Kill Queen

Somewhat disregarding the many scandals and problems that have troubled the Spanish housing market in the recent past, the country’s Development Minister Mr Jose Blanco told people that buying a real estate in Spain is now safe.

Conveniently forgetting the many buyers from the UK who got affected by the illegal practices, the Spanish government has just issued anti-corruption measures that are designed to reassure potential buyers and are meant to help shift some 700,000 “safe” units of housing stock sitting on the books of Spanish banks.

The growing alarm at the over-supply of unsold new-built housing units has prompted Mr Jose Blanco to embark on a promotional tour across Northern Europe to convince potential buyers that the low prices and wide range of available properties in Spain are the perfect opportunity for an investment in his country. He may be excused for leaving out that the majority of the 700,000 properties on offer at the Costas have been vacant for the last three years, namely ever since Spanish real estate market virtually collapsed.

Mr Blanco pretty much pulled a veil over the scandals of the past, where hundreds of thousands of buyers from the UK fell victim to unscrupulous practices by developers and local councils and suffered as a result of a subsequent refusal to grant retrospective planning permission on land expats had bought in good faith. Unsympathetic banks were as much to blame as corrupt councils and inadequate legislation governing house purchases.

Jose Blanco was quick to dismiss the claims, saying that the number of complaints paled in comparison to the number of “happy purchasers”. According to Mr Blanco, unsatisfactory purchases represented merely 1% of the 850,000 sales transactions made by UK expats. He was equally quick to quell unrest by saying that those people, who were badly affected by the scandals, could look forward to being fully compensated by the Spanish government.

Spain’s government hopes that the new measures will kick-start not just interest in Spain’s housing market but in the economy itself, dragging the country out of recession. The combination of heavily discounted prices and new measures to protect buyers is aiming at a quick sale of as many vacant properties as possible.

Warning foreign buyers that these favourably priced properties won’t stay on the market for long, he urged them to act and to buy now, when the Spanish economy is beginning to show signs of a recovery. The country’s GDP rose by 0.6% in the final quarter of 2010 compared year-on-year and the trend seems to go into a growth direction at present.

More information and photos can be found at http://www.propertyinspain.net

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The Royal Institution of Chartered Surveyors (RICS) has brought a little cheer to commercial real estate consultants and investors with their recent findings. Published in the European Commercial Property Survey, their figures revealed that Spain’s market has started to recover in the second quarter of the year.

Indeed, since the survey was commissioned, there has been a deluge of requests for retail space and the number of occupiers seeking new retail space has actually risen for the first time. The survey also revealed a healthy new interest in investment in the retail property sector, so much so that RICS believe this will only increase in the next quarter.

Unfortunately, the survey also had to report that things are not as they should be in Ireland, Greece and Portugal, referring to their markets as peripheral, in that these countries have performed far below their European neighbours. According to RICS, parties from these countries, who were asked to contribute with their opinion, regarded the possibility of an improvement in their respective markets as rather slim.

Marc Da Silva, a freelance property journalist, recently commented that prices in the Spanish property market were far from having found their realistic level and he urged potential investors to hold off buying. Spain’s property market was bound to undergo further downward adjustment with the opportunity for even greater bargains waiting on the horizon.

More information and photos can be found at http://www.propertyshowrooms.com

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Officially the overseas property market may be in turmoil, but Spain is still the number one choice for British Expats seeking to relocate. The encouraging news is that website searches have increased one hundred fold over the last 12 months.

According to agency Prime Location June 2011 saw a peak with more than a 150% rise in internet searches for Spanish homes. Indeed, one in every three people looked for property in Spain, followed by interest in France, the United States, Italy and Portugal.

In a recent interview with The Telegraph, Anne Wright, international development manager at Prime Location, explained the British love affair with Spain thus: “The warm climate, great beaches and Spanish culture are all attractive.” Low cost airlines offering flights from the UK to all the popular destinations in Spain has been another reason for the country’s enduring appeal.

According to various reports published recently, Ms Wright’s estimation of the British Expat market is right, with investors from the UK seeking to make the most of current exchange rate advantages with regard to the Euro and perhaps also taking a more pragmatic view of the Spanish housing market.

Prime Location also discovered that people using their services are beginning to shift from holiday home owners to people seeking permanent relocation. It seems that one third of people are now tempted to live abroad, if a survey questioning 1,500 people is to be believed.

Some 23.7% of those asked were still seeking a holiday home, with 12% being more interested in an investment opportunity. The overwhelming majority, however, are seeking to decamp from Britain permanently.

More information and photos can be found at http://www.top-casa.com

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The most recent figures published by Savills confirm that Madrid’s central business district (CBD) is experiencing the first signs of recovery in the commercial real estate market.

The rate for vacant office space declined during the second quarter of 2011 to just 4.73%, compared to the rather depressing rate of 5.31% during the first three months of this year.

Savill’s survey also revealed that the absence of new building projects has prompted a surge of refurbishment projects by landlords across Spain, no doubt hoping to offer their properties as desirable rentals on the office space market.

