“Spain will return to economic growth in 2014″, says Rajoy

The Spanish Prime Minister insisted that all the measures being taken by the Government of Spain are with a view to economic recovery and added that he anticipates being able to lower taxes in 2014. He also expressed his confidence that employment and growth forecasts contained in the General State Budget for this year will improve and insisted that “2013 will be better. We still may not have reached the lowest point but we will start to see improvement, especially in the latter half of the year, and the economy will start to grow again in 2014″.

In an interview with Cadena Cope earlier this week, Mariano Rajoy said that “reducing the public deficit is our top priority”. It must be lowered to 6.3% this year “at a time of economic recession and a shortage of financing, which is why we have raised taxes and cut spending”. In spite of that, he stressed that no further tax increases are on the cards. “What I want, because I believe in it, is to lower taxes and I hope to do so in 2014″. He also rejected the idea of lowering public sector wages in 2013.

The President of the Government argued that the difficult decisions taken until now have all been “aimed at enabling economic recovery”. The labour reform, the financial restructuring and the reform of public administration services, which he said “we’ve been talking about for 30 years and will now finally be carried out”, are some of those steps, the true effectiveness of which will be revealed when economic activity returns. Rajoy added that, for the time being, Spain is going through a debt reduction process and said “it is very difficult during any process of debt repayment to ensure that money is available for investment and consumption. But this process is essential because otherwise nobody will finance us”.

The Spanish Government newsletter, La Moncloa, reported that when questioned over whether Spain should request aid from the European Union or not, Rajoy reiterated that this decision has yet to be taken. The Government of Spain will eventually make that decision, he explained, and it “will be solely and exclusively aimed at guaranteeing the general interest of every Spanish citizen. I have not discarded the possibility of going down that path; it is an option that remains open to us”.

Article source: Kyero.com

Unemployment rises in October

Queues got longer in October

The number of unemployed people registered at the offices of the public employment services (formerly INEM) rose by 128,242 in October, which is up 2.7% compared to September, and put the total number of people unemployed in Spain at 4,833,521, the highest level in the comparable historical series, which started in 1996, reported the Ministry of Employment and Social Security.

The October increase, a month in which unemployment historically tends to increase, is the third rise in a row after the August and September figures, and the third worst registered for this month in the historical series after October 2008 (+192,658 unemployed) and October 2011 (+134,182 unemployed).

In this regard, the Secretary of State for Employment, Engracia Hidalgo, stressed that although the rise in October cannot be considered a “good thing”, it is less than it was last year, and marks five consecutive months in which “unemployment has performed better than in 2011.”

Since October 2011, unemployment has increased by 472,595 people, or 10.84%.

According to the employment data, unemployment rose in October for both sexes, but more among men, with an increase of 69,008 (+3%), compared with a rise in female unemployment of 59,234 (+2.5%), bringing the total of unemployed women to 2,440,825 and 2,392,696 for men.

Unemployment rose in October in all sectors except in construction, where it fell by 3,670 people (-0.48%). Services accounted for three-quarters of the rise in unemployment in October, with 97,610 more unemployed (+3.4%), followed by agriculture, with 24,401 more unemployed (+15.1%); industry, which added 8,888 more unemployed (+1.7%), and the group without previous employment, with 1,013 more unemployed (+0.27%).

The rise in unemployment in October was more pronounced among those over 25 years of age, with 107,638 more unemployed (+2.5%), while among the under 25s unemployment increased by 20,604 persons (+4.4%).

The foreign population in Spain increased their number of unemployed in the tenth month of the year, recording 17,890 more unemployed than in September (+3%). In total, the number of unemployed immigrants stood at 605,959 at the end of last month, which is a decrease of 9,806 unemployed (-1.6%) compared to October 2011.

Unemployment down in two regions

In October, unemployment rose in all regions, except in the Canary Islands and Valencia, where the number of people unemployed fell by 993 and 867, respectively. Among the increases, the most significant were noted in Andalusia, with 32,139 more unemployed, and Castilla-La Mancha (+16,791).

With regard to the provinces, unemployment fell in five, especially in Valencia (-3,406), Castellón (-820) and Las Palmas (-727), and it rose in all the rest, especially in Madrid (+12,897) and the Balearic Islands (+9,474).

In terms of recruitment, El Mundo reported that in October a total of 1,427,173 contracts were recorded in the employment offices, an increase of 10.2% from October 2011. Of these, 130,632 were permanent, equivalent to 9.1% of the total, and 34.3% higher than the same month of 2011.

