Spain Real Estate News

Residential property prices in Spain fell nationally by 5.5% over the 12 months to the end of February, according to the latest real estate price index to be published.

There is a degree of stabilisation, with the index remaining the same as the previous month, said appraisal company Tinsa. But the headline figures hid the fact that in some markets prices are still falling considerably.
 
A closer examination of the Tinsa figures, which are based on valuations not sales, shows a different story for real estate on the Mediterranean coast and the Balearic Islands. Having improved for four consecutive months since September last year, prices on the coast decreased by 8.2% over the 12 months to the end of February, and by 8.9% in the Canaries and the Balearics.
 
So since the peak of the market in December 2007 prices are down 15.7% nationally, 22% on the Mediterranean coast, and 16.8% in the Canaries and the Balearics, based on Tinsa figures.
 
But the latest figures from the National Institute of Statistics, which are based on actual sales figures supplied by lawyers, show that property prices fell by an average of 4.3% last year and by just 10% since the peak, seemingly backing up the trends identified by Tinsa.
 
They also show that resale property prices fell 3.5% last year and actually rose by 0.1% on a quarterly basis in the last three months of the year.
 
The Spanish government claims there are signs of recovery. The latest figures from the Ministry of Housing shows there was a small rise in property sales in the fourth quarter of 2009.
 
‘The transactions in the fourth quarter represent a rise of 4.1% with respect to the same period last year, this being the first year-on-year rise since the fourth quarter of 2006,’ it said in a statement.
 
But like the Tinsa figures, when the data is put into a wider context the picture is not quite as rosy. The government figures show that there were 413,112 transactions last year, a fall of 19% compared to the previous year, and 46% down on 2007. Even the fourth quarter sales were down 33% compared to the same period two years ago.
 
And some areas are performing better than others with Madrid and Barcelona seeing sales rise faster than more rural areas. In the fourth quarter of 2009 Madrid saw transactions go up by 41% and Barcelona by 35%.

Source:  PropertyWire

Yesterday in the European parliament’s Petitions Committee, a Spanish government spokesman attracted widespread condemnation for Spain’s failure, over many years, to act on extensive property scams, affecting British and other buyers of Spanish holiday and retirement homes.

In the meeting, Alicia Paz, Director General for Sustainability of Coastal Regions, asserted that the Spanish Coastal Law, implicated in many of the forced expropriations of seaside property, was intended to preserve Spain’s fragile coastal environment. But she failed to explain how such a law could be applied retrospectively, how it could be used to deny basic property rights to Spanish and foreign investors who had bought property on the basis of binding contracts and land registration, and why the expropriations seemed to apply to private householders, but not to hotels and major developments.

Over the years I have received dozens of complaints from constituents or former constituents, many telling tragic stories of elderly couples who had spent their life savings on a dream retirement home on the Costas, and lived there happily for months or years, only to wake up one morning to find an eviction notice on the doormat, and bulldozers at the gate. Some have seen their dreams, their homes, and their life savings literally reduced to rubble before their eyes.

In addition to the Coastal Law, which has seen thousands of properties taken into public ownership without proper compensation (at best owners are offered a temporary lease on the properties they previously owned), the region of Valencia has seen extensive expropriations based on local planning laws. There are widespread and credible reports of collusion between developers and corrupt local politicians. In some cases, to add insult to injury, owners are presented with bills for tens of thousands of Euros for the provision of utilities to the very land they’ve had taken away.

Yesterday, in the debate, I pointed out that countries wishing to join the EU had to demonstrate that they had a functioning market economy, which required the rule of law, rights of property, and  enforceability of contracts. Spain was failing to meet these criteria. If Spain were now applying to join the EU, it could be excluded on those grounds. I am also disappointed by the attitude of the European Commission, which claims it is unable to take any action under EU law, despite Article 17 of the much-vaunted “Charter of Fundamental Rights”, which states that a citizen “Has the right to own, use, dispose of and bequeath his lawfully acquired possessions” . The Charter came in with the Lisbon Treaty.

