Investments in Spain - Properties, Real State, Golf & Business

The skiing season is coming.....

2007-12-04T13:05:00.000+01:00

Winter 2007/2008 looks like being a great season for Spain's skiing industry, with resorts from the Pyrenees to the Sierra Nevadas opening on December 1st.

Last year, the warm winter was pretty dreadful for the Spanish skiing industry. Many Spaniards enjoy getting onto the slopes in the fortnight before Christmas, but unseasonably warm weather meant there wasn't enough snow. This year, though, the country's best - and best-known - resorts are opening on the 1st December.

The Sierra Nevada ski resort is probably the one expats are most familiar with as it's conveniently located near theCosta Tropical, Costa de Almería and Costal del Sol. With a heavy snowfall last week and 120 snow cannons in operation, the resort is due to open on Saturday, although it's still unclear how many of the 87 kilometres of slopes will be open. Málaga and Granada are the most convenient airports - Granada is closer, but there are more flight options to Málaga. Many British expats or Brits who own holiday homes along Spain's southern coast enjoy a warm Christmas, heading up to the mountains for snow when they want it!

The resort that skiers claim has the best pistes in Spain, Baqueira-Beret, is also scheduled for partial opening on Saturday. The Pyrenean ski resort should have 13 kilometres of slopes and 11 ski lifts open, with snow at depths of 20 to 25 centimetres. If you're planning to visit this large resort (104 kilometres of piste when fully open), note that the nearest airport is actually Toulouse, just over the border in France. Also in the Pyrenees, Cerler, the highest resort in Spain, and Formigal, one of the largest ski resorts in the whole mountain range, are due to open at the end of this week with 14 and 11 kilometres currently skiable respectively.

The high altitude of central Spain means that the country has more ski resorts than you might expect. There's currently no news regarding opening from Puerto de Navacerrada, the ski resort between Madrid and Segovia, although if you're in Spain's capital you can always hit the artificial slopes at Madrid Snowzone.

Finally, if you fancy a better class of booze during your apres-ski, La Rioja has its own ski station at Valdezcaray. It's currently closed and there is no set date for opening as yet, but there's snow on the ground so look out for it opening in the very near future.

Source: Link

Spain Best for Long-term Investors

2007-07-30T13:47:00.000+02:00

Spain is the best market for long-term property investment ahead of France and Portugal – according to GE Money Home Lending (GEMHL).

The lender interviewed 100 mortgage brokers asking for short and long-term investment predictions. Bulgaria was seen as having the strongest house price inflation over the next year, followed by Spain, Portugal, Romania and France. Developing territories such as Dubai and Croatia also ranked highly. Florida placed strongly in both the short and long-term investment tables at sixth and fifth respectively.

Research showed that, overall, Spain still tops the list as the best long-term investment option. The lender advised agents and IFAs that findings showed clients are being influenced by a mixture of lifestyle and investment choices.

“Although new emerging Eastern European markets are looked upon as good short term investment opportunities, we can see that most Brits are looking towards their dream holiday home as a location they can retire to in future years and for ease of living whilst abroad,” said Gerry Bell, head of marketing for GEMHL. “What is interesting is the emergence of Florida as a key holiday home destination as flights to the US become more affordable, strengthened by the current excellent exchange rate and the ease of conversing in the same language.”

Best house price inflation – short-term v long-term

Over next 12 months

Bulgaria
Spain
Portugal
Romania
France
Florida
Croatia
Dubai
Italy
Germany

Long term

Spain
France
Portugal
Bulgaria
Florida
Italy
Romania
Dubai
Czech Republic
Croatia

Source: Link

Murcia - Spanish Property Hotspot

2007-07-26T10:29:00.000+02:00

Murcia is touted as one of the most upcoming regions in Spain, and property prices here are almost 50% cheaper per sq. m. than anywhere else in the region. Investors are beginning to see the potential of Murcia as an investment destination as millions are being pumped in infrastructure development.

Spain has been one of the top tourist destinations in Europe for many years. Many people have bought holiday homes in the sun; however, demand has now pushed prices in many areas of Spain sky high. Sure, the recent press on the market crash in Spain has also put a dampener on the average investor. But a little known fact is the market has only gone through a downturn in the Costa del Sol leaving the rest of Spain still ripe for investment.

In a recent Daily Mail article, Murcia was being touted as the newest hotspot in south-east Spain. Located between Alicante and Aguilas, this region has been slow to jump on to the tourism bandwagon. But it is making up for lost time. Anyone who has flicked through the Real Estate TV channel in recent times will have undoubtedly come across the “Next Big Thing” – Murcia. With 180 miles of coastline, unspoilt villages, and one of the balmest climates in Spain, any investment in Murcia today will reap excellent rewards in the next 18-24 months.

What makes Murcia an excellent investment today?

High speed rail link from Murcia to Madrid

New international airport which will be fully operational by December 2008

3 new motorway links already underway

180 miles of stunning Mediterranean coastline

Already established resorts like La Manga commanding very high premiums on rentals and resales

Large developers like Polaris World are pumping millions into various development schemes

In general, Spain has reported a significant rise in prices (around 28%) in the previous two years and, if you invest in the right property in the right location, you can still be assured of a healthy return on your investment. There have been some adverse comments in the media recently, regarding falling property prices in Spain. This is certainly true in some areas particularly Costa del Sol and parts of Southern Costa Blanca. The effect of over-build at highly inflated prices in these regions has resulted in the necessary price realignment. However, Murcia has remained untouched by these fears and is ready and waiting to be the next big thing.

There are various projects and resorts being developed in Murcia, especially targeting the tourist market. Certain properties on offer are at least 50% cheaper than what you can buy in the UK and significantly below prices compared to the Spanish regions mentioned above. One such investment is the Murcia Golf and Country Club. In its very early stages of development, this project allows for tremendous capital growth on the 6 million sq. m. site which will have low rise apartments, townhouses and villas surrounded by two 18 – hole golf courses with surrounding lakes.

There will also be 200,000 sq. m. of commercial centres, with numerous shops, restaurants, a 5 star hotel, and complete sporting facilities on site, including, communal swimming pools, making for all year round holidays and rentals.

Investors Provident are currently offering a mixture of apartments and villas on this project for prices considerably cheaper that the developer are offering on the open-market. Prices start from €89,950 for 840sq.ft. two bed apartments with instant equity of €10,000 on the open-market prices. When compared to properties in Bulgaria, prices here are even cheaper – less than €1,200 per square meter. Similar properties in the neighbouring Polaris World resorts are selling for over €3,000 per sq.m., making this project a steal!

Source: Link

Some comments about the Spanish Property situation.

2007-05-08T17:34:00.000+02:00

I got this article from the website http://www.eyeonspain.com. It is a very interesting analysis wich include some opinions from experts about the Spanish Property situation after the latest news.

The Death of Spanish Property

Did I grab your attention with that headline? Probably. That means I really should work for one of our famous British newspapers as it seems they are very good these days at instilling fear into Spanish property buyers, owners and investors.

You may have found it hard to miss all the negative press that the Spanish property market received last week in the British media. There were reports in the Telegraph, the FT and even The Sun joined in to cast a shadow over sunny Spain.

If you missed any of it then I’ll just summarise it here for you. It was started when Valencia builder Astroc’s shares on the Spanish stock market fell by an alarming 62% after the regional junta changed planning laws. Other property groups and developers then also started seeing drops in their share prices and the markets went into panic mode. Was this the start of a Spanish property market crash? Well, some newspapers would actually have you believe that.

The fact is that the two are actually unrelated. Developers and property companies losing market value does not represent a market crash. As the Spanish government have suggested, what we are seeing is purely an “adjustment”. I have to agree. Why were Astroc’s shares so high to begin with? They are probably at a much more realistic figure now.

So, has all this “doom and gloom” publicity brought on by the movements in the Spanish stock exchange and the media, signalled the death of the Spanish property market as we know it?

Instead of pushing my own opinion down your throats I felt it would be a good idea to get opinions from experts involved in the Spanish property market to comment on the goings on of the past week. Here are some of their comments:

Mike Knivett – Sunseeker Homes (www.sunseekerhomes.com):

In my opinion the comments are quite valid depending on whereabouts in Spain you are talking about, as we have seen over the last two years the market in the Costa del Sol and Northern Costa Blanca where prices had reached extremely high levels has slowed very dramatically and the focus of buyers has shifted to areas such as the Costa Calida, Costa de la Luz and Almeria.

