Malaga and Alicante attracted nearly half of purchases by foreign residents

The sale of homes totalled 70,196 operations in the third quarter, 6.8% less than in the same period of 2012 according to the Ministry of Development, showing that home ownership by foreigners grew by 24 7% to 10,960 transactions, 15.6 % of the total. Home sales fell as in respect to the second quarter when they decreased by 4.2%, although away from the crash this suffered 21.5% in the first three months of the year .

However the data from Formento shows in the last twelve months between October 2012 and September 2013 sales transactions were 341,104, which is  1.4% more than in the previous twelve months. Alicante and Malaga distributed nearly half of purchases by foreign residentes, 13,918 transactions were for new housing which is 19.8% of the total, while the resale market totalled 56,278 , 80.2 %.

In the case of private housing, operations amounted to 66,477 between July and September this year, 94.7% of the total, while 5.3% or 3,179 transactions were for housing.

marbella
Half of foreign property buyers purchase in areas like Marbella in Malaga and Alicante

By region in the last 12 months nine of them have had increased sales, while the remaining eight and the autonomous cities of Ceuta and Melilla have produced falls in property sales. Notable increases were in Murcia ( +14.3 % ), Aragon (+9.4 %) and Catalonia ( +7.6 %) , compared with declines of Cantabria ( -17.3 %) , Basque Country (- 15.3%) and Castilla -La Mancha (-14.6 % ), respectively. The purchases made by foreign residents in Spain experienced an annual growth of 24.7 % over the third quarter of 2012 , with 10,960 operations.

Together, the purchases made by foreign – resident and non – residents accounted for 12,070 transactions , 17.2% of the total , which is a record since 2006. By provinces of which recorded the highest number of sales by foreign residents accounted for Alicante ( 3,158 operations ), Malaga ( 1552 ), Barcelona ( 889 ) , Girona ( 758 ) and Tenerife ( 705) . Only foreign demand activity in the housing market ” remains in the doldrums .” According to Beatriz Toribio of Fotocasa, “now they’re again buying property in Spain foreign investors are seeking good opportunities in this time of low prices “. ” May we continue in positive figures, the pull of foreign demand is good because it came from many years of sluggishness ,” but ” should not lead to euphoria because the sector will recover only thanks to foreign demand,” says Toribio.

 

Depreciation on Spanish Foreclosed Homes Reached 63%

Moody’s credit rating agency indicated recently that the accumulated depreciation on foreclosed homes in Spain since the beginning of the crisis has reached an average of 63%. This percentage is well above the 41% average decline registered, according to the National Statistics Institute, in housing prices between the first quarter of 2007 and the second quarter of 2013.

The rating agency stated that the largest price declines registered, related to sales of foreclosed homes in the regions of Murcia (-78%), Valencia (-71%), Catalonia and Andalusia (both -69%) as well as the Canary Islands (-67%).

foreclosed
Depreciation on foreclosed homes in Spain since the beginning of the crisis has reached an average of 63%

In these regions, the average decrease in housing prices, between the first quarter of 2007 and the second quarter of 2013, was 32% in Murcia, the Canary Islands and Andalucía, 37% in Valencia and 48% in Catalonia.

El Mundo reported that, in the whole of Spain, the greatest decreases in the price of housing since the beginning of the crisis correspond to Catalonia and Aragon (48%), Madrid (46%), and the Basque Country (43%). In Castilla y León, the price of housing has accumulated an average decrease of 39%, while in Castilla-La Mancha and Valencia the average decline is 37%.

When analysing only foreclosed homes, the prices fell by an average of 64% in Aragon and 62% in Madrid, while they dropped by 61% in Castilla-La Mancha and by 60% in Castilla y León. The decline in prices registered in the Basque Country reached 56%.

Moody’s warned: “The largest losses are concentrated in the foreclosed properties on the Mediterranean coast, Andalusia and the Canaries ( … ) although it will not lead to a lowering in the rating, taking heavy losses on foreclosed mortgaged homes is detrimental for the credit”.

 

Article source: Kyero.com

Spanish property price data shows a more moderate decline in November

Property prices in November fell 7.2 % from the same month last year, according to the index imie tinsa appraiser. This data records a more moderate decline compared to the previous month, the maximum drop accumulated since December 2007 is 38.5%.

Regarding behaviour by areas,  capitals and big cities suffered cuts highlight with a fall of 7.9% , followed by metropolitan areas and other municipalities both with a descent of 7.8%, very close to the towns of the Mediterranean Coast stood with a fall of 7.5%.

imie-noviembre
Graph supplied by Idealista

A  smaller decline compared to November last year, experienced by the Balearic and Canary Islands with 0.9% drop and has maintained a stable trend since mid-2012.

In terms of the accumulated areas since they reached their highest value cuts, the Mediterranean Coast adjustment in November stood at 45.4 %, was followed by the capitals and big cities with 42.2%, Metropolitan areas with 41.9 %, the other municipalities with 33% and closing the series the Balearic and Canary Islands with 27.3%.