Over many years I have been frustrated that there is so little I can do to help victims of these scams. Now at least during the Spanish EU Presidency we are building up the pressure on Spain, and on the EU Commission, to take decisive action. In the past, Spanish MEPs have tended to support the status quo, but I was struck yesterday that all but one of the Spanish MEPs who spoke demanded action to resolve the problems.

Source:  Roger Helmer MEP

The Spanish property market is in too much of a mess for a real BMV market to exist, according to agents specialising in distressed property in the country.

Struggling developers, desperate homeowners and banks stocked with repossessions are all setting their prices according to how badly they want to sell, meaning a benchmark price is virtually impossible in many of the tourist hotspots. And without a standard to measure against, agents are left to secure whatever price they can for each situation.

“Something is worth what someone else is prepared to pay for it and that’s that,” says Inez Rix, owner of Direct Auctions. “You have an open market price (not value), a bank valuation (upon which they base their lending), the offer price and the declared price at notary! No wonder there is no benchmarking for Spanish property.”

The problem is so severe that one unit might be on sale for 50% less than the identical unit next door, says Darren Carter, owner of distressed agent Goldberg & Partners. “It all depends on the seller, the buyer and even the weather or what week it is as to what price will be agreed. A developer or bank might have sold three units at one price last week and not want to sell at the same price this week.”

The ability to sell at a below market value is also hampered by the banks’ mortgage regulations. In Portugal, developers are offering units with 100% LTV mortgages by fixing prices at 80% of the lending bank’s valuation, effectively removing the need for a deposit.

“In Spain this isn’t legal as the Bank of Spain ensures their normal lending criteria is adhered to,” says Rix. “In order to achieve a percentage of borrowing against the higher bank valuation, one now has to obtain a doctored purchase contract.”

Carter says there are now better finance deals for buying bank product in Spain, “even 90 or 100% LTV on the price of the property but not including closing costs”, but the mortgage market has become too dynamic. “It feels like banks will offer one LTV one week and a different one next week once they’ve got their quota for the month.”

Story from OPP.

It seems that property where violent deaths have occured fail to sell, even at rock bottom prices.  Not surprisingly really!

Read the story at Typically Spanish

Hundreds of furious expats have staged a march in Malaga today over Spanish government plans to demolish illegally built holiday homes in Andalucia.

The protest group took part in a rally in the southern city carrying placards in Spanish and English which read 'we've done nothing wrong' and 'citizens betrayed'.

Demolition orders have been served on a score of houses across southern Andalucia and the regional authority passed a law yesterday which means illegal properties can be bulldozed with just one month's notice.

The authority, which has semi-autonomous powers, is determined to rescind planning permission granted illegally by formerly corrupt councils.

Maura Hillen, president of the pressure group AUAN, said: 'In the wrong hands, this legislation would be like putting machine guns in the hands of babies.'

A conservative estimate states there could be as many as 100,000 illegally built properties across Andalucia, many of which are owned by British expats.

The owners, the majority of whom are pensioners, were either duped into buying homes by unscrupulous private sellers who had had their planning permission revoked or were granted permission incorrectly by councils.

Many of those served with demolition orders have developed serious health problems as a result of the stress of possibly losing their homes.

Helen Prior, 64, whose £350,000 villa in Almeria was bulldozed more than two years ago, took part in the march without her husband Len, also 64.

She said: 'The stress of this for two and a half years is unbelievable. It's exacerbated Len's heart trouble.'

The couple, who are due to receive compensation after a Spanish supreme court ruling, are still living in their garage - the only part of their house, called Tranquility, which wasn't razed to the ground.

Marta Andreasen, UKIP MEP, criticised a visit by Minister for Europe Chris Bryant to the region earlier this month.

She said: 'I don't think he achieved very much. I don't think his visit was very sincere.

'He's not doing anything to resolve the problems of the people who are already suffering.'

Many of the pensioners in the protest group, known as the Albox Eight, have suffered health problems after being served with demolition orders.

Terry Haycock, in his sixties, has suffered from partial blindness and facial paralysis; Muriel Burns, 70, has stress-related respiratory problems and her husband John Burns, 82, has developed a hernia. All three were unable to attend the rally.

