A vigorous campaign to promote the Costa del Sol to overseas visitors is thought to have a positive effect on Spain's real estate market, according to Marc Pritchard, sales and marketing manager at Taylor Wimpey de Espana. He went on to explain that the region’s tourist board are targeting British holidaymakers in particular.
However, research by Fastighetsbyran, a division of Swedbank, reveals Brits are not the only demographic who are heading to Spain, the number of Swedish and Norwegian investors entering the Spanish property market is up significantly.
This is due to the strength of the Krona combined with low house prices, which has resulted in the Swedes fast becoming Spain’s biggest fans. Not performing as well as the krona, sterling recently climbed to reach a 19-month high against the euro, this is an advantage for any Brits planning to purchase a Spanish property at present, as Pointed out by Mallorca Sotheby's International Realty.
In a report by Reuters columnist Fiona Maharg-Bravo, house prices in Spain are down between 22 and 29 per-cent from the 2007 peak, according to various indicators, against roughly 50 per-cent in Ireland. But there was an 11.5 per-cent year on year fall in March, according to Tinsa, the surveyors. And the trough probably still hasn’t been reached.
According to estimates by Exane BNP Paribas, an average family still needs 6.2 years of its combined annual income to buy a house, well above the long-run average and more than double the U.S. requirement. Unemployment is at 23 per-cent and still climbing as the economy falls back into recession this year. With the combination of continued high property prices and the on-going credit crunch in Spain, net mortgage origination has naturally fallen off the proverbial cliff.
Banks may give house prices another downward nudge this year. Lenders own nearly 20 per-cent of the country’s estimated one million empty homes, according to estimates from Cheuvreux. They have been understandably weary of selling houses and cementing losses, but effectively have very little choice. The government is demanding cuts of foreclosed properties of 35 per-cent on average.
Once banks start to write down the value of the properties, it is considered they will be more willing to sell at large discounts. Banks are already flooding the market with cheap property. The bank Santander, launched a sale of flats in Sesena, Toledo, at less than half the original asking price. The good news is that Santander’s subsidiary, Banesto, managed to sell more units than it foreclosed in the first quarter of this year. Strong banks such as CaixaBank or BBVA will follow suit, thereby lowering prices further.
Of course, not all lenders will dump their stock. The new provisioning requirements may not be severe enough to force everyone to take the pain. Lenders that merge are allowed two years to make the write-downs, in turn limiting new supply. The simple reality is that the housing market is heading lower, and banks sooner or later face further losses. The adjustment is necessary, but will only sustain the sense of crisis in Spain.
Tips for buying property in Spain:
• Consult a reputable and independent lawyer who has a thorough understanding of Spanish property laws.
• Appoint an independent translator, not one recommended by your estate agent.
• Don’t commit to any payments until your lawyer has verified the ownership, development plans and all other legal aspects of the property and is certain that the property is debt-free.
• Agents often charge very high fees in Spain. As the same property is often advertised by different agents, it’s prudent to shop around for a fair deal.
• If you plan to buy off-plan property in Spain, you need to ensure that your sale deed protects you in case the buyer does not meet his commitments.
• Property can be transferred only if it is certified by a notary. The buyer, seller and notary must sign the deed.
• In order to ensure that your ownership rights are protected, you should register your title at the relevant office.
By www.holprop.com News (May 2, 2012)
Spain Property sales | Spain holiday rentals | Spain Lets