In the first ten months of the year, the total number of contracts reached 11,558,721, up 4.1% from the same period in 2011. Of these, only 7.8% were permanent, with a total of 908,090, 5.4% less than in January-October last year.

Article source: Kyero.com

Property sales rise for first time in 17 months

After 17 months of decline, the number of property sales in Spain experienced a year on year increase in August. Official statistics report 27,708 transactions, 3% more than in August 2011.

Sales in August constitute the first figures since the government announced changes to tax benefits for home purchases that will begin in January 2013. The removal of tax relief appears to have encouraged some buyers to take advantage of the current legislation.

Specifically, Mariano Rajoy’s government announced in July that, as of 2013, those who buy a home will be unable to deduct income tax benefit. Also ending are favourable tax rates for new house purchases, which will increase from 4% to 10%.

For resales, the transfer tax (ITP) with a tax of around 8% is also rising in several regions to 10% in 2013.

The data released by the INE reveals large regional differences for example in Castilla-La Mancha, La Rioja and the Balearic Islands, home purchases have increased by nearly 30%, while in Navarra and the Basque Country there were similar variations but entirely opposite, dropping by up to 30%.

Article source: Kyero.com

Tinsa Imie Index – September 2012

The cumulative decline increased by 5 tenths in September to 32.9%. Capitals and Major Cities recorded the highest fall compared to other areas.

The IMIE General Index recorded a year-on-year decline of 11.6% in September, similar to the previous month, pushing the index down to 1532 points. The cumulative decline in house prices since the top of the market in December 2007 was exactly 32.9%.

In terms of the performance of the different areas, “Capitals and Major Cities” recorded the steepest year-on-year decline with 13.5%.

The remaining areas all fell below the average with very similar year-on-year figures. The largest price falls were in “Other Municipalities” with 10.9%, followed by “Mediterranean Coast” with 10.8% year-on-year, “Metropolitan Areas”, with 10.4%, the same as the previous month, and lastly the “Balearic and Canary Islands” with a figure of 10%.

In terms of the cumulative declines by area since the top of the market, the fall in prices in the “Mediterranean Coast” reached 39.2% in September; followed by 36% for “Capitals and Major Cities”, 33.2% for “Metropolitan Areas”, 28.6% for the “Balearic and Canary Islands” and 28.5% for “Other Municipalities”, which comprises all those not included in other categories.

Lucas Fox Q1 and Q2 2012 property market reports

Leading Spanish Luxury Property Agency sees volume of sales transactions nearly triple in the first half of 2012 in key Market Locations

2012 first and second quarterly results published in the Lucas Fox Luxury Real Estate Market Reports suggest continued solid interest in Barcelona, Ibiza and Mallorca, with Lucas Fox reporting almost three times as many sales transactions compared to the first half of 2011.

October 2012 (BARCELONA, Spain): Lucas Fox has released Q1 and Q2 2012 property market reports for:

• Barcelona

• Ibiza

• Mallorca

• Costa Brava

Each half-year Lucas Fox publishes an analysis of trends within the luxury property markets of Barcelona, Ibiza, Mallorca and Costa Brava, using information collated from buyers and property owners in key luxury market locations.

Commenting on the report Lucas Fox Director Alex Vaughan said, “We have had a strong start to 2012, with almost three times as many sales transactions as in the same period in 2011. We have increasingly seen sellers adjust their prices to reflect the realities of market conditions, attracting new investors to the luxury property market in all our locations.”

Summarising the findings from Lucas Fox’s four key market locations, Alex Vaughan stated:

• “In Barcelona we have seen a pricing readjustment across-the-board, sparking a new wave of foreign investor interest in some of our most sought-after locations. Many buyers who have been carefully monitoring the market throughout 2011 are realizing that it is a perfect time to snare quality properties in Barcelona’s prime property hot spots”,
•  “The healthy interest in Ibiza property seen in 2011 has been reflected in the first half of 2012, resulting in another strong year for this market. Ibiza’s image as a party island is giving way to a greater reputation as a luxury Mediterranean holiday destination and this is further reinforced with the recent completion of the stunning Life Marina Ibiza apartment complex.”
• “The second quarter of 2012 ended with an upsurge in investor interest and luxury property sales in Mallorca. There has been particular interest in seafront properties, country houses and large apartments in Palma Old Town amongst foreign buyers. Interest in prime Mallorca properties is expected to extend through the peak sales season until the end of the third quarter, at least.”
• “In the Costa Brava, the number of sales transactions remains low, though comparable with 2011 levels. Unique properties in exclusive locations are still attracting a lot of interest and in some cases still exchanging close to asking price. In these cases buyers are investing primarily as a lifestyle decision and many are attracted by the potential revenue from luxury rentals, providing a return on investment whilst the market remains uncertain. Sales transactions are expected to remain slow for the rest of 2012, but we expect an increase heading into 2013 as buyers begin to sense that we are nearing the bottom of the market ”

