Spain Ranks Third For Investment in Europe

Madrid remains popular amongst investors
Madrid remains popular amongst investors

Further to my previous article regarding foreign investment in Spain, research released by the CBRE has placed Spain as the third choice for European investment in real-estate.

According to the ‘Global Investors Intentions Survey 2016’, 10.2% of respondents suggested that Spain would be their third choice for European investment during 2016. Only Germany and the UK came ahead with 17% and 15.1% respectively, beating other once popular European countries like France and the Netherlands.

When looking at cities within Europe, Madrid maintained its position as the second most attractive city on the continent for real-estate investment, chosen by 12.2% of respondents, just behind London, but ahead of Paris, Berlin and Warsaw.

Diversification is the word of 2016 according to the report with more cities getting a mention than in similar research conducted in previous years. The top 15 saw first time entries for cities including Budapest, Prague and Bucharest.

Product Choice

While 30% of investors specified the housing market as their first product choice, other markets have also made gains with student residences, health centres and leisure facilities all being noted as worthy of investment this year.

The retail sector also appears to be making a recovery thanks to rising consumer confidence and increased consumption. The sector accounted for 22% of investment in 2015 with a predicted rise to 27% in 2016.

Despite this, office property continues to hold high interest for investors with 37% of respondents stating they have or would invest in business premises.

Backing up thoughts that residential property is back on investors’ shopping lists is a 7% increase in residential investment making it the fastest growing sector with 12% of respondents putting their money into homes.

Of the respondents 82% stated that their investment activity during 2016 will be the same or greater than in the previous year.

Rest of the World

North America was the global first choice with 48% saying they had or would invest in the USA in 2016, while 26% named Europe as their first choice. Other once popular regions didn’t fare so well with Asia Pacific seeing reduced interest partly due to concerns about the China slowdown and a “murky outlook” for other emerging markets in the region.

Only 4% suggested Central and South America as their investment choice while 1% chose Africa for their money. Central & Eastern Europe also failed to make an impression attracting only 8% of the reports respondents.

 

Advertisements

Foreigners Invested More in Spain in 2015

Foreign residents invested heavily during 2015
Foreign residents invested heavily during 2015

As we continue to see markers suggesting the Spanish property market has recovered from the crisis, the Ministry of Public Works has released data that corroborates what we’ve been seeing.

During 2015, investment in real-estate by foreign residents increased by 15% compared to the previous year. In monetary terms this amounts to 9,918.6 million Euros.

The data shows that of the total investment, the vast majority was for resale, or second-hand, properties accounting for 8,808.6 million Euros of the total. The remaining 1,110 million Euros was invested in new-build properties.

When comparing the data to 2014 we see that the resale market has increased by 14.5% while the market for new-build property grew by 18%, El Economista reported.

There are no surprises when looking at the regional distribution of the invested monies. Andalucia attracted the most investment from foreign residents accounting for 2,255.6 million Euros. The usual suspects, Valencia and Catalonia, predictably came close with 2,202.3 million and 1,797.2 million Euros of foreign investment, respectively.

 

Foreign investment in Spanish property is the highest in nine years

According to the latest data from the Bank of Spain, foreign investment in Spanish real estate reached 2,834 million euros in the first half of 2013, the largest amount in nine years, while Spanish spending on property outside of the country registered its lowest level in 10 years, at 199 million euros. Compared with Spanish citizens’ loss of purchasing power and the difficulties of gaining access to credit, foreign appetite for assets located in Spain has been increasing over the last four years. All this in a context marked by the significant price adjustments registered and the real estate surplus.

Foreign Investment in Spanish Property Highest in Nine Years
Foreign investment in Spanish property is the highest in nine years

The Bank of Spain reported that foreign direct investments in properties in Spain increased by 16% in the first half of the year compared with the same period of 2012. However, despite this amount being the highest since the economic crisis began, foreign spending on Spanish property still remains far from the figure reached in 2003, when in the first six months of the year it exceeded 3,500 million euros, 20% more than at present. In contrast to the level of foreign investment in property in Spain, Spanish investment in property abroad has fallen significantly since the boom years of the real estate sector when, in the first half of 2007, it exceeded 1,800 million euros.

