible return to stability in the future.

While the annual decline stood at 9.9 per cent, homes in Madrid actually witnessed an increase in value, rising by 0.3 per cent to €2,965 (£2,559 approximately) per square metre. This is 57 per cent higher than the national mean and bodes well for the Spanish capital economically. However, these figures should be viewed with cautious optimism, with the outlook for transactions failing to mirror that of property prices.

Hugo Navarro, a money manager at BPA Global Funds in Madrid, told Bloomberg: "It’s still a very illiquid market, and there aren’t many deals going forward at these prices. The real price, where sales can happen and that would be reflected in official valuations, is still about 20 to 25 percent below these levels." What's more, the Spanish government stated that it would scrap a tax rebate and raise value-added tax on new homes to ten per cent from four per cent as of January. This means that buyers will have been rushing to make purchases prior to this deadline.

Yet it seems wrong not to gain some pleasure from Fotocasa.es' latest figures and there are signs across the board improvements are taking place. In Spain's Autonomous Communities, several have experienced rises in the prices of second-hand houses. These include Murcia (one per cent), Canary Islands (0.7 per cent), Ontario (0.7 per cent), Castilla-La Mancha (0.6 per cent), and Valencia (0.1 per cent). However, Extremadura and Galicia have registered declines in the median price of resale property. Twenty-seven provinces also noted declines in monthly terms, ranging from 0.1 per cent to 1.5 per cent.

Bad bank releases distressed property

Thu, 7 Feb 2013 07:00:01 GMT

Spain's bad bank is releasing its first batch of distressed property. Also known as Sareb, the bank is now marketing real estate seized from troubled lenders in an attempt to cleanse their books of toxic assets, the Financial Times reported. Some 13,000 properties once owned by Bankia are to be put up for sale, which is hoped to make a dent in the €37 billion worth of troubled real estate taken on by Sareb in December from the four nationalised banks.

Slashing the volume of distressed property in Spain is a vital part of the country's property and economic recovery, but many believe Sareb's latest move is slightly premature. The bad bank is still consumed by internal debates over its business plan and there are those that doubt its ability to deliver results.

Already the plan, which was drawn up just a few months ago, is being revised. A spokeswoman for Sareb explained to the Financial Times: "The business plan is being adjusted because of the evolution of the portfolio, as we now have all the details about what it contains."

While this change isn't expected to affect the projected annual return on equity of the bank, which is set at a target of 14-15 per cent, nor the discounts applied to the assets, there is concern among experts. A source revealed to the newspaper that new managers appointed by the Spanish government's bank restructuring fund had begun to raise doubts in mid-December 2012. At this time, private shareholders were attempting to assemble capital to plough into Sareb, but attempts to change the plan agreed on during this process is causing uncertainty.

Nonetheless, concern over the amendments is perhaps premature, with the European Commission, the European Central Bank and the International Monetary Fund stressing the importance of a long-term business plan that is based on updated information. It has also been revealed that the rate at which bad loans are increasing is slowing and confidence is returning to sector. Foreclosed properties began to move at the end of 2012 and Bankia announced that it raised €550 million (£475 million) from selling these units, Reuters reported.

Low property prices seen in Spain

Tue, 5 Feb 2013 07:00:01 GMT

Statistics have shown that those looking to purchase real estate in Spain may be better set to pick up a competitive price, when compared to properties in other European Union (EU) countries.

According to figures from the EU statistical office, the prices of properties in Spain fell by 15.2 per cent in the third quarter of last year, the largest drop by any EU nation.

The country's market still remains attractive to many investors in terms of being able to secure properties for a reasonably low price, with a decrease of 1.9 per cent seen in the quarter when compared to the same period in 2011.

The general average of Eurozone countries was found to be 2.5 per cent for the same figure, meaning Spain can still secure a property for less than in many other nations.

What's more, the figures from earlier in 2012 suggest there has been a pattern growing for a reduction in value over the year.

In the second quarter of last year, there was a recorded drop of 14.4 per cent, while in the preceding quarter the fall was 12.5 per cent.

In terms of quarters, Spain's prices were found to be down, on average, by 3.7 per cent in the third quarter of last year, which is above the average decline of 0.7 per cent across the Eurozone.