“At Lucas Fox, we expect to experience strong third and fourth quarters in 2012, particularly in Barcelona, Ibiza and Mallorca, and steady sales activity in the Costa Brava in what is traditionally the peak buying season. Lifestyle investors are carefully watching the local luxury property market and beginning to make their moves as they recognise that prices have neared their lowest points. This has been reflected in a growing trend which has seen investors reacting quickly to the availability of high-class properties in prime locations across each area,” said Mr Vaughan.

Founded in 2005, real estate agency Lucas Fox specializes in offering quality luxury properties, a professional approach and a high level of service. The company has offices in Barcelona, the Costa Brava, Ibiza, Mallorca and Portugal.

UK rebuffs Spanish challenge to Gibraltar sovereignty

The United Kingdom government has dismissed a request from Spain’s Prime Minister, Mariano Rajoy, for a return to bilateral discussions on matters relating to Gibraltar under an agreement dating back to 1984.

Under the previous administration in Spain, Gibraltar and the UK had made significant progress on contentious issues surrounding Gibraltar’s sovereignty after more than a century of fractious relations. Through the trilateral forum, the three governments engaged on maritime border issues, customs policy and, critically, on tax information exchange. It was hoped that through the signing of a bilateral tax information exchange agreement, Spain would in turn recognize Gibraltar’s status as a transparent, highly-regulated international financial centre, lawfully independent from the United Kingdom.

However, in its election manifesto, the People’s Party, which took office this year, said it would seek to undo the work of the previous government and aim to restore the idea of ‘Two Flags (the United Kingdom and Spain), Three Voices’. This approach would remove Gibraltar’s power of veto over discussions pertinent to the territory and force it to mediate issues with Spain through the United Kingdom, under the terms of the 1984 Brussels Agreement.

Speaking at the General Assembly of the United Nations on September 25, Rajoy called for the United Kingdom to agree to a reset, and the resumption of negotiations under the Brussels process.

In a move welcomed by the Gibraltar government, the UK responded however that it would “not engage in any discussions about Gibraltar that the Gibraltarians don’t want to engage in”.

The Gibraltar government underscored that it had “already made clear that talks under the Brussels process are unacceptable to the government and to the people of Gibraltar”, and expressed hope that with the UK’s backing the matter would be put to rest.

“Gibraltar enjoys a veto on the resumption of bilateral discussions about Gibraltar and that is the end of the matter,” the Gibraltar government stated. “The only dialogue acceptable to the people and government of Gibraltar is a trilateral process, to which Gibraltar and the UK remain strongly committed.”

Article source: Investors Offshore.com

Spain outlines €20 billion of savings in budget

Social spending is the biggest casualty of Spain’s latest raft of austerity measures, announced in the budget.

As many as 43 new laws to reform the economy will be pushed through in the next six months in an effort to find €20 billion of savings, including measures to limit early retirement.

Spain’s finance minister Luis de Guindos confirmed the gap between legal and actual retirement ages will be reduced as the pension system adapts to longer life-spans.

The government will also take €3 billion from the pension reserve, with 60% of the savings expected to come from spending cuts.

Spending at government ministries is to be slashed by 12.2% in order to save €4.3 billion, while public sector wages will be frozen for a third year.

Debt servicing costs will be €38.6 billion in 2013, while tax increases will include a 20% gambling tariff.

De Guindos insists the budget measures exceed EU expectations, and added that Spain will continue to analyse the conditions of the ECB bond buying programme before making a decision on a bailout request.

Article source: The Olive Press

Hotel Bookings down 2.1% in August

Overnight stays in hotels in Spain registered a decline of 2.1% in August, despite the record increase in the number of foreign visitors. 40.8 million bookings were made in the eighth month of the year, which was 2.1% less than the same period of 2011, due to the fall in domestic demand.

The 3.5% rise in overnight stays by foreign tourists could not compensate for the 10% decrease in those made by residents, the National Statistics Institute reported on Monday.

