Housing in 2014 continued rising

Property Sales in Spain rose again in 2014HOUSING sales in Spain have again for the third consecutive quarter risen, as 13.5% more houses were sold in the third quarter of the same period last year.

Sources in the Ministry of Development stated that the amount of sales completed before a notary between the months of July and September was 80,136. January to March also saw a rise of 48.5% in sales, with an additional 12% increase in the second quarter.

These are indeed encouraging statistics, especially when viewed with latest figures from the Institute of National Statistics (INE) which showed a 16% increase in October compared with the same month last year.

There`s still a way to go before reaching the same figures prior to the housing crash. The record remains for houses sold in a single at 251,649 homes, which was set in the second quarter of 2006.

Whilst 95% of transactions were for private houses, a majority of the resale market, just 15.1% of sales were for new homes. Even though signs of recovery are encouraging for the new homes market, a huge repository of houses still remain that need to also be sold. Slightly surprising is the fact that new housing sales are not rising quicker as stated recently in another report that new houses are being sold for less than the construction cost, enabling house buyers a unique opportunity which may not return for many years.

At the top the sales chart in the third quarter was Andalucia (16,360 transactions); that was followed by Valencia (12,116); then closely by Catalonia (11,983) and finally Madrid (10,272).

A major contributor to slaes figures were foreign residents of Spain. In the third quarter their purchases accounted for 12,764 transactions, which is an increase of 17.2%, the 13th quarterly rise.

Total number of sales to foreigners which also includes non-residents reached 13,789, or 17.2% of the total house purchases in that quarter.

The most popular areas were Alicante (3,323) Malaga (1,918), Barcelona (1,103), Madrid (839) and Tenerife (721).

S & P Predicts Spain Will Grow by 0.5% in 2014

According to their quarterly report on the economy of the eurozone, the credit rating agency, Standard & Poor’s (S & P), predicts that the Spanish economy will grow by 0.5% in 2014, one tenth less than their July estimate, and that unemployment will continue to increase up to a maximum of 27%.

S & P has maintained unchanged the forecast for Spanish economic contraction in 2013 of 1.5%, but has improved by five tenths the unemployment rate with which the Spanish economy will close this year, from 27.2% to 26.7%.

However, the unemployment forecast for next year remains unchanged, at 27%, as the agency assumes that the unemployment rate will rise again in 2014, before starting to decline in 2015.

The Spanish economy is expected to grow again in  2014
The Spanish economy is expected to grow again in 2014

The agency also includes for the first time in its quarterly report, their forecasts for 2015, the year in which they predict the Spanish economy will grow by 1.1% and the unemployment rate will drop to 26%.

In the agency’s worst case scenario, with a longer recession than previously predicted, Spain’s GDP could fall by 1.9% this year and continue to decline in 2014 and 2015, with a decline in activity of 1% and 0.3%, respectively.

In the report, the agency notes that the Spanish GDP performed better in the second quarter than in the first, and highlighted the “notable exception” in the good performance of Spain’s exports compared to its European partners.

On the other hand, they stressed that unemployment has fallen for four consecutive months since March, suggesting that there has been something more than a temporary increase in tourism. In addition they noted that the August PMI had also been “good news”.

Regarding the eurozone, the agency said that although the data indicated a general improvement in economic conditions, which points to stabilisation in the second half of 2013 and modest growth in 2014, a “robust” recovery is not yet expected.

According to El Economista, S & P forecasts a GDP contraction of seven tenths for the eurozone, thus improving the previous estimate of a decline of 0.8%, while for 2014 they predict growth of 0.8%, one tenth more than the previous forecast, and 1.5% in 2015

Article source: Kyero.com

“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

Eurostat confirms Eurozone contraction in second quarter

The eurozone economy shrank by 0.2% during the second quarter, as the European statistical office Eurostat confirmed yesterday morning. The publication of this information is confirmation of the figure put forward on 14th August. In all the 27 countries that form the European Union, Eurostat had forecast that the contraction was also 0.2% between April and June, although the revised report released yesterday by the organisation corrects the data putting the fall at 0.1%.

Activity in Europe is leaning towards a new recession after growth was zero in the first three months of the year in both the eurozone and the European Union. Compared with the same period last year, GDP fell by 0.5% between the countries that share the euro and 0.3% among the EU-27.

There are important differences between the countries that share the single currency. Germany, the Netherlands, Austria and, to a lesser extent, France, are better able to resist the onslaught of the crisis while Spain, Italy or Portugal suffer more strongly the effects of the economic downturn.