It was only bettered by the 4.2 per cent and 3.7 per cent figures seen in Romania and the Netherlands, respectively.

A statement released with the figures read: "The evolution of housing prices is important for the purposes of our economy and monetary policy, particularly to monitor macroeconomic imbalances and risk exposure of the financial sector and is relevant to households, to measure changes in prices the largest component of spending and household wealth."

Interestingly, the country with the largest price increases in the third quarter of 2012 was Estonia, which had a rise of 8.4 per cent.

Next up is Luxembourg with 7.1 per cent, while Finland was up 2.1 per cent.

In terms of reductions, Ireland, the Netherlands and Portugal experienced big reductions alongside Spain.

Low property prices seen in Spain

Tue, 5 Feb 2013 07:00:01 GMT

Foreclosed properties in Spain rose in 2012

Sat, 2 Feb 2013 07:00:02 GMT

There was a rise in the number of foreclosed properties from Spanish lender Bankia's real estate sector last year.

According to the bank, sales of these sorts of properties totalled €550 million (£471,241,709) during 2012.

This represents a 19 per cent increase on figures seen the year before, with tax breaks largely being cited as the main reason for this sudden burst of enthusiasm in the market.

December was a bumper period for the bank, according to the news agency Reuters, with 1,100 foreclosed properties being sold in the month alone.

This was a massive 70 per cent rise from sales figures seen in November, and came just a few weeks before the bank had to move €22.3 billion of invaluable property assets.

These 'bad assets' were mostly taken on with an average discount of around 63 per cent while fellow bank Bankia Habitat reported the selling of some properties in 2012 with reductions of between 40 and 60 per cent.

Bankia Habitat also said that their year-end sales were given a big boost by the tax breaks on offer for housing purchases, which ran out in 2013.

It's hoped by many within the country, and those keen on buying Spanish real estate, that the decision to offload property assets for a lower value will allow the market to begin moving more freely again.

While there have been some turbulent times since the eurozone crisis began, there are indicators suggesting that the Spanish property sector could be on the move again, with signs of an increased interest from overseas and the actions taken to reduce the impact of bad, or toxic, loans.

Take for example, the recent research carried out by The Real Estate Agency which found a huge rise in the number of second homes purchased in the country last year.

It noted that there was a 90 per cent increase in sales last year.

Russians now the second biggest Spanish property buyers after Brits

Thu, 31 Jan 2013 08:12:59 GMT

A new survey has revealed that, while British buyers remain the most likely to buy property in Spain, Russians are fast becoming the biggest major competition.

Russian buyers are now the second biggest group in Marbella investment, overtaking their German counterparts, according to research from the Malaga Developer's Association, with those keen on investment having plenty of financial firepower.

It goes to show what a global reach the idea of property investment in the area has, with Russians making up nine per cent of buyers, ahead of the Germans with seven per cent.

British buyers have retained the top spot, with a huge 35 per cent but there is no doubting the growth of Russian investment in parts of Europe such as Spain.

Russian buyers have already purchased a wide range of luxury properties in European cities such as London before now and the signs are there for increased integration in Marbella too.

Indeed, there are plans in place for the largest Russian Orthodox Church in Spain to be built ten kilometres to the west of Marbella while local tradespeople are getting to know the language and the culture so as to cater to the market.

What's more, Spanish consulates in both Moscow and St Petersburg have seen a sharp rise in the number of staff needed in order to process visas for its countrymen wishing to visit Marbella and invest.

It could be that this investment upturn, coupled with the consistent demand from British buyers, ensures that the Spanish property market makes a recovery from what, in some areas, has proved a testing time.

According to the Global Property Guide, Tinsa's general price index had dropped by 10.8 per cent in June of last year, based on the same period the year before.

The index also found that house prices in Spain had dropped by around 30.4 per cent from the halcyon days of December 2007, suggesting there are bargains to be had in certain areas of the country.

Spanish property thriving in certain sectors

Fri, 25 Jan 2013 08:16:01 GMT

The Spanish property market is undoubtedly in trouble, but in certain sectors the outlook isn't so harrowing. The Real Estate Agency, the Spanish division of Fastighetsbyrån, claims that while as a whole the market is shrinking, second homes are booming. It seems that investors are now flooding to the country, looking to pick up bargain Spanish real estate.

