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The Spanish property market grew by 16% in February compared to the same month last year, according to the latest figures to be published by the country’s National Institute of Statistics.

Not including social housing, there were 35,720 home sales in February, 21,368 of them newly built and 19,665 resales. According to analysts the market has touched bottom and is starting to recover after two years of decline but the improvement is patchy and volumes are still 47% below what they were in 2007.

An examination of the figures shows that 79% of the increase in transactions came from just two regions. Catalonia saw a 43% increase and Madrid was up 36% while the market continued to shrink or stagnate in many coastal areas popular with foreign buyers.

Malaga and Alicante saw year on year increases of 3% and 3.8% respectively and Andalucia saw a 7% rise. Granada and Cadiz were both up 14% and Valencia saw 23% growth.

Local figures suggest that Marbella is leading the way to recovery with figures from the town’s tax office revealing that 2,499 properties were sold in the first three months of this year, a rise of more than 200% compared to the same period in 2009 when just 820 properties were sold and the highest for four years.

According to Marbella mayor Angeles Muñoz the town’ will be the first out of the crisis’ and is now recovering not just from the fall in the market but also from its illegal property scandals.

She said that its new town plan, which comes into effect this month, means that some 16,000 properties will be legalised, enabling owners to sell them, raise a mortgage or use them as an asset.

Meanwhile, the latest property price index from Tinsa shows that prices fell by 5.3% over the 12 months to the end of March, a slight improvement on the previous month. The figures from Tinsa, one of Spain’s leading appraisal companies, are however based on their own valuations not actual transaction prices.

Since the peaks of December 2007, prices are down 16.2% nationally, 22.5% on the Mediterranean coast, and 13.6% in the Canaries and the Balearics.

But there are no signs of foreign property buyers returning to the Spanish market. The latest figures from the Bank of Spain show that the amount of money invested by foreigners in Spanish property has fallen to its lowest level for a decade.

Foreigners invested €3.7 billion in Spanish property last year, the lowest level since 1999, when it was €2.9 billion. Foreign investment in Spanish real estate was down 32% last year compared to 2008, and by 48% compared to 2003, when foreign investment in Spanish property peaked.

But the weak economy, high unemployment and enormous inventory of new houses will slowdown any recovery in the Spanish market, according to a report from PricewaterhouseCoopers and the Urban Land Institute into European property market trends.

And according to another recent report from Deutsche Bank, a recovery is unlikely before 2012 and it might even be 2015 before there is an upturn.

Story from Property Wire

Spain’s property market is “dropping fast”: ‘ Property fairs tout discounts of as much as 60% on new-built homes, or even “buy one, get one free” offers. “All the statistics show a fall,” concedes the housing minister, Beatriz Corredor. Yet pinning down just how big a fall is tricky. Tax-shy Spaniards do not always declare the true selling prices. the government’s main index, based on valuers’ estimates, shows a 1.3% nominal fall in the third quarter. most think the true figure is far bigger. the IESE business school talks of prices of existing homes falling by 8%.’

‘Private sellers cannot believe that their homes are losing value, according to Fernando Encinar, communications director at idealista.com, a property website. but developers know the game is up. Some deals are being struck at 20% below advertised prices, he says, a fact few developers are keen to broadcast. they do not want people writing off deposits on half-built homes and shopping around for something cheaper.’

Although the above may sound familiar to Americans, who saw their own housing market fall apart due to excessive mortgages owned by households, Spain’s problems are caused by ‘loans to builders and developers. more than 40% of property loans go to them, not to householders. And the numbers considered “doubtful” by the Bank of Spain rose by 60% in the second quarter, to reach 2% of all such loans. they now account for more bad loans than do household mortgages. Worse is to come. “Let no one hope for a price fall of 30-40% because, before that, I’ll be giving it all to the bank,” the head of the Spanish developers’ association, Guillermo Chicote, said recently.’

The good news? Those of us living in the northern (and northwestern) part of Europe enjoy visiting Spain during the summer: the weather is awesome, the surroundings are awesome; in short, it’s heaven. Many want to buy a summerhome in Spain, but prices rose significantly in recent years, making it unaffortable for most households. Now that the Spanish housing market is crumbling, however, more of us will be able to buy a second home in one of Europe’s most beautiful countries.

Source:myforeclosurenightmare.com

Property sales in Spain have shot up by 20% according to the latest report from Spain’s ultra conservative National Institute of Statistics (INE).

They have revealed the first double digit growth in Spanish property sales for three years. Sales increased by 20% in February after a marginal 2% in January, a great boost for Spain’s main engine of economic growth.

As 60% of the sales were in second hand properties, it seems like the many Spanish bank repossession bargains are the main driver of this new-found market recovery. Other indicators also seem to point towards a slow but clear and steady recovery of the collapsed real estate market. Analysts expect the activity in the main second home markets to spread across Spain in future month.