These largely unknown areas a few years ago are now seeing much more activity as prices are significantly lower and you get far more property for your money.

As an example an apartment frontline golf in Murcia may cost 137,000 euros whereas in Marbella could be 350-400,000 for a similar property.

I have just reserved a property in the Costa Calida myself and am totally happy that I am getting value for money, especially as I want to use the property myself over the coming years.

In the UK we had similar predictions of doom and gloom and certainly in the south east of England the market has slowed as prices reached very high levels but in other areas such as the North West and Scotland the housing market is still racing ahead as the properties started from a much lower price level.

The thing to remember is that you have to seek out good properties in the best locations and at early release prices if you are buying off plan and do your homework before signing on the dotted line.

Campbell Ferguson – Survey Spain (www.surveyspain.com):

‘In the mid-1990’s, Spain’s property market was ‘Oh so slowly’ recovering from the worldwide recession, with the Costa’s having been very hard hit as the market had depended upon 2nd home purchases. However, the inherent natural assets were still there – sun, natural beauty, lifestyle and being the closest in a direct line south to most of colder Northern Europe and the inland mountain towns of Spain. The next decade, as world economies recovered, saw an exceptional list of circumstances boost the Costa’s property market to great heights –

External Demand

Cheap scheduled flights permitting ‘commuting’ from ‘home’ to ‘holiday’ location; o Computers, the internet and mobile phones enabling business management and other office work to be carried out from any location without loss of efficiency
Exceptional culture changes in Northern European countries encouraging emigration from them. Due to the above two points, permanent living on the Costas became possible whilst being able to still keep in touch with ‘home’ based family, business and social contacts.
Increasing prosperity creating substantial amounts of wealth ‘surplus’ to normal living requirements and available to be invested in property.
Poor performance of stock markets, pension funds, etc. resulting in loss of confidence in them as a place to save, with investment in property being a common alternative chosen.
A low value base providing examples of exceptional capital growth, with that then being projected on straight-line graphs to encourage substantial speculative short-term investment.

Spanish Demand

All the same to a greater or lesser extent as the External Demand. o Spanish banks offering mortgages for the first time on increasingly easy terms with regard to length, loan-to-value and loan–to-income.
Very low interest rates reducing the monthly payments.
Substantial equity being available in Spain in existing property due to few prior mortgages and a tradition of home ownership.
Cultural changes encouraging women to work and thus two incomes being available. Also ‘relaxation’ of traditional moral censure on unmarried couples living together and women living on their own.
Releasing of pent-up demand due to younger generations being able to leave the parental home and own a house.
Huge amounts of EU investment in modernising Spain.
Substantially improved internal road, rail and flight infrastructure enabling Spaniards to realistically have a weekend property on the coast.
The coming of the Euro and increasingly strong fiscal and money-laundering pressures ‘encouraging’ the legitimisation of substantial undeclared wealth through property development and ownership.
The Spanish bank’s having substantial ownership and/or control of development and construction companies, estate agencies and valuation companies, thus enabling them to ‘seamlessly’ transfer lending for the initial land purchase and construction on to the wider risk of the debtor base of mortgages to individual house buyers.
The ‘weight’ of money and resultant pressures on bank employees to lend it out, creating circumstances where pressure on tasadores to over-value ensures the loans go through, but creating immediate negative equity for the borrower. However, the bank is secure as they effectively have security over all the borrower’s assets and if these should fail it will be seen to be the tasador’s fault for over-valuing.
The borrower’s confidence that property prices will rise to redress any imbalance.
The construction sector being so dominant in the jobs market that there is no alternative for many employees. Thus they have to keep the development ‘bandwagon’ rolling to the next and the next developments, even if they ‘know’ that it doesn’t make financial sense as there aren’t buyers out there and the appraisals are overly optimistic.

Over the last two years, there has been an increasing awareness of the flaws in many of the above parameters and the weight of buying money has slowed back down to only those who want to own and occupy a property. That demand has been the steady core that will always be present. However, it’s not nearly enough to take up all the properties currently available and under construction. Thus, in order to make their property comparatively attractive, sellers have to reduce their price below that of the others that are also being sold on the urbanisation by other failed speculators!

So the market value falls and, once the financiers react to the lower values in their appraisals, the new developments will stop. Those owners and developers unable to sell and without capital to support holding the property for a longer term will ‘collapse’, with more property being offered at ‘forced-sale’ prices, which again will reduce the market value and so the spiral down will continue until all the property is bought by long-term owner/occupiers or ‘recovery’ investors. Those properties that are exceptional due to the popularity of location and/or attractiveness of specification will always be the least affected as their attraction to purchasers does not depend only on price.

In the long-term, property on the Costas will prove to be a steady investment as the natural assets will always be here, but like all other markets it depends upon timing of buying and selling. If selling, now is a time to face up to the fact that you’ve missed the high point, with a need to price realistically and sell quickly if you can. For the buyer, it’s a good time to be cash rich, enabling strong negotiation and purchase at below ‘market value’. However, remember that you are making the market and tomorrow the value will be the price that you paid!

Juliet McCann – Evergreen Homes and Investments S.L. (www.evergreenspain.com)

I have my own real estate company here on the Costa del Sol and having been here for many years now, I've seen some changes in the property market during that time. Going even further back though, I remember when my parents bought their first property here on the Costa del Sol back in 1974. How different things were then....they paid less than £10,000 for an apartment on the frontline of the beach and subsequently sold it some years later for 3 times as much. In those days of course, not so many people were prepared to 'take the plunge' and invest in a Spanish holiday home. Perhaps they thought it a little too risky. Some would say that it is only the shrewd ones who bought back then who are the ones to have made any real money from Spanish property and that the market is 'dead' here now.

I would disagree. I've heard that said time and time again about Spain and the Costa del Sol in particular. Yes, there has been recent negative publicity about the Spanish property market and how it is all about to 'crash'. This type of bad press and scaremongering has been going on for years and yet we are all still here and the people in pursuit of their new life in the sun are still coming to the Costa del Sol. Spain continues to be one of the preferred choices with those seeking to relocate or simply to own a sunny holiday retreat, not too far away from home and that will never change.

The property market here on the Costa del Sol has been extremely buoyant over the years and before there was a massive demand for off plan properties which were being snapped up for investment with the view to them being resold before completion. Many investors were buying vast numbers of units in the same development and were then left with properties that they were unable to sell. This has driven the prices up and many of the developers have become greedy and have therefore now priced themselves out of the market. The mass buying hysteria of recent years could only last for so long and eventually the market has to stabilise and that time is now. There are still some very keenly priced resale properties available. In addition to this, there are developers here who continue to offer off plan properties which represent really good value for money.

I'm pleased to say that some of the other developers have now realised that their prices need to be 'adjusted' in line with demand and the true market value and this is good news all round. Primarily there are two types of property buyers, your 'investors' and your 'lifestyle' buyers. Spain has always, and continues to, attract a steady stream of 'lifestyle' buyers because of what it has to offer. Apart from the fantastic all year round climate, it is just simply a great place to live! The local amenities and infrastructure are excellent and these are constantly improving in line with the EU regulations.

My business has always been about finding good value properties for my clients. By this I mean properties that are genuine bargains, where the owner is selling at a vastly reduced price and in many cases the banks are prepared to offer up to 100% finance on them. This is very different to over inflated prices which are then 'reduced to sell'. These are not a true reflection of the current property market at all. It is true to say that there is an oversupply of properties in some areas and there are bargains to be had. Everyone likes a bargain and this alone will always attract new buyers!

Chris McCarthy - Viva Estates (www.vivaestates.com)

The following comments were part of a press release submitted on 30 April 2007 by Chris McCarthy of Viva Estates....

Why a press release?

On 24 April 2007 a long expected correction took place in the Spanish stock market, where significant falls were recorded as the value of shares in many leading construction and property groups depreciated.

Within hours, Chris McCarthy personally and VIVA Estates generally were inundated with requests to comment on the market, from a wide variety of media from the Financial Times, BBC Radio 4 and other national and local press, to the web forum and online community, such as the highly regarded Eye on Spain website.

So diverse were the questions posed that the Company decided to present an issue by issue response, to help quantify and clarify the real story behind the headlines circling the world.