This is good news for the property sector, with The Real Estate Agency reporting a 90 per cent rise in sale volumes during 2012. The UK and nearby European countries are proving to be the most active nations, but Swedish investors are also heading to Spain as their own country's economy goes from strength-to-strength. Unsurprisingly, the most popular areas are the Costa Blanca and Costa del Sol, which continues to attract tourists and those interested in holiday rental. New-build and resale property markets are also showing strong sales in these areas.

Daniel Nilsson, regional manager of The Real Estate Agency, commented: "The last 12 months have been very positive for us having received over 5,200 enquiries for Spanish property and conducting some 1,600 viewings. From this we have seen the volume of deals and revenue rise by 90 per cent and 104 per cent respectively in 2012 compared with the previous year. Those are not the sales figures of a dead market!"

It isn't just The Real Estate Agency reporting positive sales either, with Taylor Wimpey Espana also noting somewhat of a boom in the final quarter of the year. The Global Property Guide reported that Spain's growing number of tourists is helping to drive sales. In September 2012 alone, Taylor Wimpey Espana noted a 22 per cent rise in transactions compared to the same period in 2011. Gains were even greater in the Costa del Sol, with sales up 52 per cent in the year to September last year.

According to Mr Nilsson, one of the draws of Spanish property is that there really is something for everyone, no matter their budget. "Whether buyers are looking for newly built developments or more traditional Spanish resale properties (which 80 per cent of buyers purchased in 2012), choice and bargains abound," he said.

Bad loans still burdening Spanish property sector

Wed, 23 Jan 2013 08:05:14 GMT

Despite the creation of the bad bank, it seems that toxic assets are still blighting the Spanish property sector. Recent data from the Bank of Spain revealed that bad loans reached 11.4 per cent of debts in November - a record high for the country. Although month-on-month increases have slowed down, this is a continuation of bad loan rises that have become entrenched in the industry since June 2011, totalling €192 billion (£161 billion approximately).

This comes as the country hovers on the brink of the second tranche of its financial rescue package, with an International Monetary Fund delegation on its way to oversee the sector's restructuring. It was hoped that on January 20th, €1.9 billion would be given to the country to help it clear bad loans and toxic real estate. This is a vital part of the property market recovery and will - theoretically - enable the country to move forward.

However, not everyone is confident that the monetary injection will solve the country's problems. Javier Diaz-Gimenez, of the IESE business school, told the Irish Times: "Until Spain starts creating employment it’s hard to see how it will start reducing that number [of bad loans]." He is not the first to recognise the barrier unemployment poses to the Spanish property market. Prime Minister Mariano Rajoy told the Financial Times that the number of citizens out of work is the biggest challenge facing the country.

Throughout 2012, a further 426,364 people became unemployed. However, the end of the year brought with it some good news, with the number of people registered as out of work falling by 1.2 per cent in December to 4.85 million. This marks the first decline since July 2012 and was the best performance in December since records began in 1996. According to the country's labour ministry, it is women and first-time workers who are driving the decline in unemployment. Nevertheless, these figures should be approached with caution and celebrations put on halt for the moment, as only the next couple of months can reveal whether the tides have turned for the country.

Mariano Rajoy: Unemployment is Spain's biggest challenge

Fri, 18 Jan 2013 08:11:32 GMT

Spain's high unemployment is the biggest problem facing the country, according to prime minister Mariano Rajoy. In an interview with the Financial Times, he explained that job losses have caused many of the nation's problems, but labour reforms have the potential to ease the situation. Legislation pushed through by his government last year has made it easier for businesses to depart from region-wide collective wage agreements. This means flexible deals at factory level are possible, enabling companies to create the opportunities that allow them to expand workforces.

Labour market reforms also make it easier to sack workers on fixed contracts, which is thought to give employers the confidence they need to begin hiring. With Spanish borrowing costs falling for the first time since March, Mr Rajoy's policies are arguably on the right track. Standing below five per cent, borrowing costs plummeted after Madrid successfully launched a €71 billion (£58.8 billion) funding programme and the country sold €5.82 billion (£4.82 billion) of debt, which is higher than the original target of €5 billion (£4.1 billion).