GDP in the second quarter fell by 0.4% in Spain, by 0.7% in Italy and by 1.2% in Portugal. For Greece, for which there was no data on any quarterly change, the fall came to 6.2% compared with the same period last year, the biggest in the whole of Europe. Other countries in central and northern Europe have also suffered severe contractions. The biggest of all in this group has been that of Finland, with a fall of 1.1%, followed by Belgium (-0.6%) and Denmark (-0.5%).

El Pais reported that Germany resisted the downward trend and registered growth of 0.3% compared to the first quarter, while France recorded its third consecutive quarter of stagnation.

Outside the euro, the UK confirms it is in recession, with a fall in GDP of 0.5% in the second quarter, after recording negative data in the two previous periods. The best data registered in the EU are for Sweden, with an increase of 1.4%, Latvia, whose economy experienced an improvement of 1%, and Slovakia (0.7%).

As for the components of the GDP, household consumption fell in the second quarter by 0.2% in the eurozone and the EU, after falling 0.2% and 0.1% in the previous period, respectively. Fixed capital formation fell by 0.8% in the eurozone and by 0.9% in the EU-27 (in the first quarter the decreases were of 1.3% and 0.7%, respectively).

Exports rose by 1.3% in the eurozone and by 1% in the EU (after increasing by 0.7% and 0.5%, respectively, in the first quarter) and imports grew by 0.9% in both zones after dropping by 0.2% in the previous three months.

Article source: Kyero.com

Spain in Figures 2012

Spain in Figures 2012
Spain in Figures 2012

The National Institute of Statistics have released their annual publication Spain in Figures.

The document is designed to give interested parties a general and updated perspective of Spain. This publication is informative and direct, and provides statistical information regarding Spain and its status in Europe.

Spain in Figures contains information relating to population, health care, employment, industry, energy and more and gives a great insight.

For those who don’t have time to read the complete report (58 pages) here are some points that I found interesting.

  • In 2009 Spain produced 8% of the total air pollution in the EU. 25.7% of that was generated by transport.
  • 2011 was the warmest year in Spain for 40 years with an average temperature of 16°C.
  • In 2009 Spain generated 24.8 million tonnes of urban waste, 5.9% less than in 2008.
  • On January 1st 2011, The population of Spain stood at 47.2 million.
  • 12.2% of the population registered in Spain in 2011 was foreign, this figure reaching 5.7 million persons, 0.1% more than the previous year.
  • 62,611 Spaniards moved abroad in 2011.
  • In 2011 Spain received a total of 56.7 million international tourists, representing an interannual increase of 7.6%.

You can download the report in chapters, or in one document, from the INE website: Spain in Figures 2012

Spain struggles on as an EU bailout gets closer

Guest post by Jimmy Kane

Will the Euro survive the year?
Will the Euro survive the year?

Spain’s economy is still slowly limping along, getting worse all the time. Concerns about the European country’s financial condition and mounting doubts about Europe’s ability to bail out the country dragged stock markets and the euro sharply lower on Wednesday.

Although Greece may be the epicenter of the debt crisis, Spain has been a growing source of stress and fear over recent weeks. Everyone’s watching Spain’s banking system and this microscope view has magnified last week after Bankia, the country’s fourth largest lender, announced it need 19 billion euro ($23.8 billion) in state aid.

Not surprisingly, investors are biting their nails that Bankia’s woes might translate across the Spanish banking sector, which suffered terribly from the collapse of the construction industry. This economic recession has unemployment at almost 25 percent, which just adds worry fuel to the concern fire. Some speculate Spain will become the fourth euro country to be bailed out after Greece, Ireland and Portugal.

Given that precedent, who’s to say the rest of the European Union wouldn’t follow suit? It’s not like Germany can bail out the entire continent. Naturally, the European Union’s executive office on Wednesday called on the eurozone to create a so-called “banking union” that can centrally oversee and bail out the sector if it needs to be. Lately, it’s a weak link in a very weak chain in the continent’s financial system.

However, bank failures have already overwhelmed the public finances of Ireland, which has forced it to take an international bailout. Will Spain be next? The European Commission recommended that Spain be given an extra year to meet its deficit targets, however likely or not that seems to happen.

The problem with the idea of bailing out a country the size of Spain is that its economy is double the size of the three countries already bailed-out and investors are skeptical whether a rescue operation can be mounted or would even do anything.