 

Price of Sold Homes Up 0.7% Due to Market Volatility

According to the General Council of Notaries statistics for August, with regard to housing prices, they noted a “high volatility” in the market due to the reduced number of transactions and considered that, perhaps for this reason, the price per square metre of homes sold in the eighth month of the year recorded growth of 0.7%, reaching 1,219 euros.

This increase was due to the rising price of family homes sold (32.4%) in a month with very few transactions (3,518 units). However, the price of apartments registered a decline of 10.8% year-on-year, to 1,185 euros per square metre, in line with the trend observed in recent months.

New apartments registered a price of 1,424 euros per square metre (-5%) and second-hand, 1,153 euros per square metre (-9.1%).

spain_property_sold
Spain is about to come out of recession, so have prices hit their lowest level?

El Mundo reported that the number of house sales registered a decline of 28.1% year-on-year in August and totalled 15,027 transactions. The decline has been driven by the 31.4% drop in the number of purchases of apartments and a drop of 14.8% in transactions for family homes. The number of purchases of new apartments fell by 56% in August, year-on-year, while transactions for second hand fell by 19.5%.

In addition, the number of new mortgages contracted in August registered a drop of 33.5% year-on-year. According to the Notaries, the sharp reduction in the number of mortgage loans is due to the decline in the granting of mortgages for the purchase of a property (-34.9%). Specifically, the number of new mortgages granted for house purchases fell by 35.6% year-on-year, and those granted for other real estate transactions dropped by 28.5%.

Moreover, mortgage loans for construction fell by 31.9%. New mortgage loans for building a home dropped by 36.8% year-on-year, while loans for other types of construction fell by 10.4%.

The average mortgage value for the purchase of a property fell by only 0.9%, to 116,162 euros, and in the case of the purchase of a home, the Notaries noted an increase of 0.4% (to 111,790 euros ). Also, the average mortgage value for loans granted for construction purposes fell by 22.3% year-on-year, to 281,504 euros.

Finally, the percentage of homes purchased with mortgage financing stood at 31.8%, and the average percentage of the home purchase price financed was 76.7%.

 

Article source: Kyero.com

 

What to watch out for when buying a rental property

In today’s uncertain economy, home ownership is becoming tougher for many individuals. Investors are turning to the idea of owning a rental property because a greater percentage of the population is unable to secure financing for real estate and are therefore living in a unit owned by someone else.

Rental properties may be considered a rather safe way to diversify one’s income, but those interested in becoming a landlord should first consider the pros and cons.

Owning a rental property is truly a hands-on endeavor, one that has many legal strings attached. A house or condo needs constant attention and there are many ways in which money can trickle through the property and be lost forever. Before deciding to invest in a rental property, make a checklist and carefully examine the possible monetary losses.

Location and Price

Orlando Vacation Rental VillaThe location of the rental property is the single most important factor when choosing whether to invest. Most renters look at the location with respect to where they attend school, work, or shop. Singles will not want to commute very far if they can avoid it.

Families will be checking the location of nearby schools. If there are a large number of rental properties in the neighborhood that are currently vacant, chances are the area is attracting little interest from renters.

A property will be useful as a rental unit only if the average price charged in the neighborhood compares favorably with the medium home values. It is a good idea to calculate the average value of the homes in the vicinity and compare this figure against the average annual cost to rent a home in the neighborhood. While each market varies, if the ratio is higher than 21-1, owning a home in the area is more expensive than renting.

Deciding the Rent Amount

Obviously, customers will respond more favorably to lower rent prices, but a good amount of reason must be used when setting a monthly rental cost. The total of the mortgage, property insurance, taxes and any association membership costs must be taken into consideration. The owner is responsible for all repairs including cracked walls, roof leaks, broken fixtures or appliances, and worn carpets.

Investors should look at similar properties in the neighborhood and compare rental prices among those having similar amenities. Two houses of the same size and with similar lots may have quite different rental rates because the interior of the homes are distinctly different.

Obtaining Financing

Many lenders have more strict loan qualification requirements for rental properties, especially if the owner will not be living on the property. Banks and other financial institutions must consider the possibility that the unit may be vacant for a certain percentage of time, generating no income for the owner. Banks tend to be a bit more lenient when it comes to multiple-unit properties that are already occupied.

Owners living in one of these units may qualify for reduced interest rates. Owner-occupied loan packages save a good deal on interest and still allow investment income from the other units.

Check the Property Taxes

These taxes are subject to change if the property is not currently used as a rental. Cities and counties often give a tax break for properties that are owner-occupied and are also being used to generate income. If the owner does not live on the property, no tax advantages will be realized.

Jason Nelson contributed this article on behalf of Kanetix.ca

TINSA December House Price Report

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%.