However, further action is arguably needed to stem the tide of job losses and give the economy a boost. Addressing unemployment is also vital to solving the country's real estate crisis. Spanish property is in surplus and while overseas demand remains high, it cannot make a significant dent in the country's housing stock single handed. With domestic demand perennially low since the onset of the financial crisis, reversing the trend for unemployment will be key in ensuring citizens have the money needed to invest in real estate once again.

Nevertheless, Mr Rajoy is confident that the job market will once again pick up pace, telling the Financial Times: "Recent job losses have taken place in the real estate sector, in the financial sector and in the public sector, but in other sectors of the economy jobs have not been lost. So the labour reform has started to bear fruit." As for the constant criticism levelled at Mr Rajoy for his management of the crisis, the prime minister states that it is "pointless" to look back at his mistakes.

Foreign buyers preserving Spanish live market

Thu, 17 Jan 2013 07:00:01 GMT

Foreign buyers are helping to preserve the live market in Spain, but cannot absorb the nation's property surplus alone, according to one expert. During a radio interview on 9 Valencia, a spokesperson for Inmoaction explained that overseas buyers are driving activity, but the market is so saturated that even high demand from foreign investors can not significantly reduce housing stock - domestic buyers will need to enter the fray once again.

Nevertheless, certain local markets are performing well, with 2012 witnessing 2,501 sales transactions in Alicante alone. This is a first for the country and shows that despite plummeting property prices, there is still considerable interest in Spanish real estate. Malaga is also performing well, with 1,110 transactions. The Inmoaction spokesperson explained that this is the result of the "long tradition of foreign tourism" enjoyed by these provinces. "They are very classic and favourite areas, adapted to foreign lifestyle. Furthermore, their few cultural barriers have been diluted throughout the years," they said. Therefore it isn't surprising that in the penultimate quarter of 2012, demand increased by 18 per cent, with the British taking the crown of the biggest buyers.

However, it isn't just the UK that is active in the Spanish property market and France and Germany are hot on our heels. With overseas buyers soon to be offered residency permits in exchange for buying property over €160,000 (approximately £ 132,938), the Chinese and Russians are also likely to soon enter the breach, challenging traditional markets and increasing competition. What's more, Egyptians, Iranians, Vietnamese and South African buyers increasingly looking to Spanish property for bargain real estate, according to Inmoaction.

Nevertheless, British, German and Swedish buyers aren't expected to drop off the face of the Spanish property market any time soon. Inmoaction claim that these investors will "always be there" due to "geographical proximity", turning them into somewhat of a "floating population". Combined with Spain's thriving tourism industry, it seems that the country will always be able to rely on strong overseas activity.

Falling Spanish borrowing costs good news for property market

Wed, 16 Jan 2013 07:00:01 GMT

Spanish borrowing costs have fallen for the first time since March 2012, suggesting brighter times ahead for the country's property market and economy. On Thursday, January 10th the government's benchmark ten-year borrowing cost dropped below five per cent, after Madrid successfully launched a €71 billion (£58.8 billion)funding programme. Spain has now sold €5.82 billion (£4.82 billion), which is higher than the original target of €5 billion (£4.1 billion).

This comes as Mariano Rajoy's government continues to debate the benefits of requesting further European aid in a bid to bring down Spanish bond yields. After the debt sale, yields in the secondary market on the debt fell to just 4.90 by the end of trading, while yields on two-year bonds ended trading at 2.11 per cent. This is the lowest level recorded since November 2010 and bodes well for the country.

Spain's amazing debt sales may come as little surprise to observers, with demand at the auction high. Bid-to-cover ratio was higher than similar auctions for 2015 and 2018 bonds. This is despite new terms for Spanish debt being introduced, which include collective action clauses to reduce the ability of bondholders to fight against write-downs in debt restructuring.

For Spanish property, any easing in the country's financial situation is welcomed. While the impact of reduced borrowing costs will not be felt immediately, it will enable Spain to move towards a recovery and eventually place itself on a stable economic footing. This will lead to increased real estate activity, as domestic interest increases and challenges that of foreign buyers.