Last month, the average stay was four nights per traveller, with a rise of 1.1%, despite the 0.8% annual increase in the Hotel Price Index, which took the revenue per occupied room to an average value of 84.6 euros (2.8 euros more than last year) and revenue per available room to 59.7 euros (0.4 euros more).

In August, 70.7% of the places available were booked, which was 2.6% less than a year earlier, while weekend occupancy was 72.6%, down 3.6%.

Foreign tourists accounted for 25.25 million of the overnight stays in August, compared with 15.56 million made by Spanish residents. The United Kingdom and Germany lead the ranking, with more than 12.5 million stays in August, making up 49.6% of the total, and Russia has now become the fifth source market, with a 29.7% increase in overnight stays, and 6.1% of the total.

El Pais reported that the Balearic Islands were confirmed as the main destination chosen by non-residents, with an increase of 4.5% compared to August 2011, followed by Catalonia (+6.4%) and the Canary Islands (+0.3%).

Travellers resident in Spain mostly chose to go to Andalusia, Valencia and Catalonia, although these regions recorded year-on-year declines in overnight stays of 6.9%, 4.7% and 11.9%, respectively.

Article source: Kyero.com

Average mortgage value fell 10.5% in July

According to figures from the National Institute of Statistics (INE), the average value of mortgages  for homes approved in July fell 10.5% to an average of 98,892€, compared to July 2011.

Overall, the average value of all mortgages constituted in Spain during July decreased 19.4% in the inter-annual rate with the average falling to 99,157€.

The main points of the press release are below.

During the month of July, the average amount of mortgage constitutions recorded in the land registries stood at 99,157 euros, a figure 19.4% lower than the same month the previous year and 19.0% lower than that recorded in June 2012.

In the case of mortgages constituted for dwellings, the average amount was 98,892 euros, 10.5% less than in July 2011, and 8.0% lower than that registered in June 2012.

The value of the mortgages constituted on urban properties was 3,858 million euros in July, indicating an interannual decrease of 28.9%. In dwellings, the capital loaned exceeded 2,402 million euros, 26.2% less.

Mortgages by institution

Banks were the institutions that granted the largest number of mortgage loans in July (74.3% of the total), followed by Savings Banks (10.2%) and Other financial institutions (15.5%).

Regarding the capital loaned, Banks granted 71.9% of the total, Savings Banks 11.1%, and Other financial institutions 17.0%.

Mortgage interest rates

The average interest rate for the total of mortgage loans was 4.27%, indicating a 0.2% less than July 2011. Regarding dwellings, the average interest rate was 4.24%, representing an annual variation of 1.8%.

By institution, the average interest rate of Savings Bank mortgage loans was 4.34%, and the average term was 22 years. Regarding Banks, the average interest rate for mortgage loans was 4.38%, and the average term was 21 years.

92.1% of the mortgages constituted in July used a variable interest rate, as opposed to the 7.9% that used a fixed rate. The Euribor was the reference interest rate most used in constituting mortgages, specifically in 85.4% of new contracts.

You can download the full press release here: Mortgage Statistics - July 2012

Statistics on transfer of property rights – July 2012.

In July, the number of property transfers registered at notary was 133,144 which represent a 3.9% increase over the same period last year.

This is according to figures released by the National Institute of Statistics which also showed that the number of homes transferred in July was 2.5% lower than in the same month last year.

The press release is below.

The number of property transfers recorded in the land registries, from public deeds previously registered, was 133,144 in July, that is, 3.9% more than for the same month in 2011, and 2.2% higher than in June 2012.

In the case of registered merchantings of property, the number of transfers was 57,344, representing an interannual decrease of 0.6%, and an increase of 5.3%, as compared with the previous month.

Merchantings recorded in the land registries

86.5% of the registered merchantings corresponded to urban properties and 13.5% to rustic properties. Among the urban properties, 55.2% were merchantings of dwellings.

The number of merchantings of rustic properties increased 1.2% in the interannual rate in July, while that of urban properties decreased 0.8%. Within the latter, merchantings of dwellings decreased 2.5%.

Registered merchantings of dwellings, by protection system and status

87.6% of transfers of dwellings by merchanting in July were free housing, and 12.4% were protected housing. In interannual terms, the number of transfers of free dwellings by merchanting decreased 2.5%, the same figure than protected housing.

48.5% of the dwellings transferred by merchanting in July were new, and 51.5% were used. The number of transactions on new dwellings decreased 0.2% and the number of used dwellings decreased 4.6%, as compared with July 2011.

You can download the full press release here: Statistics on Transfer of Property Rights – July 2012