The main issues and topics covered herein are:

o Did the Spanish property boom end last week?
o Is the glass now half empty and getting emptier?
o Is the Costa del Sol overbuilt and oversupplied with property?
o Is property overpriced?
o Has it become a buyers’ market?
o Are there huge numbers of distressed vendor sales?
o Is it safe to buy in Southern Spain?
o When is the right time to buy? Are prices going to crash?
o What is the future of the Costa del Sol?

The response from VIVA Estates is presented by Managing Director Chris McCarthy.

Personal statement by Chris McCarthy

Who am I to comment?

For almost 20 years I have lived on the Costa del Sol, working exclusively in the property market. Ten years ago, in 1997, I outlined a business concept for, and founded VIVA Estates. Since then we have sold over 8,000 properties and have become by far the largest listing and multi-branch agent in Southern Spain, serving both pan-European and local clients.

During that time I have witnessed an impressive and total transformation of the Costa del Sol, a metamorphosis which has been gaining momentum since the early days of package holidays to Torremolinos back in the 60s.

I can state unequivocally that the Costa del Sol is a completely unique environment both in Europe, and in Spain itself, not simply with regard to property ownership but more importantly its long-term development of infrastructure and investment which has genuinely made the region the California of Europe.

It would be simplistic in the extreme to view the real estate market here in the context of one day’s activity on the stock market, or across one or two years’ rise or fall in overall property sales.

There is a much bigger picture than that, and I would hope I speak not only for VIVA Estates, but for the much wider community of people who, like me, are successfully, happily and permanently working and living life to the full in Southern Spain.

Response statements to the most commonly raised issues

Did the Spanish property boom end last week?

No. Not on the Costa del Sol. The most recent boom actually ended late in the first quarter of 2004, and it is a complete - yet perhaps understandable - misunderstanding on the part of the media to portray anything else.

Real estate sales activity on the Costa del Sol picked up rapidly in 1998 when, after several years of torpor, it began to race along on a wave of investment buying which built up and up to peak in 2003, when prices finally reached their upper limits and after intensive buying, market interest started naturally to decline.

What happened last week was a stock market fall - not a sudden collapse of property prices or interest in buying.

The media often relies on government statistics and official analysis, complemented by financial reporting and stock market performance. This data is not necessarily related to current activity, and is more likely to be a culmination of preceding years or a much wider Spanish economy perspective.

The actual reality of this fact therefore impacts on many of the other issues raised and offers the opportunity to look at the situation in a completely different light.

If the number of property sales and activity fell from three years ago…

Is the glass now half empty and getting emptier?

On the contrary it is half full and getting fuller. One should look at the mid- to long- term view. A classic example is Málaga Airport which, as the population on the Costa del Sol has exploded, has for years been straining at the seams to deal with 12 million arrivals and departures per annum.

It’s not so many years ago that previous redevelopment drastically improved visitor numbers and general access to the region, but now as anyone who has been through the airport in the past year can confirm, it is literally quadrupling in physical size, and with its new runway, from next year will be able to deal with in excess of 20 million arrivals and departures.

Can you name any other airport, neither serving a major city nor acting as an onward transit hub in Europe, that will handle this level of passengers? It is a staggering development and the project will shortly also be linked to a whole coastal railway system, much of it underground, that will allow people to travel quickly and efficiently from one end of the Coast to the other and right into the heart of the airport itself.

It is development on a grand scale and far exceeds that of any other European or Spanish holiday destination area. Together with the continuing expansion of road infrastructure - which in itself has been an astounding achievement these past ten years - and new high-speed rail links to Madrid and major Andalusian cities, it will utterly transform the whole area still further to become a highly developed cohesive region with a large city mentality surpassing any equivalent area in Europe.

The Costa del Sol is no longer simply a holiday destination, it is also a vibrant, developing residential area that tens of thousands of European and Spanish nationals aspire to live in and relocate to. Because it is completely unique, general issues relating to the overseas property market or to other areas of Spain do not apply.

Which brings us to the next, often misguided question…

Is the Costa del Sol overbuilt and oversupplied with property?

Absolutely not is the unequivocal, clear and definitive answer.

You can’t build an airport with 20 million arrivals and departures per annum, unless you have the capacity and scope to deal with that volume.

The build and development explosion that has taken place in the past ten years has been entirely appropriate and, I would venture to say, well planned and thought through from a mid-to long-term perspective.

From an aerial view of vast tracts of the coastal area it can easily be seen that many urbanisations extend no more than a kilometre or so inland, and from there the region is undeveloped all the way to Seville, a two-hour drive away.

We are talking about an immense and largely uninhabited area, for which there is more than sufficient land to house long-term development for another 40 years or so.

This is not the Costa Blanca where - unlike the stylish and appealing developments on the Costa del Sol with an average of 150 units in any one urbanisation - literally 1,000s of units on vast projects, create huge areas of concrete comprising high density, poor quality, small-sized properties along mile after mile of featureless and arid landscape.

Neither is the Costa del Sol remotely similar to the almost third world backwater of Bulgaria that is only taking its first tentative, some would say spurious, steps towards a future still some 40 years off. I hear the skiing isn’t bad and holidays are cheap enough, but whether that’s enough to make anyone actually want to live there and commute back and forwards as so many happily and so easily do on the Costa del Sol is another matter. In fact, could it really be the place where the notion and frenzy of overseas property investment will have its Waterloo?

It is naive and ill-informed to talk about overbuild or oversupply of property on the Costa del Sol. On the contrary, one could argue that the mid - to long-term boom has yet to begin.

This begs the next ongoing issue…

Is property overpriced?

Property prices peaked on the Costa del Sol at the end of 2003, having soared in value due to several factors.

First; because in 1998 the market had been undervalued and had been quiet for several years following the negative equity crisis in the UK and due to the fact that there was little build activity in terms of new projects.

Secondly; with a resurgent British market, and the beginnings of considerable development activity on the Coast due to low land prices, property began to look very attractive indeed, most especially as developers sought to sell off-plan in their initial stages and clients saw that early purchase would allow a sell on before completion and an opportunity to make a substantial profit.

Thirdly; a proliferation of marketers then responded to a welter of positive TV coverage in Britain on the merits of owning property overseas, with their own exhibitions and substantial advertising campaigns across the UK.

The market took off, and for everyone involved - vendors, buyers, developers, lawyers, banks, estate agents, and countless associated suppliers - there was a long and sustained boom that mirrored a similar scenario in the UK.

Yet for the Costa del Sol, that boom finished at the end of 2003, due to higher land prices, construction and labour costs, together with increased marketing costs. This was inevitable. The market had risen for six long years. It couldn’t last forever.

We have now had three years where the market has stabilised. Government statistics may appear to show that prices have increased but in large part this is due to many developers selling on reservation in 2003 and completing on purchase up to 2006, when the transaction was recorded.

The truth is that the sheer volume of buyers has decreased externally by around 60%, which has not been a bad thing at all.

Developers have got on with completing their projects, many agents who sold solely on price point and investment have been off elsewhere pitching their whole off-plan, flip to win scenarios in Bulgaria et al, and quietly and happily thousands have been enjoying holidaying, living and working on the Costa del Sol.

A new dynamic has been progressing, and the future of the Costa del Sol is yet again about to transform itself still further, but not for those with their heads buried in the sand.

Prices rose to dizzying heights in 2003, but what people fail to understand is that developers then pulled back from those heights, and quietly engaged in price reductions of phases, discounting units on completion, and gradually stepping back from the brink.

Vendors reselling their properties over the past three years have recognised that they would not be able to achieve the three or four times value that they could have expected if they had purchased before 1998, and were happy to sell on at a level below that of the new builds for a reasonable and sensible price, knowing that buyers would be receiving real value.

If the market was overpriced, we would not be able to sell property. Yet we continue to do so, and now with higher recorded sales levels and appointment activity than in the past two years. We are actually seeing a resurgent and new market appearing, and for very good reasons…

Has it become a buyers’ market?

Yes it has.

There are any number of projects still in construction on the Costa del Sol, which have had to become price competitive and react to the market they are in; while developers are building a higher quality and standard of product that is available to buy on, or near, completion.

Purchasers can see, understand and use what they are buying. They simply won’t buy, nor need to, unless it is the right property at the right price.

Finance packages, and many other creative or supportive purchase elements are all the more readily available and are shown to be affordable. There is a real excitement now about what is on offer.