Nevertheless, in the short term, Spain will continue to rely on a rise in overseas interest in real estate to help reduce the surplus of housing that is contributing to falling prices. Luckily, the economic crisis has done little to deter foreign buyers, who are continuing to take advantage of cheap property prices. However, Spain is still a cash market, which is limiting sales in the country.

Take advantage of Spanish tourism boost with property investment

Fri, 11 Jan 2013 07:00:06 GMT

As British Airways launch a series of new flights to Spain, it seems the time is right for investors to take advantage of falling property prices and the country's lively tourism industry. With Spanish real estate struggling to recover values enjoyed during the 2007 peak, holiday rental properties are being let go at bargain prices, especially distressed assets.

However, interest in the country as a holiday destination isn't diminishing and the Costa del Sol and the Costa Brava are just two of the most popular spots for tourists. British Airways is set to run 17 flights per week from London Gatwick to Alicante from March 31st 2013, increasing to 21 flights per week for July, August and September. This means more and more people will be flocking to Spain in search of holiday rentals.

Marc Pritchard, sales and marketing manager at Taylor Wimpey Espana, stated: "Spain's climate, infrastructure, ease of access to the UK, combined with sandy beaches, turquoise seas and affordable housing market draws tourists and potential buyers in their droves.

"Despite falling domestic real estate prices, overseas demand for Spanish property certainly hasn't. If last year's performance of Taylor Wimpey Espana is anything to go by, with a record amount of sales in December alone, 2013 is set to be a great year!"

With interest in property investment still significant and JetXtra and Monarch also introducing new routes to Spain in 2013, competition for prime units will no doubt be fierce. While the country may be struggling to sell off real estate at the lower end of the market, this is not the case in other segments. Factor in a rise in the number of non-European buyers set to occur once residency permits are introduced for those buying property over €160,000 (£130,391 approximately), and buyers looking for investment opportunities have all the pressure they need to strike.

However, it is always important to research properties prior to engaging in any transaction to ensure the area can draw in the tourism levels needed to make real estate investment lucrative.

Buyer activity in Spain will increase in 2013

Thu, 10 Jan 2013 07:00:09 GMT

Foreign buyers are expected to increase their activity in the Spanish property market throughout 2013. Estate agent Spanish Hot Properties predicts a 50 per cent increase in turnover on 2012 levels, following a 25 per cent increase in sales and turnover last year. They claim this has largely been the result of improved Google-friendly websites that will continue to rank strongly as the market recovers. However, reports suggest that activity is picking up across the board.

Taylor Wimpey Espana also enjoyed a lucrative 2012, with sales volumes increasing throughout the year. During the first 11 months of the year, transactions rose by 30 per cent, while the first three weeks of December alone recorded a 375 per cent increase in sales compared to the same month in 2011.

So why then have the gains enjoyed by Spanish Hot Properties and Taylor Wimpey Espana not been replicated on a national level? According to Nick Stuart, director of Spanish Hot Properties, it seems the deciding factor is location. "Marbella is still a very desirable area of choice for international buyers, there is even a shortage of the best homes in key parts of Marbella and Puerto Banús.

"Considering its perfect location, at the southernmost tip of Europe therefore squeezing more sunshine hours and higher temperatures out of the entire year than the French or Italian Riviera ever will, not to mention direct year-round flight connections to Northern Europe, Russia, North Africa and North America, prices haven’t surged with such ferocity as they have on other elite coastlines."

This means that in certain key areas, the fortunes of the property market fare differently to other regions. Nonetheless, investor interest in prime spots has done little to bolster property prices and buyers can still snap up prime real estate cheaply. Mr Stuart explained that a two bedroom apartment that sells for €250,000 (£203,584) today was priced at €500,000 (£407,169) during the market's peak. Consequently, the country is prime for investment and it is hoped that activity levels will skyrocket further over the coming years.

Spanish property market "more realistic"

Thu, 3 Jan 2013 07:00:02 GMT

Those trying to sell property in Spain are becoming more realistic, making investment easier for potential buyers. Barbara Wood of Andalucia-based The Property Finders told Property Wire: “A real feature of 2012 was the increasing number of Spanish sellers finally coming out of denial and accepting offers they were previously turning down.”