There are fears among the expat community that the new laws could lead to more homes being demolished.

Phil Smalley, president of SOHA which organised the march, said his legally obtained planning permission had been annulled in the courts last month.

At a meeting with Ana María Moniz Sánchez, director general for the inspection of housing in Andalucia, he says he was told all illegal properties would be legalised or 'returned to dust'.

SOHA is campaigning for compensation for those whose homes are demolished.

Source:  Daily Mail

Very interesting post by Mark Stucklin of Spanish Property Insight on his blog about some positive news for a change regarding the Spanish property market.

The Spanish property bust is dead, long live the recovery

Maybe we were right all along...

Two former Premier League stars have joined the growing list of footballers considering multi-million pound legal action over their investments in a Spanish property development.

Jason Wilcox, who won the title with Blackburn Rovers, and Brian Deane, of Sheffield United and Leeds, are consulting Manchester law firm Hammonds on their next move against the wealth management arm of the Formation organisation over their recommendation to buy properties in the Monte Resina complex outside Marbella.

Manchester United's Wayne Rooney and Derby's Robbie Savage are also in talks with lawyers concerning allegations of vested interests in the advice given over their investments in the same development where the quartet all bought similar luxury apartments.

Savage is understood to have spent £50,000 on legal action and is prepared to risk losing over £300,000 if the upcoming court case goes against him.

England captain Rio Ferdinand also has a Monte Resina residence in his property portfolio but is not known to be joining his fellow footballers in their complaint process.

Formation, who claim the demise of the Spanish property market is responsible for the investments not proving successful, say they will vigorously defend any claim against them.

Source:  Daily Mail

Chris Bryant, Minister for Europe, said that the country was undermining efforts to create a recovery in its beleaguered housing market.

He was speaking yesterday during a visit to south-eastern Spain to meet British expatriates who have been told that their homes will be bulldozed after Spanish authorities declared their construction illegal.

The authorities there have been waging a campaign against former officials accused of allowing overdevelopment of coastal regions. Local governments issued building licences for the properties, but these were later nullified following court action instigated by a higher regional government.

Mr Bryant cautioned: “The housing market in Spain is not going to recover quickly if pictures of bulldozers knocking down expats’ homes are appearing in British newspapers.

“Everyone I’ve spoken to in Spain says they want to find a solution but wanting a solution and getting one are two different things.”

He said: “Obviously it’s not for the British Government to tell the Spanish what to do. But I’m pushing the message hard at all government levels that I meet here that they have got to put political willpower into these problems, whether it’s an amnesty, whether it’s a change in the law, whatever the solution is that is needed. That is the point I am pushing.

“I have to say also that there is an enormous difference between the Britons who just make a cursory legal deal – that is always ill advised – and those who have done everything they should or could have done but still find themselves in deep trouble.”

Mr Bryant spent the weekend advising expatriates in Andalucia on issues ranging from property rights to health care. He visited Torrevieja, the fastest-growing town on the Costa Blanca, Malaga, the capital of the Costa del Sol, and the town of Albox, where eight British families are fighting demolition orders issued at the end of last year.

John and Muriel Burns were among the first to receive the demolition orders in Albox. The pensioners emigrated to Spain in 2001. “They did everything to dot the 'I’s and cross the 'T’s that they possibly could have to obtain the permission they required” to build their dream house, Mr Bryant said.

“But it turns out that the permission should not have been given. That was no fault of theirs whatsoever – but now they face the prospect of having their home demolished.”

After hearing that his home would be bulldozed, Mr Burns declared that he and his wife would chain themselves to the house.

“If this building comes down, then we will be underneath it,” he said.

Mr Bryant said he was able to tell worried Britons that the Andalusian regional government was appointing a full-time official to deal with the concerns of British expatriates. The official will provide advice on property regulations, health care and residence requirements. Mr Bryant warned: “People buying property anywhere abroad, not just in Spain, have to take at least twice as much trouble as they do at home to make sure everything is legal. It is so easy to go to a lawyer because he’s cheaper.

