Statistics from the Ministry of Public Transactions has shown an increase in the number of Spanish properties sold to foreigners. Figures showed an increase of 24.7% in the third quarter of the year, compared to the same period of 2010.
Alicante was the top of the list for the number of property sales to foreign buyers with 2,097 sales. They were followed by Malaga with 951 and Barcelona with 607.
Sales and Marketing director at Taylor Wimpey España, Marc Pritchard, said: “The increase in property sales to foreigners in the last quarter of 2011 shows that many buyers have been discerning enough to strike while the iron is hot and purchase properties that are well priced and in excellent locations.”, the Olive Press reported.
Mr Pritchard went on to say “It is looking likely that prices in Spain will begin to increase by the end of 2011 with places like Tenerife and Malaga seeing property values improve signaling good news for the Spanish real estate market next year,”.
With low interest rates on savings accounts and low property prices it seems the crisis isn’t yet deterring the buyers completely.
So it’s here again! Another Christmas on the Costa del Sol.
Although this is my seventh Christmas in Spain I never can get to grips with it. It’s been warm and sunny throughout December and it’s hard to get into the Christmas spirit when it’s not snowing and cold.
There are illuminations hanging in the streets and shop windows are adorned with trees, tinsel and the usual “grotto” displays but with the sun on your back it all feels out of place.
One thing I have got used to is not having to scrape ice off my car windscreen in the morning. Good luck with that my English friends!
2011 Real Estate Market
The real-estate market has suffered terribly during the last few years but has shown some small signs of recovery in 2011, nothing of significance though. It’s been tough for me to write anything positive over recent months, I hope I didn’t bring any of you down!
Some banks have begun lending again, property prices crept up slightly and Spain saw record numbers of tourists.
Spain elected a new leader – Mariano Rajoy – and I look forward to him doing some good work for the country. Let’s be honest, he couldn’t do much worse than Zapatero did! I hope he keeps the tax on new builds at 4% rather than reverting back to 8% and I hope he doesn’t increase property tax, there are rumours that he will, and this would be devastating for an already wobbly market.
Unemployment in Spain rose to record levels this year and urgent action needs to be taken to stop it continuing. A good suggestion I have for Rajoy is to stop charging a “self-employment tax”. In case you’re not aware, if you want to help yourself out of the crisis and take the initiative to start your own business the Spanish government will charge you around 260€ per month, every month, regardless of your earnings. So if you start a business today but don’t earn anything for the first three months you still have to pay the 260€ per month. It’s a stupid tax that discourages new business. There is no justification for it. You still have to pay income tax and social security on any earnings on top of this tax so what is it for exactly?
The banks in Spain are looking forward to a hard year too. They have assets to move, debts to pay and defaulting loans to claim. They have work to do and with government pressure on them to behave 2012 will surely be a year that the banking industry wont forget in a hurry.
My friends in the mortgage world have hinted at some good news coming early in the new year and I look forward to spreading some positivity.
I will also be publishing some interviews in the new year from people within the real-estate market including agents and developers and I’ll try for some councillors too. If you think you have something to say that is relevant to the market, or you know someone that has, please let me know. I’m always looking for new content and this blog reaches thousands every week (which surprises me!) so send me stuff.
I am on holiday from 6pm today until Jan 3rd so there wont be many posts over the next 10 days. I will try to write some though and if anything important happens I will definitely post. However, not much happens in real-estate over the holiday so don’t hold your breath!
So I wish you all a very Merry Christmas and a happy and prosperous new year! See you in 2012!
Residents of Spanish town Juzcar went to the polls on Sunday to decide if the town should remain blue or return to the traditional white.
The town, dubbed the worlds first Smurf town, was painted blue earlier this year after Sony Pictures decided to use the town as a filming location for the Smurfs 3D movie. Sony executives visited the town and unveiled a plaque making the Smurf town official.
Of those eligible to vote just over 73% attended with an overwhelming majority choosing to remain blue. There were 143 votes in favour and 33 votes to return to white. Further votes are expected to arrive by post but not enough to change the outcome.
Officials estimate the colour has attracted 80,000 more visitors than usual prompting several new businesses to open in the town as well as more people registering as self-employed. According to Mayor David Fernandez other nearby towns are also reaping the benefits. “When the restaurants are full, visitors go to nearby towns to eat.”, he said.
One resident who voted in favour of keeping the colour added that “before the town really was blue in the sense that it was empty and sad. Now it’s buzzing with activity all the time”.
Not everyone is happy about the result though. Pedro Antonio said “The town has always been white and should go back to being so.”
The December long weekend or “puente” failed to deliver the tourist numbers expected, officials in Andalucia said.
Despite having the Davis Cup in Sevilla, trade from a cruise ship in Malaga and the every popular Sierra Nevada ski resort, Malaga saw lower hotel occupancy levels than for the same time in 2010. The figures are made worse by the fact that last year saw the air traffic controllers strike which damaged tourist numbers.
Malaga hotels reported average occupancy at less than 50% capacity while Sierra Nevada hotels saw 90% capacity, one of the highest figures for several years.
Sierra Nevada has benefited from the lack of snow in the north of Spain which has been warm and dry throughout autumn prompting over 70,000 skiers and a further 12,000 non-skiing visitors to head south.
A possible explanation for the lack of tourists could be that schools in some other regions and some parts of Andalucia had not closed for the entire week.