As developers have levelled out their expectations, and far fewer cranes and build projects are visible on the Coast, then, too, the resale vendor has to appreciate that he must also compete in the market. If he or she truly wants to sell, then they must offer great value, too.

Are there huge numbers of distressed vendor sales?

No there are not.

We can see this most clearly in the fact that over the past seven years, and despite huge sales volume, we have seen no appreciable change either in interest or in the number of vendors wishing to resell their properties with our own company, VIVA Estates.

There is no panic selling, it just does not exist. In the early to mid 1990s there were distressed sales - through auctions, repossessions and the like - but that has simply not returned and nor is it likely to.

Why?

Well, interest rates have remained low, and while they will inevitably increase over time, they have not made the original decision to purchase unaffordable or too heavy a burden on the owner.

Those who have bought on the Costa del Sol gain massive use and personal lifestyle fulfilment and benefit hugely from their purchase. The extent to which people love the Coast, and love living or having a home here, is perhaps not completely understood or accepted by those who do not.

All the reasons why people bought here – beyond a simple investment – are being improved upon year in and year out, not only as we said before the overall infrastructure, airport expansion and the like, but in the local development of hospitals, schools, shopping centres, amenities and all the facilities that have again utterly changed the face of the Coast in recent years.

Remember, you can fly here from the UK in a little over two hours, and we have around 320 days of sunshine each year. Yet you can watch the same TV programmes as you would back home, work on your PC or lap top and be reached on your mobile ´phone in just the same way as if you were in your UK office.

People do not want to sell.

They want to own a property here, and they want to literally sit on their investment. Relaxing on their terrace, looking out over the sea, golf course or the stunning countryside, and savouring a glass of vino tinto, not only are they appreciating their investment, but their lifestyle experience, too. Could they say the same about the stock market, pensions or some far-flung, undeveloped overseas alternative?

They are neither distressed nor desperate, they are enjoying themselves.

When they do want to sell, for whatever reason, they recognise that it is a buyers’ market, and that they should price their homes accordingly.

And now that’s precisely what they do.

Is it safe to buy in Southern Spain?

In the past two years, both the regional Junta de Andalucía and the national government in Madrid have launched a massive crackdown and campaign against corruption, planning irregularities, money laundering and tax evasion.

Special prosecutors have been appointed, town halls have been turned upside down and taken over, and all manner of public officials, businessmen, developers, lawyers, notaries and others have either been arrested or called to account for their affairs or actions.

It has become a fascinating soap opera of events, with blanket coverage on national television as well as filling the pages of the international press as each wave or operation is launched and fresh activity undertaken.

What does it all mean to the local resident, the potential buyer?

Quite simply it means that Spain is demonstrating in considerable measure its status as a mature, stable and wholly democratic country, with all the attendant care and concern for the rule of law and therefore the protection of the individual’s civil and personal rights.

In truth, it has been a fantastic time for the future of Southern Spain.

The country is still a relatively new democracy - many people forget that it only became so less than 30 years ago, and that since 1992 Spain has been rapidly developing as a full and increasingly equal partner with the major economies of the UK, Germany and France.

Now, the full weight of that democracy and care for its future has been applied. Planning abuses are being tackled, banks are becoming far stricter in their secured lending, and lawyers have to be rigid in their professional practice to ensure that clients’ rights are fully protected in purchasing a completely legal and fully registered property.

The various scandals and reports of corruption have given all involved in property and construction a cold shower, and the dénouement is simply; that Southern Spain is now one of the safest and most secure places in Europe in which to buy.

In fact, what has occurred in the past few years may well be viewed as the real making of the Costa del Sol, bringing about a level of confidence and security which frankly would be hard to equal anywhere beyond the major European states.

What price the current opportunity for corruption and malpractice in all manner of other overseas markets? What redress and effort will be put into challenging those areas to change? How well will Southern Spain come out of this by future comparison?

When is the right time to buy? Are prices going to crash?

In our honest opinion, the right time to buy is when the purchase is affordable, makes good sense to you and your family, when the property is the best available in its price range, works for you as an investment, is something that you know you will able to live in (or rent out), sell on, and which fulfils your financial, lifestyle and future aspirations.

The time to buy is now, if your inclination to purchase is matched by the above criteria. If it is not, then simply do not buy, but what is available today, may not be there tomorrow. Nor can you automatically expect it to be at the same price, and most importantly the real value of time itself, and the benefits of ownership and usage, will have certainly passed irrevocably by.

Property prices are not going to crash, they have already fallen in real terms over the past three years. We know this from our own detailed accounts which have been fully audited by KPMG these past six years.

We are at the frontline of what happens in the property market, we deal with the buying and selling of homes day in and day out, we are months, even years ahead of any government or other statistical analysis, which is drawn ultimately and belatedly from our own revenues and performance.

Is the average value of a UK home going to fall 30% from £200,000 to £140,000? No, it is not, and the same can equally be said for our own area. We have again an increased demand, we do not have an oversupply, we have a clear and dynamic future, and we do not have clients in desperate need to sell.

What we have, which was the purpose of this press release to rationalise, is a media which quite naturally wants to feed on the headline-grabbing notion of an end to the property boom, and which is beguiled by the drama of a stunning property collapse.

Well, we have already said our boom ended three years ago. We do not have a collapse in prices and we do have a great future, but this does not mean that the market did not downturn or that people are not being practical and cautious.

However, that in itself presents a great opportunity for those who are buying property here today. There is a time to be smart and ahead of the field, or not to go where others are following the pack.

Warren Buffett, the world’s richest man for many years, and acclaimed as the greatest investment guru and practitioner ever known, had it right when he said, “Most people are interested in stock when everyone else is. The time to get interested is when no one else is. You can’t buy what is popular and do well.”

Then, too, Mr Buffett had some other perspectives on our position, when responding to a supposed doomed market situation he said his philosophy was that “We simply attempt to be fearful when others are greedy and to be greedy when others are fearful..

And not to belabour the point, but perhaps to round off our view on when is a good time to buy, if we take the liberty to paraphrase Mr Buffett by substituting the word ‘company’ for ‘location’ to match our purpose, “It is far better to buy a wonderful location at a fair price, than a fair location at a wonderful price.”

The last ‘best time to buy’ on the Costa del Sol was probably between 1995 and 1998 prior the last boom. Perhaps logically, it will be the case that those buying today, will in time to come, be judged to have been the smartest of all buyers.

Especially when you consider the future that lies ahead.

What is the future of the Costa del Sol?

Golden, it’s as simple as that.

It will have its ups and downs, which is only natural and cyclical. Yet for all of the above and so much more that could be said, the Coast could easily be described as being at the culmination of decades of preparation, and therefore now in a state of readiness for an explosion of growth and continued development as the ‘California of Europe’ that it already represents for thousands.

Its progression has been ever upward and onward, and mid- to long-term that is quite frankly unstoppable by any stock market correction or a momentary lull in the property market.

Ask the people who are successfully, happily and permanently working and living life here to the full, and you will find a consistent and resounding answer that they just do not wish to be anywhere else.

Thank you to all those that have taken the time to provide comments for this article.

Chris McCarthy - www.vivaestates.com
Juliet McCann - www.evergreenspain.com
Campbell Ferguson - www.surveyspain.com
Mike Knivett - www.sunseekerhomes.com

2007-05-05T00:02:00.000+02:00

As fears grow in Spain that the housing market bubble will burst, should you sell up or hold tight?

Half a million Britons who own properties in Spain are being urged to hold their nerve after experts warned of an impending property crash that could wipe tens of thousands of pounds off the value of their holiday homes.

The Organisation for Economic Cooperation & Development warned that prices are now 30% overvalued as evidence grows that the decade-long boom in Spanish property is about to go bust.

Britons who have recently invested on the Spanish Costas could face steep losses if the predictions are correct. There are also worries that those who have bought into future developments could be left high and dry.

Analysts believe that most will be able to weather the downturn. Stunning gains over the past decade mean that anyone who has owned a property for five years or more should make a profit even if house prices plummet. For Britons considering a Spanish holiday home, a collapse in the housing market could create a golden opportunity to pick up a bargain.

Spain has long been the favoured location for Britons buying abroad. Nearly 32% of people who bought an overseas property last year opted for Spain, according to the AIPP international property market report, compared with 19% who bought in France, the second most popular country.

About 500,000 people have either retired there, or bought second homes or investment properties. Most have opted for coastal locations on the Costa del Sol, Costa Brava and Costa Blanca.