The high level of property sales in Spain suggests the prices are ripe and tempting for many 1,000s of buyers and specialists PropertyInSpain.Net claim current prices remain at their lowest for a decade in Spain.

Said property manager, Mar Walcott: ”The market is busier this year than at the same period last year as buyers realise there are some wonderful bargains around.

“Until now savvy British investors seem have been playing the waiting game to grab a bargain property in Spain, so it has been the less cautious Scandinavian, Russian and Spanish buyers, who have pushed the sales to record levels so far this year.”

Source:propertyinspain.net

Chris Bryant, the Minister for Europe, was speaking last week during a visit to south-eastern Spain to meet British expatriates who have been told that their homes will be bulldozed after Spanish authorities declared their construction illegal, said that the country was undermining efforts to create a recovery in its beleaguered housing market.

Mr Bryant warned that: “The housing market in Spain is not going to recover quickly if pictures of bulldozers knocking down expats’ homes are appearing in British newspapers. Everyone I’ve spoken to in Spain says they want to find a solution but wanting a solution and getting one are two different things but obviously it’s not for the British Government to tell the Spanish what to do. But I’m pushing the message hard at all government levels that I meet here that they have got to put political willpower into these problems, whether it’s an amnesty, whether it’s a change in the law, whatever the solution is that is needed. That is the point I am pushing.   I have to say also that there is an enormous difference between the Britons who just make a cursory legal deal – that is always ill advised – and those who have done everything they should or could have done but still find themselves in deep trouble.”

John and Muriel Burns have spent the past decade pursuing their dream of a Spanish idyll, tending the garden and caring for their pool but they were among the first to receive the demolition orders in Albox. The pensioners emigrated to Spain in 2001. After hearing that his home would be bulldozed, Mr Burns declared that he and his wife would chain themselves to the house. “They did everything to dot the ‘I’s and cross the ‘T’s that they possibly could have to obtain the permission they required” to build their dream house, Mr Bryant said.  However, it turns out that the permission should not have been given but that was not the fault of John and Muriel Burns – but now they face the prospect of having their home demolished.

Mr Bryant had spent the weekend advising expatriates in Andalucía on issues ranging from property rights to health care and he visited Torrevieja, the fastest-growing town on the Costa Blanca, Malaga, the capital of the Costa del Sol, and the town of Albox, where eight British families are fighting demolition orders issued at the end of last year. He also said that he was able to tell worried Britons that the Andalusian regional government was appointing a full-time official to deal with the concerns of British expatriates. The official will provide advice on property regulations, health care and residence requirements. However, Mr Bryant warned: “People buying property anywhere abroad, not just in Spain, have to take at least twice as much trouble as they do at home to make sure everything is legal. It is so easy to go to a lawyer because he’s cheaper. Then later you find out that he wasn’t an independent lawyer at all, but was working all the time on behalf of the land developer and you are really stuffed.”

The authorities in Spain have been waging a campaign against former officials accused of allowing overdevelopment of coastal regions. The problem stemmed from when local governments issued building licences for the properties, but these were later nullified following court action instigated by a higher regional government. That situation has left many expats, and Spanish, out of pocket and at risk of losing their homes and all because the Spanish authorities couldn’t behave when they saw the Euro signs in front of them.

Source: guide2valencia.com

There was a small uptick in Spanish housing sales during the fourth quarter of last year, according to recent data released by the Spanish Ministry of Housing.

The increase was small, but enough for the Government to get excited about: “The transactions in the fourth quarter represent a rise of 4.1% with respect to the same period last year, this being the first year-on-year rise since the fourth quarter of 2006″.

In fact, if you just look at the ordinary housing market, the uptick was even better. Excluding social housing there were 116,664 house sales in Q4, a rise of 5.5%. Regrettably, that’s where the good news ends.

Take the year as a whole, there 413,112 transactions last year, a fall of 19% compared to the previous year, and a whopping 46% down on 2007. Even the Q4 was down 33% compared to 2 years ago.

Some regions did better than others. Looking at a selection of regions popular with holiday home buyers, the inland province of Teruel suffered the most in 2009, down 36%, followed by Las Palmas in The Canaries, down 32%. At the other end of the scale, Spain’s two big cities did the best, down just 1.7% in Madrid and 3.9% in Barcelona.

The small national uptick in Q4 that got the Ministry excited was almost entirely driven by big increases in Catalonia and Madrid (Barcelona +35%, Madrid +41%). Why the big surge in home sales in those two cities in the last quarter of 2009? I don’t know. But I wouldn’t be surprised if it had more to do with banks shifting Spanish property around their balance sheets than families buying homes to live in.

Source: kyero.com

The average house price in Spain shows an overvaluation of 20 percent, concludes a study by the Institute Juan de Mariana. This institution calculated the relationship between the sale price of real estate (2558 euros per square meter to December 2009) and rental price (95.6 euros per square meters per year).

