Spanish Property News

Despite negative press, a horrible Sterling/Euro exchange rate and stagnant, if not declining property markets both in the UK and Spain, Spain is still the number one choice for Brits buying abroad.

A recent report issued by the Association of International Property Professionals (AIPP) showed that 25.4% of Brits buying property abroad bought in Spain. France came second at 17%, America was thrid at 9.7% with Bulgaria following next.

242,000 purchases were made by Brits buying overseas in 2007, a jump of 21% on the previous year. This was probably a reflection of the record house prices in the UK making overseas property investment a highly attractive proposition.

The other emerging markets, Italy, Portugal, Cyprus, Morocco, Dubai and Turkey, also faired well.

The ownership of a property legally built, with appropriate permissions, thirty eight years ago has been seized by the Valencian authorities. The house, built on an urbanisation, is situated in El Saler and was inherited by a couple, Cliff and Marie Carter, who come from Pickering in North Yorshire. They were relying on the property’s capital value, around 500,000 Euros as a pension fund.

The ownership has been seized via the 1988 Ley de Costas, (Coastal Law), which is enshrined under the Spanish Constitution and cannot be legally challenged. As the house was built in 1970 the law is being retrospectively applied. The enactment of the law has been poorly enforced by local authorities and thousands of properties, owned by Spanish and foreign nationals alike, are now under threat.

An environment ministry spokesman has denied that mass demolitions were planned but said owners of properties on public land could be “relocated”. He added: “We are not operating the law retrospectively. Concessions have been given to owners of properties which were built on land which is now public land. They can appeal if they want.”

The Northern Echo

The Spanish Government hopes that Spain’s service industry would take up the economic slack caused by the collapse of the Spanish property market seem to be in vain. A March survey, The Purchasing Managers Index (PMI) carried out by NTC Economics (http://www.ntceconomics.com/) showed an index of 40.9, which is way below the 50 mark which separates growth from contraction. This is the lowest figure in the index’s nine year history covering the European economies.

The Spanish property market downturn is rapidly spilling over into other economic sectors. Consumer confidence in March fell from 73.1 from 76.8 in February (100 is the dividing line between pessimism and optimism) and this lack of confidence will soon affect Spain’s manufacturers.

Reuters.

Despite the continuing gloom and bad news over the Spanish property market some areas of Spain continue to show growth both in sales and prices. This growth has often been fueled by foreigners continuing to purchase in Spain.

Resale property prices, as sought by sellers, in the some areas have shown some healthy growth when measured over the year ending in the first quarter of 2008. These are:
Huelva + 37%
Sevilla + 21%
Tarragona + 11%
Tenerife + 6.4%
Valencia + 6%
Castellon + 5%
Jaen + 5%
Cordoba + 4.5%

Other areas, such as Alicante, Almeria, Girona, Granada, Malaga, and Murcia have remained flat over the year.

So, there remains plenty of sunshine in Spain’s always exciting and interesting property market.

This is Money

The Bank of Spain has reduced its growth forecast for the coming year from its previous 3.1% to a more modest 2.4%. This is reflection of the sharp Spanish property sales slowdown, higher commodity prices and lower demand both from consumers and external markets.

According to Economy Minister Pedro Solbes “The effects of recent financial turbulence could be more acute than expected, which could also exacerbate the drop in the Spanish housing market…….”

The global credit crisis has resulted in banks and other lending institutions placing more stringent conditions on loans and the recent increase in mortgage interest rates has resulted in families cutting back spending on consumer goods in order to pay their mortages.

January 2008 figures show that there has been a drop of 27% for year on year Spanish property sales. This has resulted several major Spanish property companies like Cosmani and Labaro going into administration as lower sales fail to cover their debt payments.

The Guardian UK