In fact, up until June of this year Spanish spending on property abroad is 12% lower than in the first six months of 2012, and 89% less when compared with the maximum reached in the same period of 2007. According to a recent study by the global property consultancy, Knight Frank, such is the attraction of Spain that international funds are ready to invest 14,000 million euros in the Spanish real estate sector in 2014.

Furthermore, according to statistics compiled by the General Council of Notaries, the number of home purchases made by foreigners in Spain during the first six months of the year grew by 13.6% compared with the same period of 2012, reaching 24,552 transactions. The Notaries reported that non-resident citizens accounted for the majority of the transactions, with the most being registered by the Belgians, with an increase in transactions of 78.1%, the French, with 70% more, and the Germans, with 35.3% more.

El Mundo reported that, although it is still the non-resident British citizens who buy most homes, with an increase of 24.6% to 1,244 operations in the quarter, the level of acquisitions of this group have continued to register a gradual decline. Home purchases made by other nationalities have also reduced, with transactions by Ecuadorians and Colombians falling by 34.5% and 27.7%, respectively, and those of the Romanians falling by 1.1%. And, according to the latest study released by the Sociedad de Tasación, house values have plummeted 47.7% since their maximums registered in the boom years and now stand at an average of 1,253 euros per square metre.

At the end of the first half of 2013, Spanish families spent 32% of their annual gross income available on buying a home, employing an average of 5.7 years. To purchase a property of about 90 square metres (the basis on which the Bank of Spain prepares its calculations), families required 5.8 years in the first quarter of 2013, and 5.7 years in the second.


Article source: Kyero.com

Spain “seen as safe investment”

Spain
Spain's beaches attract investors

Despite the continuing crisis and much negative press buying a property in Spain is still considered to be a wise move by some experts.

A Place In The Sun editor, Liz Rowlinson, said there has been a noticeable shift back to countries like Spain and other established markets as they are seen as a safer investment than other emerging markets.

Ms Rowlinson went on to say that Spain is currently one of the best places to buy as prices have fallen “so much that it’s now within people’s budgets”.

“[Spain] still offers all the things that make it our favourite holiday destination”, she explained citing amenities such as golf courses and beaches, as well as the climate as the main reasons Spanish property remains popular.

Also in the last few days Robin Haynes of Currency Index noted that British buyers considering purchasing real estate in Spain could now take advantage of the strength of the pound against the euro. He explained that investors could get up to eight per cent more for their cash when buying euros, compared with July 2011.

Prime locations attracting investment

Some of Andalucia’s prime locations have seen a slight improvement in their property market over the last 12 months, a report has claimed.

Barbara Wood, an agent with The Property Finders, said that investors were focusing on prime assets with the market currently in a similar condition to that of the mid-1990’s.

“In 2012, the buyer is remarkably similar to the 1995 buyer – cash rich […] and only interested in quality properties in the very best locations,” she said, adding that “virtually 100 per cent” of property purchases in Andalucia are within “a handful of prime locations”, with  Marbella being one of those hotspots.

Ms Wood went on to suggest that over the next 12 months buyers would be most likely to purchase in the prime areas and properties of  higher quality, ignoring the less desirable areas and properties in poor condition.

This follows comments made earlier this week by Marc Pritchard, sales and marketing director at Taylor Wimpey de Espana, who is positive about the outlook for the Spanish property market in 2012. Mr Pritchard said that he doesn’t expect house prices in the most desirable areas to fall further this year and instead expects to see significant growth in these areas.

Russian and Arab investment boosting the coast

Luxury property is attracting investment
Luxury property is attracting investment

Although the property market as a whole is faltering it seems that Russian and Arab investors are keeping the market afloat purchasing homes between 4 million and 10 million euros.

There has traditionally been a good deal of investment from the Russian market here on the Costa del Sol and 2011 has continued this trend with many Russians purchasing multiple high-end properties.

The Costa del Sol has recently received members of the Qatari royal family and other dignitaries from the Arab Gulf creating rumours of massive investment in multiple development plans. The visit have gone the other way too with Angeles Muñoz, Mayor of Marbella, recently visiting Qatar, Abu Dhabi, Dubai and Kuwait.