As more and more people adapt to changing market conditions, a wider array of foreign investors are flocking to Spain to take advantage of historically low prices. This has helped contribute to a positive last quarter of 2012, which witnessed a strong performance across both high-end and low-end markets. Ms Wood claims that when the full year figures are available, there should be an approximate 20 per cent increase in overseas sales.

However, with mortgages still hard to come by, buyers with cash still have the monopoly over their competition and, as expected, they want prime inland and coastal region property. This means that the lower end of the market has not enjoyed as buoyant a year as other areas. To attract buyers, 2013 must bring with it a new wave of realism, with sellers that have “not reduced their properties sufficiently” lowering prices by between 30 and 40 per cent, according to Ms Wood.

This will help to sustain overseas activity throughout the country, which will form the thrust of the market, as domestic buyers continue to struggle with reduced salaries and 25 per cent unemployment, the news portal reported. “Much of the unsold stock will eventually be bought by domestic buyers but with unemployment predicted to remain at current levels or higher through 2014 it will be a long, slow process,” Ms Wood said.

“The number of mortgages granted during 2012 was about 35 per cent lower than 2011, falling for 30 straight months, although there is some growth visible in areas that attract the overseas market, such as Málaga,’ she added. Nevertheless, for savvy buyers and sellers, the Spanish property market still has lots of potential and it is this that will help to draw the sector out of the doldrums.

Spanish ski property down by 50%

Tue, 25 Dec 2012 07:00:11 GMT

For people looking to snap up Spanish property, there never has been a better time, with prices at their most competitive. But it isn't just ordinary homes that have become more affordable– the price of Spanish ski property has also fallen.

According to the real estate website Idealista.com, since the global financial crisis, Spanish ski property has seen its value drop by a significant 50 per cent, making it highly attractive for investors.

This is also reflective of a global trend in falling prices. The average price across the world has decreased by a significant 9.1 per cent since its peak in 2008.

While this might put some investors off, it is important to note that as the Spanish ski property market is forecast to pick up in 2013 and beyond, not only will such homes hold their price, they may even increase. It is therefore advisable to make the most of the current market options.

"Skiing remains hugely popular and is an annual must for many people – all of whom need somewhere to stay," commented Julian Walker, who runs ski property specialistskiingproperty.com.

"The nature of mountain resorts means there will always be limited supply of properties, and when you combine this with the premium rental rates ski properties command, it’s easy to see why ski homes retain value."

While the Spanish government is still fighting hard to remedy its deeply embedded financial problems, as well as address wider issues like mass unemployment – which currently stands at 25 per cent – there is optimism that 2013 will be positive all around.

The fact that the eurozone has been saved to all intents provides Spain with the secure foundations needed to boost the power of its economy and bring prosperity to all in the country.

In doing so, the property market as a whole will develop the robustness needed to help first-time buyers affordable homes, while investors will be able to capitalise on the benefits that come with security.

Carlos Slim buys distressed property portfolio in Spain

Fri, 21 Dec 2012 07:00:03 GMT

The richest man in the world, Carlos Slim, has given the Spanish property market a boost, by buying one of Caixabank's distressed real estate portfolios. On Tuesday (December 18th), it was revealed that the Mexican magnate, under the Spanish subsidiary of Inmobiliaria Carso, will acquire some 439 property units for approximately £358 million. Gross capital gains of £1.6 million are expected to be booked by the lender.

This is good news for Spain, indicating a possible change of fortunes in their quest to sell off distressed assets. Thus far, banks have had to significantly reduce the price of such properties in a bid to attract buyers. Caixabank's sale is the first step in clearing distressed assets off Spanish books. However, the bank has signed a sale and lease back deal with Inmobiliaria Carso, which gives them an option to buy back the property units.

Nevertheless, the sale hasn't exactly come out of the blue. Caixabank owns 20 per cent in Mexican financial group Inbursa, which is controlled by Mr Slim. The tycoon in turn is a minority shareholder in the lender, making the deal mutually beneficial.