Over the past decade buying a property in Spain has been an almost sure-fire way to make money. The boom in the Spanish housing market has been even more spectacular than the one here in Britain. Property prices have risen by 270% over the past decade, compared with 209% in Britain.

Last week fears that the boom is over were sparked by panic selling of shares in Spain’s property firms on the Madrid stock exchange. On Tuesday, Spain’s leading stock-market index, the Ibex 35, fell nearly 4% while property shares plunged 20%.

The Spanish finance minister sought to reassure investors that the wobble in financial markets was unconnected with the strength of the housing market. He said the government still believed that house prices were heading for a soft landing rather than a crash. Many economists are not so optimistic.

Charles Dumas, chief economist at Lombard Street Research, an economics consultancy, said: “The country is overhoused, people are overindebted and the construction industry continues to churn out homes. The housing market in Spain is about to implode.”

In some areas the slowdown is already under way. Despite fears of a crash, properties have continued to be built in their thousands. With so much development, homeowners trying to sell properties that are only a few years old have been struggling to find buyers.

Mark Stucklin at Spanish Property Insight, a website that provides advice for people buying in Spain, said: “The market in the coastal areas, which are popular with the British, has been difficult for a couple of years. There was a real boom here, but this led to huge levels of development and supply is exceeding demand. Prices have already been slipping and many new properties are being sold for the same amount as those built two or three years ago.”

Britons who have bought property off-plan are particularly vulnerable if prices slide. Buying in this way means you commit to somewhere before it is built. It has been a popular option with speculators who intend to sell the property on when it is complete, netting themselves a profit. In a rising market this can be successful, but if prices slow they could end up with an investment worth less than they paid for.

Tim Hodges of The County Homesearch Company, a property finding firm, said: “Fundamentally, I think there needs to be a correction. The two-bedroom apartment market is most at risk because there is a glut of supply. “I would estimate that there is probably a 15% to 20% oversupply of apartments across the coastal regions.”

People who own property in Spain and are already thinking of selling are being advised to get out now before big price falls. For those who are thinking of buying, some analysts believe there will be good investment opportunities – if you wait and then choose carefully.

Hodges said: “I think there will be significant opportunities in villas that were built 15 to 20 years ago. The owners will have seen the value of their properties surge over that time, so the smart sellers will discount prices in order to shift them.”

Katy Katani at Grupo Lar Sol, a Spanish property developer, thinks the top end of the market will be less affected by the slowdown. She said: “I don’t think high-quality areas, such as the west of Marbella, will be badly affected although eastern Marbella and towns in the southern Costa Blanca, such as Torrevieja, could be hit because they are so built up.”

For many existing homeowners the simplest option is to sit out any downturn. This is what Cheryl Edwards, 42, pictured with her two daughters Sian, 13, and Alisha, 7, intends to do. Edwards owns a two-bedroom apartment in Villamartin on the Costa Blanca which she and her husband Chris bought three years ago.

The personal assistant from Walsall in the West Midlands said: “This is a holiday home for us and we are not planning to sell. You have to be slightly concerned about talks of price falls, but we like the location and still believe it will be a good investment over the long term.”

Tips for dealing with the fall-out

If you are planning to sell, you may have to accept a lower price than you would have achieved this time last year.

However, if you have owned the property for more than five years you should still be selling for substantially more than when you bought.

People who have bought in the past three years or have invested off-plan with the intention of selling it on completion may already be nursing a loss.

Unless you have to sell, it is probably worth waiting for prices to recover.

Do not expect the strong returns that have been seen over the past decade. Low single-digit returns are more likely from now on.

I was thinking of buying a property in Spain. Is it still worth it?

Experts recommend that you hold off until the situation becomes clearer, but a property slump could throw up some bargains.

Andrew Benitz at Titan Properties, a property investment adviser, said: “The market is undoubtedly swinging in favour of the buyer, and astute investors who do their research will be able to secure some fantastic properties as the market softens.”

Source: Link

Spain Second Best in the World with Tourist Infrastructure

2007-03-30T11:09:00.000+02:00

The World Economic Forum has highlighted the "impressive" growth of the tourism over the years in Spain. In its report on the competitiveness of travelling and tourism in 2007, the organization placed Spain at number 15 at a general level (among the 124 member countries). When it comes to tourism infrastructure the WEF put Spain in second place in the world, behind France and Spain also came second in terms of natural and cultural resources, this time behind Italy.

Source: Link

How to avoid Overpaying when you buy Real Estate in Spain...

2007-03-16T13:44:00.000+01:00

Many foreigners pay more than is necessary when buying property and property related services in Spain. Being on unfamiliar ground they find it difficult to judge if they are being charged reasonable prices. This in turn motivates companies to exploit the opportunity. So do yourself a favour and swot up on the main ways you risk paying more than is necessary.

It looks like a bungalow but it's priced like a palacio

Prices for Spanish property are at historical highs after the last few years of increases (for more information see the latest Spanish property market report). However that doesn't justify all 'high' prices, and the asking price of any property should be evaluated in terms of its market context and in comparison to other similar properties in the area (referred to as 'comparables').
Many properties for sale to foreigners in Spain are actually overpriced in terms of their market context and comparables. This is especially true of the resale market where individual sellers largely decide the asking price, but can also be true of new developments. Estate agents often allow sellers to 'name their price' rather than give them a professional evaluation of the true market price.
There are various reasons why a property might be overpriced. Vendors sometimes set an unrealistically high asking price in the hope that

a) someone might actually pay it and b) that it will give them a stronger negotiating position at the start and ensure that final transaction price is higher than it would have been had they started with a lower asking price. Another reason is because some sellers have unrealistic expectations as to what their property is actually worth. A further reason is because agents and / or developers sometimes increase the price if they think that foreign buyers are and will remain 'ignorant' of market values. This is more likely in those cases when the agent 'controls' the entire visit of the buyer thus preventing them from finding out what comparable properties are worth.
To say that a property is overpriced is not the same as saying that it won't sell at that price. The great tragedy is that people do actually buy overpriced properties on a regular basis. This is bad for the overall market as word often gets around, driving up the expectations of sellers and reinforcing the suspicion that foreign buyers will pay any price.

So how do you avoid overpaying for a property in Spain?

1) Gain market insight
Do your research and look around. Try to get a feel for market prices in the area you are interested in. The internet is a useful tool for basic research but it is no substitute for going to visit different properties and talking to impartial people with a good understanding of the Spanish property market. Take notes of the key features (size, location, condition, views, price etc) of different properties and compare then in a table. No two properties are exactly alike, especially in the resale market, and there is no such thing as a mathematically-proven correct price. Nevertheless by doing your research and approaching it in a rational way you should be able to identify if a property is more or less correctly priced given its market context.

2) Use a good real estate agent in Spain
Spanish real estate agents spend their professional lives looking at properties and witnessing how much they sell for. If they are competent they should have a better idea than anyone else as to the fair market price for a property. If they have high professional and ethical standards they should help both buyer and seller agree on a fair market price (notwithstanding the fact that they are paid by the seller). It is crucial to use a good estate agent with high professional and ethical standards if you are to avoid overpaying or even more serious problems.

3) Take into consideration all factors
Even the price of the most basic goods such as commodities change frequently in response to many different factors. The same is true of property in Spain or anywhere for that matter. The price that the seller will agree to exchange at (rather than the initial asking price) could be influenced by many things that might not be obvious at first glance. The time of year, the length of time that the property has been on the market, local market conditions, political developments, the attractiveness of the property in comparison to comparables, the age and other personal circumstances of the seller (not always easy to find out), to name but a few. The more information you can find out about a property, its vendor, and the local market the greater your insight and hence negotiating power.

4) Don't be afraid of robust negotiations
In the Spanish real estate business German buyers are famous for demanding high quality construction and finishings and the Dutch are famous for being very tough negotiators when it comes to price. British buyers, on the other hand, are famous for not saying what they really think about a property and for kicking up remarkably little fuss about price. Needless to say in general the British pay more for Spanish property than the Dutch and don't get the quality that the Germans do. Unless you push for something you are unlikely to get it, so cast aside your traditional British reserve and negotiate hard. Having said that knowing how to negotiate skillfully is equally important and will produce the best results

Source: Link

Estepona, the new british football village

2007-03-05T19:38:00.000+01:00

Its uniqueness stems from the fact that it is exclusively endorsed by and officially linked to many leading UK football clubs including Aston Villa; Bolton Wanderers; Celtic; Newcastle United and West Ham United. The Village is set to become Europe's leading golf leisure and fitness resort.