The Junta de Andalucía announced plans yesterday to accept bids for the dredging of the entrance to Marbella’s port, La Bajadilla, in preparation for the planned expansion of the marina by Sheikh Abdullah Bin Nasir Al Thani, chairman of Malaga football club.
The project, put out to tender and expected to cost around 411,000 euros, will ensure the safety of vessels accessing the marina. To do this, according to experts, there must be a minimum depth of 4.5 meters at the mouth of the harbor. The operation will require the removal of approximately 30,000 cubic meters of sand from the seabed.
“The drag caused by temporary land and sea currents can hinder access to the port,” said a spokesman for the regional government. The extracted sand will be used to regenerate some local beaches such as La Fontanilla or San Pedro district.
Companies wishing to bid for the project may do so until Jan. 16. Once the project is awarded the successful company will have three months to complete the works.
The construction industry in Spain does not seem to be improving and this is bad news for employment and growth in a Andalucia where building and construction was once its main sources of income, along with tourism.
Local authorities are feeling the squeeze from the harsh drop in planning-related income. Larger municipalities had put much of their financial hopes in the new PGOU’s (urban development plans) that were designed to create more available land for construction to generate more income through planning deals. Those hopes are now fading fast as none of the four main municipalities that approved the new guidelines are showing any signs of growth.
The new development plans have been in place since 2010 but the situation in Marbella and Antequera has not changed.
In Fuengirola and Malaga the PGOUs came into effect in April and September respectively but have faced an added handicap with developers unable to deliver the money stipulated in the agreements which were signed back in the boom years.
The town hall in both Malaga and Fuengirola place the blame for the delay in the approval of plans with the Junta de Andalucia and say the solution requires negotiating a new payment scheme with landowners that is more in line with the current market. The guidelines were drawn up in the context of a property boom but were launched in the middle of a crisis.
In Malaga there were five main planning agreements which would generate 172.4 million euros for the city, of which 126 million should have been paid already. The reality, however, is that city hall has received only 27.1 million. Furthermore, only two of the developers are up to date with their payments.
Planning councillor Diego Maldonado said that negotiations to modify other agreed payment plans were going well, especially in the case of the project to build tower blocks on the former Citesa site in Martiricos. The authority is only considering a reduction in the fees in the case of the former “Térmica” factory, on the west side of the city, where the available land for construction could be cut by the Coasts Authority who say that it invades public maritime domain. The site owners had originally agreed to pay the City Hall 58 million euros to develop the area.
Fuengirola the Town Hall are still waiting for 25.5 million euros corresponding to 28 planning agreements. After meeting with the developers, mayor Esperanza Oña said “not one of them is able to pay at the moment”.
Developers have been given the option to pay in instalments over a period of up to eight years, either by paying ten per cent a year and the rest a final payment, or postponing an initial payment of 30% until the end of the second year. The Town Hall requires a bank guarantee from developers worth more than the amount in the planning agreement.
According to figures released by the National Statistics Institute (INE) the average price of renting a property in Spain increased by 0.9% during November, compared to the same month in 2010.
The increase in rental prices remains two points below the overall CPI which was at 2.9% by month end, reported El Mundo. Month-on-month, rental costs registered a variation of one tenth, which had risen this year by 0.8%.
In Navarre, the only region to register a decrease in rental costs, the average fell by 0.4%. The largest increase was in the Basque Country which registered an increase of 1.6%, followed by a 1.3% increase in Catalonia. An increase of 1.1% was registered in both Asturias and Galicia, followed closely by 1% increases in Andalusia, Cantabria, Castilla-La Mancha and Castilla y Leon
Surprisingly the costs in Madrid only increased by a mere 0.3%, while Murcia and La Rioja saw an even smaller increase of only 0.1%.
TINSA have released a new Spanish house price report for December. You can download it here.
They summarise with the headline “The decline in house prices continues”.
The General IMIE index fell again in November to 1725 points to a year-on-year decline of 8% compared with 6.9% the previous month.
The cumulative decline from the top of the market in December 2007 has widened to 24.5 %.
This situation was also reflected in the market’s various segments, with “Capital and Major Cities” again recording the highest year-on-year decline of 9.7% , followed as in the previous month by “Metropolitan Areas” with 8.2% and the “Mediterranean Coast”, which echoed the decline in the overall market at 8%.
The remaining two areas fell by less than the national average.
The year-on-year decline for “Other Municipalities” was 7%, while in the “Balearic and Canary Islands” it remained at 3.7%.
The cumulative declines to November by area, from the top of the market, were:
Mediterranean Coast 30.4%
Capital and Major Cities 26.7%
Metropolitan Areas 25.9%
Balearic and Canary Islands 19.4%
Other Municipalities (not included in the previous categories) 21%.
The president of the Junta de Aldalucia, Jose Antonio Grinan, has announced plans to regulate thousands of properties in the region that were built illegally over recent years.
Although no promises were made Grinan, speaking in Torrox at the weekend, said the decree to legalise some of the properties that were built on land not licensed for development would “probably” be passed on January 10th.
“We are talking about legalising thousands and thousands of homes”, Grinan said adding “We must, therefore, be sure that this legalisation does not go against the public interest and is not harmful to the environment or the security of the people. Once this is confirmed, the decree will be approved.”
The number of illegal properties in Andalucia probably runs into the hundred thousands with an estimated 8,000 illegal properties in Mijas alone and a further 11,000 in the Axarquia area.
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