Spain Real Estate News

THERE WAS just one sale at an overseas property auction in Dublin last night, during which real estate was being offered for up to half of its original value.

The Spanish house, which sold for some € 180,000 last night, was in Marbella and was originally bought by the vendor for some €300,000.

Over 200 people gathered at the Citywest Hotel for the auction, which offered over 60 foreign properties in places previously popular among Irish investors, such as Antigua, Bulgaria, Cape Verde, Dubai, Spain and Turkey.

However, organisers were happy with the result, describing the auction as “just the beginning”.

“We didn’t expect a lot of offers through the night. Since the auction and during the break we have had 10 to 15 buyers come to us who are interested in properties, ” Ann Collins of Propertyauction.ie said last night.

Many of the properties are being sold at 20 or 30 per cent discount by vendors who need to sell them quickly.

“A lot just want to get rid of them. They may have lost their jobs and can’t pay for a second mortgage as well,” Ms Collins said.

The organisers argue that this novel way of selling overseas properties is also an opportunity for bargain-seeking buyers.

“They can’t invest in the stock market or bank shares, but in a downward property market there is only one way it can go,” Ms Collins said.

Another overseas property auction is planned for April.

Source: Irish Times

MADRID, Jan 27 (Reuters) - A creditor of Spain's Nozar has asked a judge to put the privately held property company into administration, court documents showed on Tuesday, a move that would lead to Spain's second biggest corporate default.

Last year creditor Avalatransa twice asked the courts to put Nozar into administration over unpaid debts, which in total exceed 4 billion euros, but both attempts were unsuccessful.

Nozar, owned by the Nozaleda family, has five days to respond to Avalatransa's filing.

A spokesman Nozar was not immediately available for comment.

If the company is put into administration, it would represent Spain's second biggest corporate default behind fellow property firm Martinsa Fadesa (MFAD.MC), which declared itself insolvent last summer with debts of 5.1 billion euros.

A judge is studying the request which has so far not been acted upon, papers from the Madrid commercial court said.

Spanish property firms and builders are forecast to go bust at a record rate this year as the global recession compounds the abrupt end of Spain's decade long housing bonanza, and because banks are unwilling to lend, to the shaken property sector in particular.

Nozar has stakes in other troubled Spanish property companies Colonial (COL.MC) and Afirma (AFRA.MC).

(Reporting by Carlos Ruano; writing by Ben Harding; editing by Elaine Hardcastle)

The notorious Spanish developer Aifos has been forced into administration proceedings by creditors, reports the Spanish daily El Pais. This is a step in Spanish commercial law that can lead to administration and bankruptcy.

Read the full article at Spanish property insight

 MADRID, Jan 21 (Reuters) - Spain, the world's second biggest tourist destination, suffered its first fall in foreign arrivals in at least 13 years in 2008, figures out on Wednesday showed.

• 74% of respondents are still looking to buy Spanish property.
• Temporary loss of spending power from the pound to the euro is the main reason why people are waiting.
• 63% of respondents are looking to property to supplement dwindling pensions over the next 10 years.

The desire for British and Irish buyers to purchase an investment property or holiday home in southern Spain is as strong as ever, despite the financial restrictions of the credit crunch. This desire is being fuelled by the need to bolster diminishing pensions.

These are just a couple of major findings from a new Spanish property survey carried out by Marbella-based property company Andalucian Dream Homes.  As one of the only big agents left on the Costa del Sol, Andalucian Dream Homes wanted to gauge how buyers are thinking and feeling about Spain and about buying Spanish property in general.

Group Marketing Director Adam Godwin explains more: “Although actual sales on the Costa del Sol are down on previous years, the numbers registering an interest in Spanish property through our website show that desire and demand is returning.

“We advertised throughout the Christmas period and saw a sharp uplift in both visitor numbers and new registrations, which clearly shows the desire to find out about Spanish property is as strong as ever. In this new-look market where interest is high and prices are low, there are other hidden factors at play so we surveyed our database to find out what they are.”

While most agents are focusing on buyers’ budgets and timescales, Andalucian Dream Homes’ goal is to uncover these hidden factors and then develop the appropriate products, services and information needed to fit the current market. The survey results are fascinating as well as extremely positive for Spanish property in the mid to long term.

Top 5 survey findings:        

Despite the credit crunch 74% of respondents are still looking to buy Spanish property.

Spain will always be one of the most popular places for those who are ready to invest in property. Its many natural lifestyle advantages such as climate and proximity to the UK ensure it will continue to be a safe and reliable choice. The Costa del Sol is also one of Europe’s favourite holiday destinations and the new airport expansion means the region is set to see in excess of 20 million visitors per year – providing a captive market for those buying to let.

63% of respondents believe property to be the best option for supplementing dwindling pensions over the next 10 years.

Taking personal responsibility for pension provision has been a major theme of the Labour Government and has caused many to look at property as a long term investment. Whilst prices inevitably rise and fall property does, over time, recover better than other investments, making it an obvious choice for those looking to enjoy a comfortable retirement whilst enjoying their investment at the same time.

Temporary loss of spending power from the pound to the euro is the main reason people are waiting to buy, with 55% saying this affected their decision.

The exchange rate has affected property sales but the situation is temporary and is likely to recover to some extent during 2009. However - in real terms - the buying power of the pound hasn’t actually changed. In many instances, the weak pound is cancelled out by lower selling prices. Those sending funds back to the UK are reducing asking prices as they can get the same amount of pounds for less. Developers are also offering major discounts on new units. (Examples available on request).  

Only 10% of respondents had any faith in investing in stocks and shares.

