Archive for January, 2010

 

January 19th, 2010

It may have gone sour for some, but the coverage of the reality faced by second home owners like us omits some important truths. By a Citywire reader.

In the foreground there were sheep grazing on rough, undeveloped grasslands; in the background mountains.

When built, the bungalow would sit at the end of a row of white homes, with a triangle of land that would remain undeveloped at the end. There would be nothing across the road from us apart from a few buildings in the distance and then the mountains beyond that. We had our own part of the Spanish dream, having saved for decades to fulfil it.

Ten years later and everyone now knows how the developers got greedy, the cranes took over, promises were broken and property values plummeted; in some cases bizarre land laws meant that people lost their homes.

That story has been told over and over again. But this is not a piece complaining of the ruthlessness of the Spanish authorities, fraud on the Costas, nor the overzealous developers.

The value of our house has of course dropped and the weak pound has taken its toll. The developers’ broke their promises – high rises now obscure our view of the hills – and this is no sleepy Spanish idyll. But it is a place boasting the best climate in Europe. It remains five minutes from the beach, and provides a sanctuary we are fortunate to enjoy from the bitter grey British winter.

Thanks to Ryanair it is cheap and easy to get to. And while the British influence is increasingly widespread in this part of the world (the Costa Blanca since you ask), speak a little Spanish – and it doesn’t have to be fluent – and the locals will cheerfully speak it back. The pound is weak, but that wont last forever and the Menú del Dia is still a bargain.

The value of our home may have dropped but like most of the Brits with houses in the Med, but this is not our first home and it is not our retirement fund. This is not because we are loaded; far from it, we bought it to enjoy it, which we have many many times.

The newspapers may be full of reports that the dream of owning second homes in Spain is dead, but for the majority of people – at least those who are in it for the lifestyle not a money-making opportunity – it’s alive and well.

That is not to say that people in our situation haven’t been faced with property nightmares, but that over the years the coverage and hype surrounding this has been disproportionate: for the fortunate majority the Spanish property dream is not dead.

Story from Citywire

Tags: , , ,
Posted in Property market, Travel | Comments Off

January 15th, 2010

The Spanish house price index figures for December 2009 have just been released. See the graph and the table below for an up to date overview of the real estate market trend in Spain.

Spanish House Price Index - December 2009

The Tinsa property price index for December shows average prices falling by 6.6% over the last 12 months, the same rate as which prices fell in the 12 months to November. So this represents a pause in the trend towards moderating price declines. Last month we reported that, on present trends, prices will be rising again in a few months. Well, not if the latest figures have anything to do with it.

On the other hand, the price of property in the coast, where most foreigners buy holiday homes, did continue its positive trend, with prices down 7.6% over 12 months, compared to 8.9% last month. On a peak to present basis, prices have fallen the most on the coast (-20.8%).

The graph and table data represent the year-on-year evolution of Spanish property values. For example, if the value for August 2009 would be -3.9, then this means that average property prices in August 2009 are 3.9% lower than they were a year earlier, in August 2008.

The graph and table on this page contain up to date information for the past 13 months. For more information, please look at earlier monthly reports, or the historical overview since January 2001.

The graph and table data are based on actual property valuations, as established by one of Spain’s larget independent property valuation companies, Tinsa S.A. They are not based on asking prices or (under)declared selling prices, nor on the statistics as provided by the Spanish Ministry of Housing, and are therefore considered to be the most acurate and reliable source for this kind of information.

Tags: ,
Posted in Property market | Comments Off

January 5th, 2010

Euribor 12 months, the interest rate normally used to calculate mortgage payments in Spain, rose 0.9% in December compared to the previous month, finishing the year at 1.242%. This was the first monthly rise in Euribor in 14 months, suggesting that a change in tendency is on the way. But despite the increase in December, Euribor is still 64% lower than it was 12 months ago. That means borrowers on annually resetting mortgages can expect some relief in their future mortgage payments. Euribor is based on interest rates set by the European Central Bank. Base rates are expected to remain at 1% for the first quarter of 2010, rising gradually after that.

The volume of new residential mortgages signed in October was 52,451, down 18% compared to the same month last year, and 16% compared to September, according to the latest figures from the INE. In value terms new residential mortgages were down 31% to 6 billion Euros. New mortgage signings in Spain have now fallen for 28 consecutive months, often by double digits. That illustrates the severity of Spain’s property crash, even if official figures disguise the extent to which property prices have fallen. The average new mortgage value also fell, by 15.8% to 113,882 Euros.

Story by Mark Stucklin

Tags: ,
Posted in Financial & Mortgages | Comments Off