This ratio fell from 32.2 in 2007 to 28.9 in 2008 and 23.6 in 2009, but the institute says the price of housing still must be reduced by 20 percent for the PER is equal the historical average (19.5).

However, since in the past two years the overvaluation is starting to be corrected, the institution considers that the final adjustment could be reached by the end of 2011.

The report indicates that the historical average of PER in Spain is the highest in Western countries, which, together with the surplus of unsold homes and the lack of credit, however the Institute said that housing prices could fall more than they should.

Still, it insists that throughout 2011 the house prices in Spain could be in line with that which existed before the housing bubble. It does not consider it is appropriate to stop the correction of housing prices through political means, nor aggravate the need for adjustment of prices by, for example, the construction of new subsidized housing.

It did feel it is necessary to introduce greater transparency and streamline most bankruptcy proceedings, so that the assets of bankrupt companies are settled quickly, while suggesting to the autonomous communities they should eliminate Transfer Tax to boost the market for the sale of old housing stock.

Source:barcelonareporter

Spain’s property woes and economic downturn finally may be
catching up with the country’s two largest banks, Banco Santander and
BBVA, the WSJ reports. The big banks have remained profitable throughout
the financial crisis despite the bursting of the housing bubble in
Spain, high unemployment and other problems, the paper notes. One
reason: the government’s strict requirements for Spanish banks to
maintain high reserves against bad loans, in part a response to a
previous property downturn in the 1990s. But now there is concern
whether these cushions can withstand the impact of an increase in
nonperforming loans, the WSJ says.

Source:sharpnews

A glut of new properties in Spain shows that the real estate industry is unlikely to recover quickly as over supply still clogs the market.

The most recent figures from The Ministry of Development show that 387,000 new homes were finished last year despite a property market crash already into its second year. This compared with 220,600 new home sales recorded by the National Institute of Statistics for 2009.

‘This means there is an oversupply of around 166,500 new homes that joined the glut of new homes already languishing on the market in search of a buyer. It illustrates the severity of Spain’s construction boom and bust,’ said Mark Stucklin of Spanish Property Insight.

‘What is worse, there is no quick solution as much of the trouble is stored up in a new homes glut that will take years for the market to digest,’ he added.

When the figures are added together it means the market is now facing a glut of 1.2 million new homes. The Spanish developers’ association and the Ministry of Housing are more optimistic in their figures and estimate there is somewhere between 700,000 and 750,000 new homes on the market but even at that level it will take years for the market to absorb the over supply.

Stucklin says the industry has consistently built too many properties over many year and ignored falling demand. ‘Last year, there were around 225,500 new households formed in Spain, down from 300,000 plus per annum in the boom years. New household formation surged as immigrants flooded into the country and changing demographics and life-style choice, for example and increasing divorce rate, pushed up the demand for housing. But even at the boom level of 300,000 new households a year, it is now clear that Spain was building way too many new homes,’ he explained.

‘In 2006, for example, there were 865,500 planning approvals, though not all of them went on to become housing starts. And in 2007 there were a record 641,500 housing completions. Now even if you assume that demand for second homes was a generous 200,000 per year, Spain was still building something like 200,000 or more excess homes per year. Now they are idling on the market, tying up capital, and dragging down the Spanish economy’s productive potential,’ he added.

Although supply now seems to be adjusting to demand there is still a huge glut in the market. But this doesn’t help the economy as a collapse in new building is just as bad for the economy as too much building, Stucklin reckons.

This article has been republished from Property Wire

New mortgage lending in Spain is still very depressed, according to the latest numbers from the National Institute of Statistics (INE).

According to the latest figures, for December and therefore the whole of 2009, new mortgage lending fell again last year, by 22% in volume terms (to 653,173), and by 34% in value terms (to 76.8 billion Euros), as illustrated in the chart above. These are the lowest levels in both volume and value terms since the INE started publishing this data series in 2003.

The number of new mortgages signed has been falling now for 3 years, and the value of new mortgages has been falling even faster. That means there is less money around to spend on Spanish property, which puts downward pressure on prices.

Mortgage lending has been changing in percentage terms over the last few years – falling in both volume and value for the last 3 years, though the rate of decline improved slightly in 2009. That means it is still falling heavily, just not by as much as last year.

Over the last 2 years, new mortgage lending has been falling more in value terms than in volume terms. That means that the average mortgage value is also falling, as borrowers take out smaller mortgages. The average value of new mortgages last year was 117,688 Euros, down 16% on 2008.

A spokesperson for Spanish Property Insight commented: “Why are people taking out smaller mortgages? Firstly, because the banks have tightened up their lending criteria, and now demand bigger deposits. But also because Spanish property prices are falling, so borrowers don’t need such big mortgages as before.

“Peak to trough, new mortgage lending is down 51% by volume, and 59% by value, compared to 2006, when the market peaked. That is a massive decline in the amount of money around chasing property”.

Source: Spanishpropertyinsight