President of the Andalucian Developers and Residential Tourism Federation, Ricardo Arranz, explained that there is high interest in the Costa del Sol from the Russian and Arab markets. Investment from the Chinese is also on the rise.

Arranz went on to say that the banks are currently selling properties with large discounts, up to 50%, mainly on the coast between Marbella and Estepona. He also added “the only positive thing about legal scandals such as the ‘Malaya’ and ‘Ballena Blanca’ cases is that available houses are becoming scarce in Marbella and more need to be built, which will create employment”.

I’m not sure I agree with that though. There are thousands of empty properties here on the coast. It may be an idea to create a census of these wasted spaces and start housing people in need. The Costa del Sol is already over-developed. There is no need for more housing along the coast. The development I live in is only 40% occupied and that is not unique. Make use of existing property before you build any more!

Spanish manufacturing slumps

Surveys released earlier today (Monday) showed factories in Spain are deteriorating at the fastest pace in more than two years.

The Spanish economy is sagging under the weight of harsh austerity measures, introduced by Prime Minister José Luis Zapatero. Many other Euro zone countries have also introduced various levels of austerity measures.

Meanwhile, France saw manufacturing decline for the second month in a row. Even Germany, with the biggest and arguably the most prosperous economy in the Euro zone, saw manufacturing growth effectively come to a standstill.

Chris Williamson, chief economist at PMI compiler Markit said “Manufacturers are reporting the worst business conditions for over two years, facing a combination of lacklustre domestic demand and falling export sales,”.

Euro zone unemployment remained at 10 percent for August. This figure is not representative of the individual countries and does not reflect the disparities between fairly restrained joblessness in Germany and France, and the far larger proportion of unemployment in Spain and Greece.

 

Z2KEPZMZZHW9

OPP Live & Property Investor Show – Last Chance to Book a Stand

You have just 1 week left to book your stand at The Property Investor Show & OPP Live (13-15 October, Excel London).

This is the premier event of the year for the UK’s property investors and trade professionals – and the place to be for any company serious about conducting business with them.

It is also the UK’s longest established dedicated property event and, over 3 days, thousands of visitors (typically owning 4+ investment properties each) will descend on London to appraise the opportunities from a broad spectrum of UK and international exhibitions.

This year’s show highlights will include…

Live Auction – Friday 14th October – Following the success of last year’s auction – which generated a revenue in excess of £9 million! – the show is delighted to confirm that a follow up will take place within the exhibition on Friday 14th October ONLY. Presented in conjunction with ‘MustBeSold.com’, Graham Penny – well known to followers of BBC TV’s ‘Homes under the Hammer’ auction programme – will again bring down the gavel on 150 – 200 lots.

Property in Pensions – A dedicated SIPP Zone, coordinated by property consultancy ‘Intelligent Partnership’ will feature for the 3rd successive year. The SIPP Zone offers alternative pension planning with free advice and a road-map to build or rescue existing pension schemes. For example: Hear about innovative farmland investment projects from the Food Water & Energy company, giving investor returns based upon two harvests a year starting at 9% and rising to 14% a year.

Holiday & Park Home Investment – One in five holiday-bed nights in the UK is spent on one of 4000+ parks. In fact the ratio would have been higher in 2010 but for many parks having to refuse visitors because they had reached maximum occupancy. This trend has not gone unnoticed by the investor community – and many have identified ‘Holiday’ and ‘Park’ and  investments as an emerging sector that fits within a balanced investment portfolio.

Alternative Investments – A growing trend among the property investors visiting the show in recent years has been a demand to acquire different assets to add to their property portfolios. Reflecting investor demand, this year’s visitors will be able to review the investment potential of a range of alternatives, including …

  • Car park spaces
  • Residential care homes
  • Forestry
  • Land
  • ‘Green Investments’ (e.g. carbon credits, biofuel)

2 x seminar programmes – This year, we are delighted to include 2 separate programmes.  The Investor programme will include 30 new speakers while The OPP Conference programme will concentrate specifically on ‘trade issues’ in international markets. All programmes comprise a mix of seminars and panel debates of varying length – and many sessions will be fully booked before the show opens.

Call: James Elliott or Sumit Pal on +44 (0) 20 8877 0610

Email: enquiries@propertyinvestor.co.uk