The general malaise hit stocks even harder, particularly in Europe, and the selling was aggravated after a VPRC poll for Epikaira magazine in Greece gave Syriza 30 percent of the vote, followed by conservative pro-bailout New Democracy at 26.5 percent.

This year, Spain’s stock market has been performing as terribly as a legless circus monkey on a unicycle. It dropped yet another 1.6 percent Wednesday – and the country’s cost of borrowing has rocketed higher to frightening levels. The euro itself fell another 0.6 percent to $1.2411, a tiny bit up from its nearly two-year low of $1.2405 hit earlier. Economic confidence also continues to slump.

Jimmy Kane is an avid traveler and Spanish real estate hobbyist. When he’s not traveling or studying the Spanish property market, he maintains a telecommunications website out of his hometown of Dallas, Texas.

The Potential Pitfalls of Relocating to Spain

Leave the rain behind you
Head to Spain and leave the rain behind you…

Most of us dream of living life slowly in the sun. Many Brits try to realise this dream by moving abroad. Australia, the States and France are all popular relocation destinations, but nowhere rivals Spain when it comes to the number of British expats. It is estimated that over half a million British people live in Spain, which is more Brits than any other country outside Britain. The most common reasons for moving include the weather, the easy going lifestyle, the vibrant culture and the adventure of living abroad.

However in many cases the dream has turned into a nightmare and the current economic issues in Europe, Spain in particular, have made living in Spain a completely different ball game to how it was pre-2007. There are a number of things that you should consider before committing to a move and as with most things; it’s not always as straight forward as it is made out to be.

To help you avoid making the same mistakes as others we have provided a rundown of the main pitfalls of moving to Spain.

1. The State of the Spanish Economy – At the moment this is by far and away the main reason not to move to the country. If you think the UK economy is in turmoil take a look at Spain’s. Unemployment is at almost 25% and climbing. This makes the UK’s 8% look positively encouraging. Spain’s high unemployment rate translates to a mind-bending 1.5 million households that have no earners. And as bad as things are now it looks set to get even worse with a complete economic collapse likely. The recent multi-billion Euro bailout of Bankia says it all. The weather in Spain might be pleasant but the financial forecast is somewhat bleak.

2. The troubles of returning to the UK –There are countless tales of people who have moved to other countries, often Spain, to retire and live a laidback life only to suffer a disaster that requires them to go ‘home’ again. Illness, death, unhappiness and financial troubles are all common reasons for expats realising that their dream isn’t what they had hoped for. But if you think moving back is as easy as moving away think again.

Most people sell their UK home to buy a Spanish property. The Spanish property market is cheaper than the UK so most use the money from their home sale to buy a new house with cash left over. The leftover cash inevitably gets spent elsewhere. If disaster does strike and you have to sell your home in Spain to move back to the UK you, like many others, could find yourself out of pocket and struggling to maintain the standard of living you’re used to, back in the UK. Is this a position you want to be in?

The financial uncertainty mentioned above makes this problem ten times worse. Keeping a home in the UK and bank accounts with UK based banks is always wise.

3. It simply isn’t what you’re used to – Life in Spain is very different to the UK and adapting can be very challenging. A new culture, language and society can be hard to grasp. Everything moves at a much slower pace and it isn’t as easy to get everyday tasks done. Banks open at inconvenient times, most shops close for lunch and people generally do less than people in the UK. British manners and conduct don’t apply in Spain. The person who shouts loudest is usually the person who gets served first and waiting quietly and politely won’t get you anywhere. The same attitude applies to driving and indicators are seldom used.

It’s not necessarily a worse way of life; it’s just one that you won’t be used to. The best way of finding out if it will suit you is to go on a long self-catered holiday there. Have a look at short term homes to rent. Having to do things for yourself will open your eyes to the reality of living abroad and will help you to answer the question; do I really want to live in Spain?

There are many factors that make moving to Spain an attractive proposition. The food, weather and laidback lifestyle are all great. However there are also some major pitfalls and now more than ever do you need to consider if it’s the best path to take. Be realistic. Is moving to a country that has a severe economic crisis looming really the best idea? The houses for sale might be cheap but things could get worse.

PropertyLive.co.uk is a leading UK property authority, with thousands of current rental and sale properties available. To find out more click here, or here to view rentals.

Spain will survive the crisis

Spain will not only survive the crisis but will come out of it “strengthened”, according to Luis de Guindos, the Spanish Economy Minister.

“Spain is a country that has made mistakes in the past and accumulated imbalances. It is now in the process of correcting all these problems”, de Guindos said, talking to German newspaper Frankfurter Allgemeine.