There is confidence that the real estate deal will be the first of many distressed property sales. Bankers in Madrid said earlier this week that more deals in the sector are already in the pipeline for early next year, Reuters reported. However, distressed real estate is still selling at a massive discount. Anticipating such a situation, all banks have already made provisions for losses on toxic real estate loans or foreclosed properties.

Across the board, it seems the property market in Spain could be picking up. The Global Property Guide reported that confidence is returning to the Costa del Sol, with house builder Taylor Wimpey Espana recording a 74 per cent increase in sales so far this year. They explained that of their three specialist regions - Mallorca, Costa Blanca and Costa del Sol - the latter has been performing the best.

Spanish house prices continue downward spiral

Wed, 19 Dec 2012 09:18:13 GMT

Investors seeking bargain Spanish real estate have never been as spoilt for choice as they are at the moment, with property prices falling yet again. The latest figures from Instituto Nacional de Estadistica revealed that prices plummeted by a massive 15 per cent in the penultimate quarter of 2012. This is up on the second quarter, where a fall of 14.4 per cent was noted.

According to the Housing Price Index, this downward spiral is the result of a tight squeeze on credit, stalled demand and oversupply. Spain is also currently battling to come out of its second recession in three years, with unemployment increasing to over 25 per cent.

The largest property price fall was noted in central Madrid, where levels dropped by 17.9 per cent. Annual variation of new housing was recorded eight tenths lower than in Q2, standing at -13.6 per cent. Second-hand housing decreased seven tenths and went from 15.7 per cent in Q1 2012 to -16.4 per cent in the third quarter. The general index and type of housing were also registered at their lowest annual rate since 2007.

Annually, variation was negative in all Autonomous Communities in the penultimate quarter. The greatest decreases in variation were in Principado de Asturias (-17.5 per cent) and Galicia (-15.3 per cent, which witnessed decreases of 3.2 and 2.6 points respectively. The highest increases were in Illes Balears (one point), Andalucia (0.3 points) and Pais Vasco (0.3 points), giving them standing annual variations of -14 per cent, -12.8 per cent and -15.3 per cent respectively.

Quarterly variation was also negative, with the largest decreases once again noted in Galicia, followed by Cataluna and Communidad de Madrid. Galicia registered a fall of 5.1 per cent, while Cataluna and Comunidad de Madrid recorded variations of -5 per cent respectively. Conversely, Comunidad Foral de Navarra (1.5 per cent), Illes Balears (1.5 per cent) and Region de Murcia (1.6 per cent) noted the lowest decreases.

Time running out on low VAT on Spanish property

Tue, 11 Dec 2012 07:00:05 GMT

Those considering buying real estate in Spain are being reminded that time is running out to take advantage of a tax deduction.

Taylor Wimpey Espana is offering VAT of just four per cent on properties in several locations throughout Spain, which will enable buyers to qualify for half future Capital Gains Tax until the end of 2012.

Due to falling property prices and the strength of the pound against the euro, Britons are increasingly choosing to invest money in Spanish property. These conditions have also served to make real estate in the country accessible to a wider range of people, who previously would not have been able to afford property.

According to Marc Pritchard, sales and marketing manager at Taylor Wimpey Espana, 53 per cent of the company's property sales in November were made to UK clients. This marks the most sales made in a month to buyers from the UK since September 2011, signifying a possible market upswing and the return of investor confidence.

"It is not surprising for Spain to see the increase in foreign spending, and especially this year, as the country's tourism sector is experiencing an influx of vacationers," Mr Pritchard said. "These tourists are known to visit Spain mainly to improve their knowledge of the nation's property market before deciding to invest in it.

"The decline in real estate prices in some of the serene areas of the country has seen an influx of interest from foreign investors as more and more people believe that this is the best time to purchase a holiday home in Spain, and that too for incredibly cheap prices."

However, it isn't just Britons who are set to take advantage of the current Spanish economic climate, with the government targeting Russian and Chinese investors, the Global Property Guide reported.

Spanish trade minister Jaime Garcia-Legaz told the Times that foreign buyers will be given residency permits in Spain when buying property over €160,000 (£129,172 approx).

Balearics attracting Russian investors

Sat, 8 Dec 2012 07:00:01 GMT

Brits have long been flocking to the Balearic Islands to escape the cold, creating a thriving holiday rental market. However, according to new research, this region is now also receiving Russian interest, offering a wealth of new opportunities for those considering investing in real estate.

