A new generation of British buyers are entering the Spanish property market – lured by cheap homes. UK agent sales are up on this time last year, with more Brits choosing investment properties in locations such as Turkey and Egypt. But buyers who were putting off finding holiday homes during the recession are also returning to traditional destinations such as Spain.

Holiday-home buyers in Spain and France still dominate the market – and many have decided now is the time to buy. The two countries made up two-thirds of UK based broker Conti’s overseas mortgage business last month.

Enquiries for Spanish properties make up 92% of the current demand, compared with 50% just two years ago. Two-thirds of our clients have been registered with us for over a year. Most people have thought about buying before – Spain isn’t a new destination for them. But there’s been some recognition that maybe prices won’t go down further.

Tags: bargain prices, buying property in Spain, House prices, Mortgage Lending, Property market trends, Spanish property
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A surge of foreign lifestyle buyers and investors has split the Spanish property market. Sales are up 200% in some regions compared with 2009 – despite the Bank of Spain claiming that last year was the worst in a decade for foreign property investment in Spain.

Parts of Spain are doing really well at the moment but there are two completely different markets. The split has seen lifestyle buyers choosing less built-up areas such as the Axarquia, where prices are at their most affordable level for years. Meanwhile, investors are looking for distressed bargains in over-developed locations such as the southern Costa Blanca.

Building restrictions in the Axarquia over the last few years have kept stock levels relatively low, while a glut of homes has emerged in other destinations on the Costa del Sol. In areas like the Axarquia and Colmenar the offer is quite limited already. The British know Andalucia is a premium location and are taking advantage of interesting current prices.

Story from OPP

Tags: bargain prices, buying property in Spain, House prices, Recovery, Spanish property
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Buyers are back looking for holiday homes. Mortgage broker Conti Financial Services, which specialises in overseas mortgages, reports a big increase in mortgage applications and the busiest month for over a year.

The foul winter in the UK has probably helped concentrate buyers’ minds on that place in the sun and mortgage applications rose by 48% in March compared with the previous monthly average.

European banks have not suffered as much from the sub-prime crisis as UK mortgage lenders and Conti says that overseas mortgage providers have money to lend to foreign investors. ‘Falling property prices across many European destinations – in some instances by as much as 50% – mean that the chance of owning a place in the sun may never be better, and historically low interest rates mean it’s become even more affordable for British buyers,’ says Clare Nessling, Conti’s operations director.

‘The most popular destinations amongst our clients are still France and Spain, both of which come with easy access and good rental opportunities,’ she says.

Nessling reports bargain hunters out in force in Spain where oversupply of properties and fears about planning permission have left the banks holding repossessed properties which are being sold off. ‘Confidence is definitely growing, but there’s also an element of buyers snapping up bargains in traditional hotspots while they have the chance.’

So where will you find a bargain? ‘Those European countries yet to record their first quarter of growth since the credit crunch include Spain, Denmark and Ireland where an oversupply of stock is holding back prices,’ says Liam Bailey, head of residential research at international estate agents, Knight Frank.

Tags: bargain prices, buying property in Spain, financial crisis, House prices, Mortgage Lending, Spanish property
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There’s a growing feeling of confidence amongst prospective overseas property buyers, according to Conti, the overseas mortgage specialist. It’s just had its busiest month for almost a year in terms of mortgage ‘go aheads’, the point where prospective buyers take their mortgage quotes through to the application stage. These increased by 48 per cent during March, compared with the previous monthly average. The proportion of prospective buyers progressing from the quote stage to the go ahead stage has also increased, suggesting that buyers are becoming more serious about their intended investment.

Despite the turbulence unleashed on the UK mortgage market by the global banking crisis, Conti says that overseas mortgage providers have a healthy appetite for lending to foreign investors. But a combination of factors, not just mortgage availability, are contributing to the attractiveness of this market. Falling property prices, in some cases by up to 50 per cent, and historically low interest rates are making it much more affordable, despite the current strength of the euro.

Clare Nessling, Conti’s Operations Director, says: “Falling property prices across many European destinations mean that the chance of owning a place in the sun may never be better, and historically low interest rates mean it’s become even more affordable for British buyers. The most popular destinations amongst our clients are still France and Spain, both of which come with easy access and good rental opportunities. Confidence is definitely growing, but there’s also an element of buyers snapping up bargains in traditional hotspots while they have the chance.”