He went on to say that “We will put our budgets in order. Our government, elected four months ago, has an absolute majority in parliament and a clear mandate for savings and reforms. With this we will succeed.”

In response to questions regarding the 25 billion euros in budget cuts recently announced he said that financial consolidation is inevitable, “The previous government left us with a deficit of 8.5% instead of the 6% forecast”.

“We must therefore make further efforts even in the midst of a recession, and we must restore confidence, especially in the Spanish economy. That means not only reaching a deficit of 5.3% this year, but 3% in the coming year. We are committed to that goal”, the minister explained.

De Guindos once again stated that “what we are doing is absolutely necessary. Spain currently has a funding problem. If the markets do not see consolidation then state funding could get more expensive. And that could lead to difficulties in the private sector also. Therefore it is essential to control the deficit.”

Although there were mixed reactions to the Spanish budget amongst EU members de Guindos is convinced that “the markets will react positively when they have studied our budgets in detail”.

Furthermore De Guindos recognises that 2012 will be a difficult year for Spain but “it will also be the year in which we will lay the foundations for recovery. The government is aware of this and does not want to raise false expectations for this year’s forecast. It will be hard with less growth and, unfortunately, more unemployment. But we will be laying the foundations for a better 2013.”

While recounting the first 100 days of the PP government de Guindos pointed out that he had approved a law of stability which “applies to all: central government, autonomous regions and municipalities,” and had approved labour market reforms which would “change the system largely responsible for high unemployment.”

“Therein lies the weakness of our economy,” said de Guindos referring to the countries huge unemployment figures which are likely to increase slightly this year before dropping in 2013.

De Guindos announced further steps to improve the struggling country including “reform of public services, especially health and education.”

He also mentioned reforms within the banking sector that “will get rid of the weakest” and will mean “a much healthier financial sector with fewer, but stronger, banks.”

Luis de Guindos “convinced” by labour reforms

Luis de Guindos
de Guindos is positive about reforms

Speaking at a banking seminar in Madrid, the Minister of Economy and Competitiveness, Luis de Guindos, said that if the government had implemented its labour reforms earlier there would be a million fewer unemployed. However, he also said that he had hopes that the reforms would generate “positive effects” on employment by the end of 2012 and would “moderate” negative developments seen in the market during the last quarter.

“The Government is convinced that the labour reform will have medium-term positive effects on employment at the end of this year”, de Guindos said at the meeting organised by El Pais and Bankia.

He also added that with the flexibility of the reforms, Spain could have “saved” a million people from unemployment.

He referred to the reforms as the most “wide-ranging, most substantial and decisive” reforms introduced in the last 20 years. “It lays the groundwork for an effective recuperation of employment,” he explained.

Sr. de Guindos went on to say that those who “have most” should show solidarity and “pitch in” to help achieve the objective of the adjustments. “The Government will continue asking those who have more to contribute more,” he told reporters.

Diario Sur reported that de Guindos made assurances that the Government’s reform agenda “does not end here”, mentioning a reform of the regulatory bodies. He also said the reforms for the approval of business licences for opening small shops would happen “shortly”.

The minister also hinted that the economy is heading to another recession, but expressed his confidence that there is “light at the end of the tunnel”.

“The banking reform will lay the foundation for the economy to create jobs again, 2012 will be a tough year, but it will pave the way for future growth,” he concluded.

Two more years of recession for Spain

The IMF say it's not over yet

On Tuesday the International Monetary Fund released it’s latest global projections and Spain isn’t looking too good.

The report says that Spain’s GDP is likely to shrink by 1.7% this year. It will also see a budget deficit equivalent to 6.8% of GDP, and 6.3% in 2013 – both figures slightly higher than the 5.1% and 4.4%, respectively, predicted in the Fund’s September forecast.

A “mild recession” is forecast amongst the 17 members of the euro-zone as a whole with GDP contracting by 0.5%. The IMF did, however, praise the “substantial” spending cuts and tax reforms adopted by Spain’s new government in an effort to reduce the deficit.

The IMF’s chief economist, Olivier Blanchard, said on Tuesday that “the world could be plunged into another recession”, if the crisis in Europe continues to intensify.

He further urged European leaders to meet the sovereign debt problem head-on through new monetary policy, the creation and strengthening of “firewalls,” and bank recapitalisation.

In response to the report Spain’s new conservative prime minister, Mariano Rajoy, said “Spain will respect the deficit target. Today that is 4.4%, and Spain will respect that target,”

Spain may respect the target but meeting it will be another story.