The development is also endorsed by England Goalkeeper, Paul Robinson; Golfing Legend Seve Ballesteros and Sky Sports' presenter, Jeff Stelling, all of whom have already purchased at The Village.

The Village is located just one mile from the centre of Estepona on the Southern Coast of Spain and will be a gated community of fully furnished apartments starting from £146,000 rising to £204,000.

Record Numbers of Foreign Tourists Visit Spain in January

2007-03-02T12:37:00.001+01:00

Spain enjoyed its best January ever for foreign tourists visiting the country with 2.8 million travellers coming to Spain, a 4% increase on last year. A quarter of the visitors went to the Canary Islands, even though numbers there were 2.4% down. There was a 7.2% fall in the number of Britons who came to Andalucia last month, but an overall increase in numbers in the region of 5.4%. Valencia welcomed almost 272,000 visitors, a 4.6% increase.

Source: Link

A strong Pound makes this an Ideal time to invest...

2007-02-20T13:51:00.000+01:00

British citizens emigrating abroad could collectively be losing hundreds of millions per year through poor exchange rates and over inflated bank charges. The British Pound is currently very strong against the Euro at 1.51 to 1.00 on 15th January, making now THE ideal time to invest abroad.

Watch Those Exchange Rates!

Please dont forget that exchange rate volatility plays a key role in your Sterling transfer when purchasing large amounts of currency for your property investment abroad. It is not uncommon for currencies to fluctuate by as much as 10% over relatively short periods of time so it is important to monitor exchange rates and secure your rate in advance to protect yourself from losing vast sums of money on the day of your transaction.

However, many overseas property buyers overlook the importance of securing a good rate of exchange, while using reliable foreign exchange dealers such as MoneyCorp will literally save them thousands on the day of their transaction, from the transfer of an initial reservation fee, right up to the final payment on your property. For example, today, 15th January 2007, Sterling was strong against the Euro at 1.51 to the pound, while less than two weeks ago it stood at a mere 1.42 to the pound. By arranging their funds today, wise investors have secured this favourable rate of exchange, which can even be fixed for a period of up to two years, allowing them time for the payment of off-plan investments if necessary.

An average UK family moving abroad with assets of 250,000 could loose up to 10,000 of their funds simply by transferring their money abroad on the wrong day because they didnt pay careful attention to their rate of exchange. Without a doubt, this represents a huge loss which could be avoided simply by being aware of professional money exchange brokers, such as MoneyCorp, who will secure you the best rates.

Source: Link

Valencia New Property Prices still Rising

2007-02-13T16:25:00.000+01:00

According to one of Spain’s most prestigious valuation companies, the price of new build property in Valencia city increased by 15.6% in 2006 and the average price per square metre now stands at €2,211 which is still almost half the price of new builds in Madrid and Barcelona. Valencia is Spain’s third largest city with a population of around 800,000 that increases to 1.5 million within a 30 km radius.

Sociedad de Tasacion S.A. has more than 20 years experience in the valuation sector. Last year it valued both property and businesses worth more than €89.6 billion.

In its study of the new build market in “Spain’s 50 Provincial Capitals” it concluded that prices increased by an average of 9.8% during 2006 with the average price per sqm now standing at €2,763.

Its prediction for 2007 is that prices will continue to rise albeit not as strongly as in 2006. Increases will be more moderate especially in areas with a good supply of available building land.

The data which was used in the survey came from 315,000 properties in 7,600 different developments. Properties of more than 150 sqm and less than 60 sqm were not included nor were attic apartments due to the distorting effect which the inclusion of such properties would have given the sizable terrace space that they tend to have. Detached houses were also excluded.

In addition, the company also provides data relating to the annualized return over the last 21 years, the average annualized return being 10.7%.It estimates that there were more than 800,000 home starts in 2006.

The data regarding Spain’s 6 largest cities are as follows:

Madrid new build prices are now at €3,870 per sqm, an increase of 6.6% in 2006 and an annualized return of 10.6% since January 1986.

Barcelona new builds are now at €4,192 per sqm, an increase of 13.3% in 2006 and an annualized return of 13% since January 1986.

Valencia new builds are now at €2,211 per sqm, an increase of 15.6% in 2006 and an annualized return of 10.9% since January 1986.

Seville new builds are now at €2,445 per sqm, an increase of 15.4% in 2006 and an annualized return of 10.5% since January 1986.

Zaragoza new builds are now at €2,851 per sqm, an increase of 17.4% in 2006 and an annualized return of 11.5% since January 1986.

Malaga new builds are now at €2112 per sqm, an increase of 9.9% in 2006 and an annualized return of 8.6% since January 1986.

In conclusion, new build property in Valencia city still represents excellent value for money when one takes into account the fact that it is a good 20% cheaper than the average price per sqm in Spain’s 50 Provincial Capitals (€2,211 vis a vis €2763). It is almost half the price of new builds in both Madrid and Barcelona, being 43% and 47% cheaper respectively.

When one also considers that Valencia will play host to Sailing’s Olympics “The America’s Cup” this year from April to July with an expected global tv audience of more than 300 million viewers as well as the more than 1 billion Euros being spent on infrastructural devlopment, investing in property in Valencia becomes all the more compelling.

No holes barred as Spain and Portugal go head to head

2007-02-06T10:24:00.000+01:00

Golf resorts are flowering from the Atlantic to the Costas. Cheryl Markosky compares the best that Spain and Portugal have to offer

Aficionados of the sport say golf can be defined as an endless series of tragedies obscured by the occasional miracle. If you like those odds, owning a home on a golf course might just be for you.

Spain v Portugal: which one is driving to the fore?

So where do you buy? In Spain, where there are 60 courses in Andalucia alone, or neighbouring Portugal, boasting some of the top-rated courses in Europe?

Nick Freeston of Chesterton International says Spanish courses are probably easier to play, but their Portugese equivalents are more challenging and built for true golfers.

"There are more courses in Spain," he adds, "but Portugal will continue with a reasonably healthy growth - and an element of class thrown in."

A three-bed villa at a golf resort on the Costa del Sol - or Costa del Golf, as the locals call it - starts at around £300,000, according to Freeston, while you pay less (about £270,000) on the quieter Costa Blanca. "Prices in south-eastern Portugal for the same property would be around £400,000; or expect to pay approximately £350,000 on the less established west coast," he says.

Spain has its defenders, particularly with the recent announcement that capital gains tax will be lowered from 35 to 18 per cent in January for foreign buyers (capital gains in Portugal is 25 per cent).

Chris Mercer of Mercers believes "the weather, cost of living and comfort factor are the main reasons why people choose to buy in Spain. It is a safe, stable place to buy a second home."

Chris Mann, who is selling golf property at Hacienda del Alamo Golf Resort in Murcia, says: "Portuguese is impenetrable and there is a good deal of English spoken in Spain. Spain is more sophisticated in its lifestyle, food, communications and transport. And the Spanish would say their wine is better, of course." Well, they would, wouldn't they?

Sandra and Ian McLean are selling their £160,000 three-bed semi just outside Birmingham to live permanently in a three-bed villa they bought two years ago for around £200,000 at Hacienda del Alamo. Ian, a 58-year-old former banking services manager, enjoys golfing regularly, while Sandra, 55, likes the shops in nearby Fuente Alamo and the beaches, 30 minutes away.

"The pros of living near a golf course are the views, plus the social side. We have made a lot of friends over a drink in the clubhouse," says Sandra. Service charges are reasonable at just under £675 a year; the couple also pay an annual property tax of £360. But while high densities prevail in Spain, with 700,000 new properties built a year over the last few years, quality overrides quantity in Portugal, argues David Westmoreland from Praia D'El Rey on the Silver Coast."The market is strong for property on golf resorts like ours where values have soared by 280 per cent over the last seven years," he says.

House finder Robert Pierce of The Property Finders believes the Algarve can accommodate another 10 or 15 golf courses before it is anywhere near saturation. "There are 29 courses, with four more under construction and another four being considered by the planners."

For the record, Portugal clinched our trophy by a nose, scoring a total of 16 points to Spain's very worthy 15: so it's Taylor's Reserves all round at the 19th hole.