“Then later you find out that he wasn’t an independent lawyer at all, but was working all the time on behalf of the land developer and you are really stuffed.”

Source:  Telegraph.co.uk

A glut of new properties in Spain shows that the real estate industry is unlikely to recover quickly as over supply still clogs the market.
The most recent figures from The Ministry of Development show that 387,000 new homes were finished last year despite a property market crash already into its second year. This compare with 220,600 new home sales recorded by the National Institute of Statistics for 2009.
 
‘This means there is an oversupply of around 166,500 new homes that joined the glut of new homes already languishing on the market in search of a buyer. It illustrates the severity of Spain’s construction boom and bust,’ said Mark Stucklin of Spanish Property Insight.
 
‘What is worse, there is no quick solution as much of the trouble is stored up in a new homes glut that will take years for the market to digest,’ he added.
 
When the figures are added together it means the market is now facing a glut of 1.2 million new homes. The Spanish developers’ association and the Ministry of Housing are more optimistic in their figures and estimate there is somewhere between 700,000 and 750,000 new homes on the market but even at that level it will take years for the market to absorb the over supply.
 
Stucklin says the industry has consistently built too many properties over many year and ignored falling demand. ‘Last year, there were around 225,500 new households formed in Spain, down from 300,000 plus per annum in the boom years. New household formation surged as immigrants flooded into the country and changing demographics and life-style choice, for example and increasing divorce rate, pushed up the demand for housing. But even at the boom level of 300,000 new households a year, it is now clear that Spain was building way too many new homes,’ he explained.
 
‘In 2006, for example, there were 865,500 planning approvals, though not all of them went on to become housing starts. And in 2007 there were a record 641,500 housing completions. Now even if you assume that demand for second homes was a generous 200,000 per year, Spain was still building something like 200,000 or more excess homes per year. Now they are idling on the market, tying up capital, and dragging down the Spanish economy’s productive potential,’ he added.
 
Although supply now seems to be adjusting to demand there is still a huge glut in the market.  But this doesn’t help the economy as a collapse in new building is just as bad for the economy as too much building, Stucklin reckons.

Source:  PropertyWire.com

AUAN Press Release:

Malaga Wednesday 17th March 2010

There is an EU Conference in Malaga taking place 17th & 18th March. SOHA & various other groups are organising a peaceful protest march on 17th March starting at 12 noon and expected to finish at 2pm following speeches by various people. The route is approximately 1km through a pedestrianised area.

GUEST SPEAKER WILL BE MARTA ANDREASEN MEP

We need as many people as possible to attend as the more we have the more they will understand that we are NOT giving up on this one!!

There are many people working on this in the background and everyone should know that WE are campaigning for everyone affected by this unjust and immoral situation

Our voices HAVE to be heard, not only in the EU Parliament, but in every Town Hall here in Spain!!

We the AUAN are arranging coaches as we did recently to Almeria. If you wish to reserve a seat, call in at one of the locations listed below on the day & time stated to reserve & pay for your seat, alternatively contact us at info@almanazora-au.org

ALL ARE WELCOME THIS IS NOT JUST OPEN TO AUAN MEMBERS

Bookings as follows:-

Albox – Bar La Parilla (Plaza Mayor)

Tuesday 2nd & 9th March    11.00 - 13.00

Arboleas – Maloans Bar

Saturday 27th February       11.00 - 13.00
Saturday 6th March              11.00 - 13.00
Cantoria Library

Tuesdays & Thursdays           11.30 - 12.30

Cost – ONLY €15 per person     

All seats must be paid for prior to 16th March – No payment will be taken on the day.

Coaches will depart as follows:-

Arboleas – Maloans Bar               7.00am

Albox – Fuente                               7.00am

Meroil Petrol Station (Partaloa) 7.15am

Coaches will leave Malaga approximately 4.30pm allowing for lunch or shopping after the end of the march.

Anyone wishing to make a donation to the fighting fund, join the association or renew their membership are welcome to do so at the above location and times.