Tags: buying property in Spain, Mortgage Lending, Property market trends, Recovery, Spanish property
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The report from Savills International Research revealed how far the overseas property market in the UK had fallen over the last year. Just 2% of the 430,000 foreign-home owners in the UK bought their property in 2009, compared to 70% who bought between 2003 and 2008.

“By spring 2009 Savills International noted that interest in international holiday homes had returned, albeit at far lower levels than previous years,” said the report. “The market has now reverted back to traditional, end-user buyers (as opposed to investors), and mostly in traditional, established hotspots.”

The high number of distressed sales that have contributed to oversupply and falling prices has helped keep pure investors out of the market, it added. “In contrast to previous years, investors solely seeking to capitalise on upward price movement are no longer active in the market place.”

Savills’ head of international, Charles Weston-Baker, told OPP that mid-market buyers had also started to return to the market. “We have started to see more grassroots sales coming through,” he said. “The very top of the market has largely been unaffected, but now end-users who are looking for lower-priced but quality property are buying to enjoy the product.

“We’ve also noticed how important sport has become to buyers, especially for baby boomers and those retiring. There’s a new enthusiasm for experiential holidays and buyers need a reason to be somewhere, such as golf or horseriding. We seem to have jumped 20 years in aging, where people are slowing down at 80 rather than 60.”

The report predicts another quiet year for the UK holiday home market, with most sales taking place to high-income lifestyle buyers in traditional locations, with little activity in the speculative or off-plan markets.

The proportion of people buying in major cities and in villages grew substantially at the expense of smaller towns and isolated rural locations. The popularity of purpose-built resorts also increased.

“This reflects not only the growth in preference for such developments but also the rise in quality and quantity of such communities,” said the report. Interest in buying property to renovate or improve also fell, mirroring the rise in resorts where ready-to-go homes maximise letting potential.

Savills’ market has become skewed towards mid-to-top end buyers, and properties worth more than £200,000 now form the majority of purchases, with a particular fall in popularity of homes worth less than £100,000.

Story from OPP (registration)

Tags: buying property in Spain, Euribor, Property market trends, Spanish property
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The bust is dead, the Spanish property market’s recovery has begun! That’s how some leading daily papers like El Pais are interpreting the latest figures from the National Institute of Statistics (INE) showing the market grew ever so slightly in January. Well, I wouldn’t try to claim a vigorous recovery is underway, but there’s no denying the market appears to have found a floor, which is an improvement on the 2 years plus of monthly declines we had before.

So what happened? Well, figures for January from the INE show that, excluding social housing, there were exactly 34,000 sales in January, up 1.4% over 12 months. A year-on-year increase of 1.4% is no big deal, but it’s a much needed respite when it is the first time in 3 years that the market has actually grown. And it’s difficult to dismiss it as a one off, because it is clear that the market has now found a floor around 30,000 transactions per month.

But, of course, we have to keep in mind that the market in January was 56% smaller than it was in January 2007, when it stood at 77,400 sales per month. So a year-on-year improvement is good news, but peak-to-trough the market is still just a shadow of its former self. Until that situation changes, there’s not much to cheer about.

If you dig into the figures you find that most of the improvement is now coming from resales, not new builds, as the chart shows. New build sales kept the market from total annihilation last year, but I’ve been warning for months that, sooner or later, they might fall off a cliff.

Story by Mark Stucklin

Tags: buying property in Spain, Property market trends, Recovery, Spanish property
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The European housing market hasn’t stopped attracting British buyers, with Spain as the top hot spot, according to The Independent.

Spain may be a surprise entry given that it is still struggling with high unemployment and a shrinking economy, but with average house prices falling by 8 per cent in the 12 months from September 2008, this may be the time to pick up property on the cheap.

And while Spain has been going through turbulent times, it is nevertheless still a firm favourite as a lifestyle holiday destination, despite all the bad press of late.

The British love affair with Spain shows few signs of abating. Spain came out as the top destination for international money transfers at the Post Office, as well as the cheapest place to live within the eurozone, according to its holiday costs barometer.

The full story: The Indepentent

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The number of Brits buying euros for property purchases has increased in the last few days after sterling reached a rate of €1.15 for the first time since August 2008.

Foreign currency brokers have seen a 40% increase in clients buying euros, while new enquiries have shot up by 24%.