Source: Link

With tax rates now reduced, a home in Spain makes a shrewd investment, as long as you do your homework

2007-02-05T16:54:00.000+01:00

Still plenty to gain from a home in Spain

With tax rates now reduced, a home in Spain makes a shrewd investment, as long as you do your homework

Who says nothing good ever comes out of Brussels? Britons selling their holiday homes in Spain used to be clobbered with a capital-gains tax (CGT) rate of 35%, while permanent residents (Spaniards and foreigners alike) paid only 15%. Now, under pressure from the European Union, Spain has finally changed the rules. Since the beginning of this year, all EU citizens have been liable for the same rate of 18% Spanish CGT when they sell property there.

Lower taxes should make Spanish property a better investment for nonresidents, but taxes aren’t the whole story. With stiff competition from cheaper destinations such as Bulgaria, and Spanish property prices looking a bit peaky, is it still worth buying a holiday home in Spain?

Undoubtedly yes, in my opinion, but only if you are prepared to do your research, develop investment strategies based on local market insight and take a long-term approach. Buying any old property won’t work in a market that has risen by 100% in five years and now shows signs of fatigue. But if you are prepared to make the effort to become a well-informed investor with realistic expectations — rather than basing your decision on investment tips from pushy sales reps during whirlwind inspection trips — then here are some pointers.

The Gibraltar effect

With low taxes, minimal regulations and endless sunshine, all just a couple of hours by plane from London, Gibraltar is having no trouble attracting new businesses such as internet gaming and financial services companies (rumour has it that Gib’s ambition is to become the Hong Kong of Europe). This is creating well-paid new jobs, but few of the new residents want to live on the rock, fuelling demand for quality housing over the border in Spain. Sotogrande — arguably Europe’s top residential golf resort — stands to gain the most. At least one internet gaming entrepreneur has been investing in multiple units there to use as housing for his company’s employees.

That’s not all: a new agreement between the UK, Spain and Gibraltar means that Spanish domestic flights can now land at Gib. This will cut down the journey time from Madrid by a third — a huge improvement. Madrileños are big buyers in this area — a majority of buyers at Sotogrande last year were Spanish — and easier access should boost demand.

Contrarian investment strategies in Marbella

Marbella is having a terrible time with corruption scandals, illegal building and mindless development, all of which turn off buyers. Furthermore, a glut of two-bedroom flats is stunting prices because the market cannot digest all the new properties, with the result that prices across the board are either stagnant or falling.

But Edward Kay, 43, from London, is bullish about Marbella even as the market falls. Kay, formerly an investment banker with Merrill Lynch, is hunting down detached and semidetached beachfront properties, priced to sell, anywhere near Marbella.

“The glut of apartments is depressing the whole market, and distorting prices for other types of property,” he says. “As a result, you can pick up villas for less than they cost to build. Prices may fall further, but I don’t mind because I’m confident that the properties I’m buying will one day be worth a lot more. Based on fundamentals, this area has a great future.” Fincas in southern Catalonia The price guides produced by Kyero.com, a leading Spanish property portal, show that Tarragona, in southern Catalonia, has emerged as a popular region with buyers. A new airport under construction nearby in the province of Castellon should help fuel demand for property around the Ebro River delta, one of Spain’s most beautiful regions.

Newly built villas on the coast are often wildly overpriced, but fincas (country properties) with a few hectares of land, not far from a village, still represent good value. “If it’s just land with planning permission, then prices start at about €30,000 [about £20,000],” says Mary Sidman, director of Catalunya Property Services. “Fincas with a habitable house start at about €200,000 [£132,000]. Younger buyers, families with children, are coming here for a change of life, and that demand is not going to disappear.”

Flight to quality

Buying off-plan proved to be an unpleasant experience for many homebuyers and investors alike in recent years, due to the flaky conduct of countless mediocre developers. A difficult market, and risk-averse buyers, should cause a flight to quality, which will benefit developers with good reputations. You will have to do your homework to identify the best developments, and don’t rely on an estate agent for your information.

So much for what you should buy: what should you avoid? For a start, keep away from two-bed flats in mediocre locations on the Costa del Sol. There is a surplus of these, and prices need to fall further before the market clears.

Patience is also required. It used to be possible to make a quick killing by “flipping” properties bought off-plan, but this is no longer the case. Spanish property is not a good short-term speculative investment because transaction costs are high, at about 10%, both when you buy and sell.

A final word of warning: as Bill Blevins, of tax specialists Blevins Franks, points out, if you are a UK resident buying in Spain, you are still liable for British CGT — 40% after allowances if you are a higher-rate taxpayer. In other words, you may have to pay less to the Spanish, but will end up paying correspondingly more to Gordon Brown.

And, be warned, keeping your Spanish property dealings secret from HM Revenue and Customs is becoming more difficult. British and Spanish tax authorities are starting to cooperate, and the taxman is snooping on you like never before.

Source: Link

THE TOURIST INDUSTRY COMMENCES THE YEAR 2007 SEASON AT FITUR

2007-02-02T10:10:00.000+01:00

A total of 845 exhibitors, more than 13,100 companies and nearly 89,000 net square metres of exhibition define the first grand worldwide tourism event of the year.

43% of direct participants are from abroad, attending the fair from some 170 countries/regions

The fair's official newspaper, known as FITUR NEWS, will be distributed for the first time at the fair on the days set aside exclusively for the trade. There will be three different issues (one for each day), which will bring together the most important events that take place during this edition of the fair.

FITUR will once again bring the tourist industry together at its twenty-seventh edition, which is due to take place between 31st January and 4th February. This new edition, which is characterised by its growing international dimension and more professional approach on the days set aside exclusively for the trade, is the first grand world event on the tourist industry calendar, one that provides participants with an ideal opportunity to boost their commercial strategies. In this respect, IFEMA will make all ten halls at Feria de Madrid available to members of the industry, bringing together some 845 direct exhibitors and 13,190 represented companies from 170 countries/regions within a net exhibition area measuring 89,000 square metres.

The International Tourism Trade Fair once again becomes one of the most important points of reference for the travel industry, providing all its participants with an ideal setting in which to define their strategies, exchange impressions and opinions and present their new products and destinations ... in short, the fair will provide them with an excellent opportunity to discover the current state of the tourist industry. Furthermore, FITUR, the second most important tourism fair in the world and the most important fair for Latin America, has introduced a series of initiatives and new features that will enhance its effectiveness as a leading centre for business. In this respect, the organisers have boosted a range of new computer-based tools and tightened the access controls on the days set aside for professionals, thus making FITUR the very best framework in which the participating companies can achieve their objectives.

In effect, in the general growing context of the fair, the considerable international stature stands out at FITUR, reflected by the fact that 43% of the direct exhibitors are foreigners.

For further information visit: http://www.ifema.es/ferias/fitur/default_i.html

Growth in Low Cost Flights Increases Tourism

2007-02-01T12:28:00.000+01:00

The increase in passengers on low cost airlines can explain most of the rise in tourists visiting Spain last year. Passenger numbers on low cost flights to Spain were 14.7% up over the year while traditional airline passenger numbers rose only by 3.8%. The increases seen in Spain by Ryan Air, Easy Jet and Air Berlin were up by 15.1%, 10.1% and 6.4% respectively.

Source: http://www.eyeonspain.com

Spain’s Economy Expected to Grow between 3.1% and 3.5% in 2007

2007-01-22T17:42:00.000+01:00

According to Price Waterhouse Coopers’ Economic Consensus for first quarter of 2007 Spain’s economy will grow between 3.1% and 3.5% this year. That opinion is shared by 60% of the professionals surveyed.

However, the experts expect a slow down in the next 3 years with regards to the course of international economy. Half of the 346 professionals surveyed expect inflation to be between 2.6% and 3% in December of this year, while 35% believe that it will be below 2,5%.

The Economic Consensus also says that 63% of Spanish businesses will keep prices stable in 2007, as opposed to 34% that will raise prices due to an increase in costs. According to the experts, the industries in Spain with the highest projected growth rate are information technologies, finance, machinery and tourism. Nevertheless, 75% see a decline in construction, 41% in machinery and 33% in commerce.

The forecast for business is optimistic, since most of the experts see the situation improving in the next few months. They also believe that the current rate of new jobs, investments and exports will remain the same.

Source: Link

Your Spanish Property whats it worth?