The volatility and vulnerability of investing in the stock market was highlighted to great effect during 2008 and has frightened away many investors for good. Property offers a far more stable investment vehicle, especially for those looking to gain in the mid to long term.

Whilst scare stories have had an influence on buyer behaviour, the exchange rate is the more important factor.

Despite what the papers say, for every one unhappy buyer in Spain there are 100 happy ones delighted with their choice. Taking simple steps - such as budgeting properly and using a reputable agent like Andalucian Dream Homes - will massively reduce any risk attached to purchasing overseas.

Other points of note in the survey were that buyers felt confused about how to recognise and choose the best locations and – in these times of big discounts and fluctuating exchange rates - how to accurately assess the real value of a Spanish property.

The response rate to the Andalucian Dream Homes survey was excellent, which demonstrates there is still massive interest in Spanish property despite the economic and market changes over the past year. However, it’s obvious those who are interested in purchasing have legitimate concerns about a range of issues.

Adam Godwin continued: “Over the coming months Andalucian Dream Homes will be continuing communication with clients and providing solutions to overcome these concerns.

“We have already begun taking action to help would-be buyers. For example, the pound to euro exchange rate is a major issue for many, so we’re in discussions with vendors to drop euro asking prices. Those looking to send funds to the UK can now afford to drop asking prices considerably, and we’re making that happen for our clients.    

“Our survey has given us excellent insight into what our clients want and need and the results will form part of our business strategy for the next two years.”

Source: Andalucian Dream Homes

 MADRID, Spain (AP) — Housing prices in Spain fell 3.2 percent in 2008 in the first such drop in 15 years, the government reported Thursday.

The figure illustrates the dramatic decline in the Spanish real estate sector, which had been the main engine behind more than a decade of solid economic growth but collapsed over the past year or two.

During the market's heyday, prices rose as much as 18.5 percent in 2003, for instance.

The last time housing prices in Spain posted a decline for an entire year was in 1993, when they slipped 0.4 percent.

The new decline represents not a collapse in the market but rather a desirable moderation because prices had been so high they did not reflect the real value of homes, Anunciacion Romero, a senior official at the Housing Ministry, told reporters.

Spain's once-buoyant economy is on the verge of recession, and its 11.3 percent unemployment rate is the European Union's highest.

The housing fall has been devastating for the economy because construction and related industries accounted for up to 20 percent of Spanish GDP.

MADRID (Reuters) - One million Britons have abandoned Spain's bars and beaches in the last year after the pound dived against the euro and the financial crisis took hold, Spain's main tourism trade body said on Wednesday.

Spain, the world's second biggest tourist destination after France, relies on tourism for around 10 percent of its GDP or some 100 billion euros a year. It welcomed 16 million Britons, or 28 percent of all foreign arrivals in 2007.

But, in 2008 the pound weakened to near-parity with the euro -- a 22.4 percent fall -- and cost-conscious Brits looked to holiday in non-single currency destinations to the east.

"Spain has lost 1 million British tourists in 2008. The British are being turned more towards Turkey or Egypt," said Sebastian Escarrer, the chairman of trade body Exceltur and also chief executive of Spain's biggest hotel group, Sol Melia.

He said for the first time he could remember, no British tour operator was operating flights to Spain's Balearic islands of Mallorca, Menorca and Ibiza this winter.

Exceltur said Spain's tourism income would fall 5.7 percent this year as the global economic crisis deepened. Spain will earn 40.5 billion euros (36.5 billion pounds) from foreign tourists this year, Escarrer told reporters, down from 42.2 billion two years earlier, according to balance of payments data.

Earnings for the first 10 months of 2008 dropped by 4.1 percent. "Bad figures registered in November and the expected figures for December look like producing a bigger fall up to the end of the year," Exceltur said.

Exceltur, whose members include Spain's main airlines, hoteliers, travel agents and car hire companies said not only was demand falling among foreigners, but also from Spaniards.

It said the number of nights spent by Spaniards in Spanish hotels will fall 5 percent this year. It added that even among the best performers, hotels' key revenue per available room (RevPar) indicator had fallen between 5 and 7 percent over 2008.

(Reporting by Robert Hetz; Writing by Ben Harding; Editing by Katie Nguyen)

It could take two and a half years for the glut of new, unsold properties in Spain to be cleared, according to the latest data.

It is estimates that there are almost a million new homes that are unsold, most on the Spanish coast, many of which were built for British property investors who have now deserted the market because of the global economic downturn.

According to the Institute of Construction Technology any property finished by developers in the next year will join Spain's inventory of unsold new homes.

Because long lead times and inertia are endemic in the Spanish construction industry the glut is just going to get bigger and the firm estimates that around 600,000 homes have been completed in 2008, despite a severe slump in property sales.

'In 2008 there has been a lot of work, almost as much as in the best years of the property boom,' said spokesman Josep Fontana.

Its report forecasts that the number of finished homes will fall to 300,000 in 2009, a 50% drop in output, before stabilising with a 2% fall in 2010. That would take residential construction levels back to where they were in 1996 and 1997, before Spain's real estate boom kicked off.

Meanwhile the latest forecast from BBVA, one of Spain's largest banks, predicts that property prices will fall by 25% by 2011. Swiss banks Credit Suisse and UBS have already forecast falls of 30% in a similar time frame.

BBVA also estimates that the inventory of new homes languishing on the market in search of a buyer stands at between 800,000 and 1.4 million, somewhat higher the Ministry of Housing's estimate of 650,000 unsold new homes.

Source: PropertyWire.com