“A number of our clients in the market for euros are taking advantage of the improved exchange rate and buying their euros for overseas mortgage payments, property purchases etc now,” World First’s head of private clients, Elisabeth Dobson, told OPP.

“They are delighted to be getting a rate that is up to 12% better than the lows we have seen over the last 17 months. There are a number of clients who will have been holding off on property purchases and overseas investments due to sterling’s weakness against the euro. This rate move will certainly spur people on.”

A run of economic good news from the UK, including a fall in unemployment, rising inflation and an anticipation that the country is out of recession, has helped increase the pound’s strength. Meanwhile, economic problems in Spain and Greece have weakened consumer confidence in the euro.

Not all currency brokers have seen a substantial increase in business. “€1.15 is a bit of psychological barrier but most clients are still waiting for the magic €1.20 number,” Marc Morley-Freer, commercial director at Moneycorp, told OPP. “After the UK election we could see improvements that could push people to make lifestyle purchases – things are too uncertain before then.”

World First’s chief economist Jeremy Cook remains bullish following sterling’s 9% growth over the last year. “I don’t think this run in particular will last because it has happened so quickly, but the pound could be up to around €1.22 by the end of the year,” he told OPP.

Story from OPP

Tags: buying property in Spain, European economy, Recovery, Spanish economy
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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: budget airlines, buying property in Spain, low cost flights, Spanish property
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I recently read an interesting interview with Mikel Echavarren, head of Irea, a Spanish real estate consultancy, talking about the state of the real estate sector in Spain. As an experienced professional in touch with many different companies in the sector it is worth listening to what he has to say. Here is a selection of comments from his Q&A with Idealista News, the news section of the property portal Idealista.

Do you think there are any good investment opportunities in Spanish real estate today?
I think so but they are risky. In three years we’ll probably be kicking ourselves for not advising investors to invest now. There aren’t many opportunities in commercial real estate because there isn’t much product and rents haven’t yet adjusted. In residential, on the other hand, the correction has been very strong and fast. The ideal profile now is an opportunistic investor buying properties off banks by taking on the existing debt, a type of real estate venture capital.

So you think there are opportunities in a residential sector because the adjustment has already taken place?
There are hundreds of thousands of possible transactions, but not many genuine opportunities. What there is not is any financing, so anyone who wants to take advantage of this market has to take the debt with the asset, but there are still very few people prepared to do that today.

Has the price of housing and land touched bottom?
House prices touched bottom some time ago, they have already fallen all they had to fall. And the price of land has fallen faster than house prices although it could even fall a bit more. We have been saying at the top of our lungs that the price statistics published by the government are worthless, and damaging to the sector because they give international analysts the impression we are a country of idiots. In the US and the UK prices have fallen around 20% from the peak whilst here we have only fallen by 8%. We work with close to 28 property companies that have been restructured, and you see that valuations are down 30% in 2 years, and then banks buy those assets with discounts of 10-15% off valuations.

Do you think there is any residential property that will never sell?
What there is is a stock of land that will never be sold, at least not in 10 years. There are areas of Spain where the town plans look like they were designed for an invasion of extraterrestrials, parts of Almeria, Murcia and Alicante. There is an overdose of land that will lie in the warehouses of banks for many years. On the other hand, the stock of finished property will be absorbed sooner.

Is there any real demand for housing at the moment?
Yes, quite a few homes are being sold. We would have to place it at more than 200,000 homes a year. What is not selling is off-plan, as there you take the risk of the developer or builder going bankrupt. It’s a good time to buy newly built homes with Euribor at 1.24%. They won’t be any cheaper next year. And when prices start to rise they will do so at a rate of 10% per year.

How does one get the Spanish property sector to recover?
The residential sector is already recovering, just not the developers, who won’t see the light at the end of the tunnel for three years; it is very bleak for them. Clients of ours tell us they have sold a lot this summer, and some banks tell us that they have had more mortgage requests this summer than in all 2009. Furthermore, we believe that developers have dropped their prices to the minimum. There is mortgage financing available, not much, but there wasn’t any at all in 2008, and now there is. Mortgage costs are low, and it appears that the future is not going to get any worse. The recovery is underway, although this won’t show up in the official statistics until the first half of 2010. As soon as there is a general perception that things are getting better, house prices will stop falling and start rising.

Story from Idealista News

Tags: buying property in Spain, Euribor, House prices, Interest Rates, Property market trends, Realistic House Prices, Recovery, Spanish property
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