2007-01-10T13:38:00.000+01:00

Have you invested in a Spanish villa in the last few years? Do you really know what your investment is now worth? The property market in Spain has grown rapidly over the last 5 to 10 years and prices have risen to levels that have forced value investors into cheaper emerging markets. But for those that did buy in Spain, in some areas some people are starting to ask some serious questions. It's therefore, worth exploring some of the factors that influence perceived and actual market prices in further detail.

One of the enduring reasons why Spain remains an first choice destination for holiday-makers, property investors and would-be residents is that the fundamentals that attract people never seem to change. There's the weather with at least 300 days of sunshine annually along the Southern Spanish coastline; Spain remains cheaply accessible from most of Europe especially the UK; it's certainly alot cheaper in real terms; the people are generally accepting of foreigners and speak reasonable English; there's considerable infrastructure for foreigners; taxes are lower; petrol is cheaper. It's no wonder why so many people have invested in Spain. But for those who bought in the last few years when clearly the market has slowed, it's worth asking just what is the true value of some of those properties.

The value of any property is usually only a concern should you need to sell it. Long-term residents and retirees need read no further. But let's suppose you bought a villa 3 years ago for 500,000 Euros and you paid an additional 7% IVA (Spanish VAT) and another 3% to 4% in notary, land registry and mortgage set-up fees. Your total outlay before you've purchased furniture and completed the garden landscaping is already around 550,000 to 560,000 Euros - 10 to 12% above the 'market' price you paid at the time. (Incidentally, if you had purchased your plot outright prior to your build you would have paid 16% IVA on the plot alone and then 7% on the construction). If you still had to purchase furniture and complete your garden, you could easily find yourself at the 600,000 Euro level before you've acquired your title deeds (escritura) at the notary.

So you need to sell your villa and your investment now stands 20% higher than your purchase price. The latter point is not at all unusual especially with new build property. The general consensus is that prices have risen in the last 3 years which is true to a point but certainly not across the whole market. Indeed, the market for larger properties and especially top-end luxury villas has been difficult for a considerable period and here there has been little, if any, price appreciation in real terms over the last 3 years.

At the time of writing (December 2006) the market is quite simply over-saturated with large detached villas with few buyers in the market for properties over 500,000 Euros. There is a danger in thinking that demand and supply in the Spanish property market is sensitive to the same factors that influence that in the UK. Further analysis reveals that they are quite different.

Firstly, people buy property in the UK for largely different reasons than in Spain. Work and family considerations, affordability, area popularity, proximity to good schools and hospitals and local crime rates generally drive public demand while in Spain, many properties are purchased purely as holiday homes or investments where many of these factors are not as relevant.

Secondly, population densities are much higher and people themselves are less transient in the UK. This naturally keeps people in the same areas for longer and provides a solid basis for property prices as there are always others waiting to enter so-called 'good' areas. In Spain, there is no such pressure or demand for particular areas as the reasons for buying were different in the first place.

Thirdly, both real estate agent and bank valuations in Spain are notoriously inaccurate. In the UK, advanced systems exist showing property prices, previous sale prices and there is a generally higher level of qualification amongst surveyors. The same cannot be said in Spain where bank valuations, in particular, are often more influenced by the borrowing requirements of the buyer. Generally, Spanish mortgages are offered to non-residents up to 70% or 80% of a given property's value. For would-be buyers without sufficient funds to finance the remainder, unscrupulous agents often manipulate valuers to achieve the right valuation in order that the final loan-to-value is higher than 80%. Factor in the generally low level of expertise and qualification amongst local real estate agents and you clearly have a recipe for arbitrary pricing which in no way helps vendors understand what their properties are really worth.

Fourthly, the differing systems and application of taxation clearly impacts property prices. Spain, being a secondary property market for many people, means buyers are subject to non-resident tax rules. Capital gains tax, currently 35% (for 2006 but probably reducing to 18% in 2007), must be paid to the Spanish exchequer on disposal (although in practice this rarely happens).

Fifthly, real estate agent commissions are generally higher in Spain with standard rates between 3% and 5% even rising to 10% or more in some areas. There is furthermore, the effect of exchange rates, for if you purchased selling pounds and buying Euros at a good rate and then sold when the exchange rate was less favourable, you would no doubt lose some of your gain (if there was any).

We are unfortunately at a point in the Spanish property market when distressed sellers, in particular, are having to seriously 'undervalue' their properties to achieve a sale. There still exists a predominant culture of greed and hearsay where vendors' perception of their property's true value is overly optimistic and ultimately, unrealistic. Many are now having to face the fact that they bought badly in the first place and the additional cost of buying, coupled with the costs and taxes payable on disposal negate any margin of profit that there might be. Many are even looking at losses.

Overall, with slower demand for larger Spanish properties, a growing supply of properties for sale in the resale market, many vendors are slowly coming to terms with the fact that their ultimate sale price is considerably lower than that that was initially advertised. It is, after all, only actual sales prices that give us the truest indicator of real property values.

Source: Link

Siemens chooses the Murcia region for its new European R&D and Innovation Technology Center

2007-01-10T10:12:00.001+01:00

The German muiltinational Siemens will locate its R&D and Innovation Technology center for Europe in the Murcia region in the Fuente Álamo Technology Park. The company will sell the resulting software in France, Belgium, Italy and Portugal. An agreement will also be signed in the coming months with the Murcian Public Healthcare Department for the testing and employment of products made by Siemens in the Hospitals of the Murcia region.

The Minister of Health in the Murcia regional government, María Teresa Herranz explains: "This agreement will ensure Murcia spearheads developments in the hospital software sector". She also highlighted the fact that the first field of research in the new R&D and innovation center will concern the digitalization of dermatology and cardiology testing.

Thirty researchers will work in the center located in the Ingenia center of the Fuente Álamo Technology Park, which will be completed in April. In the meantime, the company will set up a provisional center in the Telecommunications Engineering School in the University of Cartagena, with which a training and research agreement will be made.

The director of the Fuente Álamo Technology Park, Joaquín Juan Agüera, underscored the importance of the project for the region: "The fact that a leading multinational in Europe has chosen the Fuente Álamo Technology Park as the location for its R&D and innovation center is great news. This will put Murcia on the digital healthcare map in Spain and Europe. Also worthy of mention are the important research and development agreements being set up with universities in Murcia and Cartagena".

The Siemens group is active in 192 countries and has a workforce of 460,000. The business areas and companies of the group are involved in a wide range of electrical engineering and electronics activities, and supply products and services that provide their clients with state-of-the-art solutions.

Source: www.interes.org

SPANISH PROPERTY AWARDS 2006

2007-01-07T14:46:00.000+01:00

The famous SPANISH PROPERTY AWARDS sponsored by BBVA and Daily Mail, has been published recently on the site http://www.propertyawards.net.

The aim of these awards is to distinguish the highest levels of achievement in a range of property related fields to attract foreign investment in Spanish property.

The range of categories can be entered by real estate agencies, developers, architects, interior designers, marketing and PR companies.

Estate Agency and Development categories are entered at provincial level, while special categories are at national level (Spain).

The Best Development 2006 winners are:

BEST DEVELOPMENT
BEST SPANISH DEVELOPMENT
	Meisho Hills Tradeunique Investment, Málaga
ALBACETE
	Las Higuericas Finca Parcs
ALICANTE
	El Plantio Royal Class Resort The Ferry Group
ALMERIA
	Al Andalus Thalassa Key Mare Promotores
CANARY ISLANDS
	Pueblo Don Thomas Fred Olsen
MÁLAGA
	Meisho Hills Tradeunique Investment
MURCIA
	Sierra Golf Grupo Masa

Source: http://www.propertyawards.net

Spain Profile

2007-01-05T13:11:00.000+01:00

Spain is a dynamic country. Not only is Spain the eighth largest global economy, but it has also grown at a much faster rate as the euro-zone (3.8% in the third quarter of 2006 in comparison to 2.6% in the EU-15 and 2.6% in the euro-zone).

In addition, Spain commands a privileged geostrategic position: it belongs to the European Union and is the gateway to North Africa and Latin America (due to its strong economic, historic and cultural ties in this latter case).

Furthermore, Spain is a modern knowledge-based economy with services accounting for 65 percent of economic activity. The country has become a center of innovation supported by a young, highly-qualified work force and competitive costs.

All of this confirms Spain's position as a highly attractive country for foreign investment, as borne out by the UNCTAD World Investment Report 2006, in which, the country was ranked ninth in terms of direct inward foreign investment in 2005.

Source: www.interes.org