“It’s a promising sign,” says Ana Zavala, Savill Madrid’s head of office, adding that the current state of Spain’s economy was still an obstacle with potential investors in commercial real estate.

The most recent European Commercial Property Survey, issued by the Royal Institution of Chartered Surveyors, covers the market developments for the second quarter of this year and suggests that property investment transactions across Spain are set to increase in the next quarter.

The first tentative steps into this direction are already being seen in the office building sector, where a few low level transactions have helped to keep yields steady since the start of 2011.

More information and photos can be found at http://www.propertyshowrooms.com

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The double blow of changes to mortgage taxation and the overall reluctance by lenders to grant mortgages in the first place put the brakes on a recovery of the property market in Spain during the first six months of 2011. Surprisingly perhaps, the high end property market fared far better than other segments of the housing market, or so new figures released recently suggest.

Luxury properties in Ibiza, at the Costa Brava and in Barcelona are being snapped up by cash buyers from overseas, as revealed by a survey conducted on behalf of Lucas Fox International.

Covering the first two quarters of this year, the report also revealed that the growing interest in investing in Spain comes from Dutch, Russian and Swiss investors and purchasers. The growth of tourism throughout Spain, but particularly in Ibiza, at the Costa Brava and in Barcelona also contributed the increase in demand for short term holiday rental properties.

Alex Vaughan, director of Lucas Fox explained the report’s findings as follows: “The lack of quality luxury apartments and houses should mean that prices in this segment of the market will remain stable. We predict that for the immediate future buyers will be able to secure Barcelona properties at competitive prices. Given the current economic conditions and lack of finance available to local buyers, international clients should be willing to hold on to their properties for longer as it will be several years before the next growth cycle.”

He went on to explain that, while the first six months of 2011 had indeed seen further price reductions on “key housing indicators in Barcelona”, the high end of the property market had remained static with regard to sales prices and had experienced modest increases in rental values for exclusive properties situated in central Barcelona.

Tom Maidment, director of Lucas Fox Costa Brava, concurred with these findings. “Demand for luxury properties continues apace, mainly driven by international clients from the Eurozone and a high level of demand for sea front villas from buyers from Russia and ex-Soviet states.”

The healthy demand for high end properties in the Costa Brava area provided a fair amount of protection against price drops seen in other areas in Spain, he added. Lucas Fox Costa Brava expect a rather positive outcome for the latter part of 2011, particularly in the sector of the €1 million plus market. He added that the luxury property market in Ibiza also had excellent prospects and that in that part of Spain at least a return to annual capital growth could be expected to start from next year onwards.

Buyers interested in making investments across a range of property sectors can also look forward to a number of government incentives, like the reduction of value added tax (IVA) on new-built homes for example.

Developers Taylor Wimpey España were quick to take advantage of this new tax ruling and said they would match this incentive with a further 4% tax reduction, which means that no value added tax will be payable on their new-built properties, provided the purchase transaction is completed by the time the government incentive runs out, namely by 31^st December 2011.

Mr Ignacio Osle, sales and marketing manager at Taylor Wimpey España, felt that, while the new incentive by no means solved all the problems of an over-stocked housing market in some parts of Spain, “it will stimulate action both with potential buyers who have been cautious to commit and the Spanish construction industry, which is extremely keen to get moving once again.”

He added that unfortunately second hand homes did not benefit from this new ruling and 8% IVA was still payable at the point of ownership transfer. Sadly not all of the new housing stock currently on the market qualifies for the IVA reduction either. Many lenders are left with repossessed housing stock that is not classified as “new” under the governmental guidelines and is therefore not eligible for the IVA reduction.

The very act of “repossession” in this case means a prior transaction may have taken place between the former owners (like the developers for example) and the lenders. Until this grey legal area is clarified, 8% IVA is payable on such properties.

“The government has seen that price reductions by developers and agents in some cities of Spain such as Marbella and Alicante, where there is over-supply, has helped to reduce stock levels and it is hoped that by lowering prices through the halving of IVA will reduce stock even further,” Mr Osle added.

More information and photos can be found at http://www.propertywire.com

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One of Spain’s top developers, Taylor Wimpey España, is offering not just substantial price reduction on some of their prime developments but are also matching the Spanish government’s cut on value added tax from 8% to 4% by marketing new-build properties with a zero rated TAX deal.

Trying to revive the failing Spanish economy with a number of measures, the Spanish government announced the reduction in IVA/VAT last week. Good news for developers who have a multitude of unsold, key-ready properties on their books. The new ruling stays in effect until the end of 2011 and a purchase of a key-ready home can be legally completed by then.

Leading not just with regard to the number of high-end developments built but also in imaginative ways of marketing them, Taylor Wimpey are the first among Spain’s developers to offer such advantageous deals. The developer will carry the cost of the 4% VAT levy for any purchase made by the official deadline from a choice of their developments.

In total, an investor who buys before the 31^st December 2011, can enjoy price reductions of an additional 8% on top of the already generous discounts being offered across Spain.

Some 20 properties located in Mallorca, Costa Blanca, Costa del Sol and various other regions of Spain are being made available for the zero rated TAX offer.

More information and photos can be found at http://www.propertyinspain.net

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