Some good news? The exchange rate!!

Could there be some good news at last? Have at look at the £/Euro exchange rate.  It seems that we are about to enter an upward spiral of £s to Euros.
Will it continue?  There is talk of the Bank of England reducing the base rate but what about the Euribor?  It seems likely that that will have to fall in the light of the Eurozone economies poor recent performance.
Will the present government come up trumps and make our economy stronger (or seem stronger) in relation to the rest of Europe?  Will this increase confidence in our currency?
Will this come in time for us Corverians to benefit?
Economists are great at explaining why things have happened in the economy but useless at predictions - so has anyone got any ideas about the future?

Oh s**t - when I first started this post I genuinely wanted to highlight something that at the time seemed positve and a relief as it seemed the £ was about to increase in strength. 

When I first commited to purchasing on Corvera the exchange rate was £1=1.46 its subsequent fall to 1.16 basically means that for every euro of the purchase price (plus 7% IVA), a further 18p has to be found. 

This also makes resale less of an option as half of the market comes from the UK with a large chunk of the remainder from Spain.  Looking at the IMF predicted growth figures for both of these economies makes for grim reading.

There are also implications for the completion of the resort as sales are inevitably going to suffer.

I'm also concerned as to why the replacement bank guarantees appear to be coming from several different financial institutions.

Any optimistic points would be greatly appreciated!

Caveat emptor!

 

Just remember that the "Boom" economies are the first to suffer in a downturn and usually the first to recover. France and Spain although suffering are probably 6 months or so behind our rollercoaster so as we start to climb out they will probably still be heading down . Then and only then will the £-euro balance start to change dramatically. Lets hope it's within the next 6 months for phase 1 and 2 buyers.

Sorry Steve but I dont think it will be in the next 6 months, I do agree that this will turn but I think it's not going to happen until 2010. To be honest I am thinking 2011 before the Corvera investment starts to pay off and have planned to service until then.

The reason for this is some really interesting economic studies by an "eminent professor" of economics who studied the sequence of events in boom and bust cycles other none other than Mr Greenspan himself. He predicted that the property market in Spain wuld not start to take off again untill 2011 when reducing supply comes closer to demand and other european ecnomies have been ascending for some time. I thought when I heard all this it was basically good news jst a bit further off than I would like.

Keep the faith

Regards

Sean

i am an owner on the alleged phase 4 of roda , a little clarification if possible does that mean that prices will stop falling in 2011 and stabalise ? if that is the case if you purchased off plan as we all appear to have done prices would seem to have a long way to fall not taking into account the exchange rate . if prices stabalise in 2011 how long before your property is worth what you even paid for it let alone start to see an increase in value ? all this is assuming that calidona deliver the product on time which if my experiance of roda is anything to go by this would appear increasingly unlikely . as it is at the moment people are being asked to complet on properties that will conceivably be worth 30% less in the none to distant future , whilst i am all for keeping the faith as i am a life style buyer not an investor looking for a quick profit i dont believe in looking at things through rose tinted glasses the fact of the matter is there is chronic over supply and lack of demand at current price levels and as an earlier post indicated rents are being forced down due to an over supply of property . i would dearly like to see a different picture but i fear it will be a long long time before our properties are even worth what we are contracted to pay for them let alone see any increase in value or rents even covering the outgoings  this is not intended to be a negative post towards calidona simply a realistic view of the spanish property market and rental options , i for one hope this changes but i wont hold my breath .

 

 

It really looks like the short term prospects for the £ are very bleak with the goverment calling for a further cut in the base rate and the shadow chancellor warning of a run on the pound.

I also wonder how well Spain will cope with an economic recession whilst locked into the Euro (ie without the normal beneficial exchange rate depreciation).  The Spanish economy is really going to suffer over the next year in terms of construction and tourism.

Long-term rentals to those involved in the construction of Corvera airport looks like a good option as it may bring some benefits with a weak £ (especially as holiday lets will be scarce.)