Sotheby's International Realty claims that after Catalonia, the Balearic Islands are the preferred destination of Russian tourists in Spain and for the first nine months of 2012, there were 102,121 visitors to the islands from this part of Eastern Europe.

According to Sotheby's this isn't likely to change any time soon. Anna Batizi, head of international sales for Moscow Sotheby's International Realty, explained: "Lifestyle is the single biggest draw for Russians when it comes to the Balearics. These are the perfect holiday Islands blessed with well over 300 days of sunshine a year, something that Moscow lacks to the most extreme extent.

"The capital, Palma de Mallorca, is vibrant and sophisticated, the Islands’ infrastructure well developed and the hundreds of kilometres of coastline provide perfect boating opportunities. Add 26 golf courses, 60 or more vineyards and a superior standard of living and little wonder my Russian clients are expressing a keen interest."

Sotheby's International Realty claims that the real estate market is also experiencing the benefits of the tourist boom, as Russians look to turn from holidaymaker to holiday home owner. Attractive prices are helping to drive this interest, with properties holding their own against their French and Italian competitors.

Demand is only set to soar with the implementation of a proposed new law to give residency permits to property buyers from outside of the EU. Russia is the prime target for these permits, with the Spanish government aware of its ability to attract investors from this part of the world. With property prices continuing to stay low, the environment is particularly favourable for buyers. The Global Property Guide reported that year-on-year to June 2012 house prices dropped in the Balearic and Canary Islands by 6.8 per cent.

Frob: Spanish property prices will rise in 2017

Fri, 7 Dec 2012 07:00:01 GMT

The decline in Spanish property prices has now been given an end date. The Fund for the Orderly Bank Restructuring (Frob) announced that the market will begin to recover in 2017, but probably not before.

They explained that house prices will fall for the next two years, stagnate for two years, then begin to rise at an annual rate of three per cent.

This is good news for those looking for long-term investment real estate, but those looking to sell property will have a few years of struggle ahead.

Frob claims that in 2013 prices will fall by 2.8 per cent in 2013 and 1.5 per cent in 2015. Land prices are expected to experience a similar downwards trajectory, falling by a massive 12.5 per cent in 2013 and five per cent in 2014. However, recovery is expected to begin in 2016, but the rate at which this will occur will be much lower than that enjoyed by the property sector.

It is estimated that land prices will increase by just 2.5 per cent per annum from 2016 onwards in Spain, which will have implications for developers.

The news follows revelations from the country's bad bank, which was established to swallow up distressed property in Spain, that new build properties that remain empty and have no viable market could be demolished. However, this will not occur until 2016, giving markets 2016 to turn their fortunes around.

Frob has also recently continued its radical restructuring of Spain's banking system, with Banco de Valencia approving its integration into CaixaBank. Banco de Valencia has been under the administration of Frob for over a year (November 21st 2011). During this time it has been operating normally with customers and creditors, helping to increase stability.

"This operation of integration into CaixaBank contributes to ensuring its financial soundness and guarantees its viability," Frob claimed in a statement. For those considering investing in Spanish property, the stabilisation of the country's banks will be welcome news.

Property sales increase in Costa del Sol

Thu, 6 Dec 2012 07:00:01 GMT

Property in Spain is always popular with foreign investors, but it seems that the Costa del Sol in particular is performing well this year.

According to Taylor Wimpey Espana, confidence in the area is increasing and the company saw a massive 74 per cent increase in sales so far this year.

Beating off competition from the likes of prime locations Mallorca and Costa Blanca, the Costa del Sol has witnessed the largest increase in sales from 2011.

Taylor Wimpey Espana claim that their Los Arqueros Beach site in Marbella has been selling in record time. Over 60 per cent of the luxury development has been sold off since its launch three months ago.

Marc Pritchard, marketing and sales manager for Taylor Wimpey Espana, stated: "Whilst the domestic market in Spain is indeed suffering, the second home market is back with vengeance.

"Overall we have seen a 17 per cent increase in sales to date in 2012 compared to the same time last year, but the 74 per cent increase in sales in the Costa del Sol is remarkable."