I would just like to say a big thank you to all of those customers who have helped make 2014 a record breaking year for Spanish Hot Properties which culminated with August 2014 being the companies best ever month for new agreed sales in the history of the company.
To give you an idea of the breakdown of the clients that bought in August 40% from the UK, 15% from Russian, 30% from Scandinavia and 15% from mainland Europe. The most interesting stat is that 40% was from the UK a big increase and ahead of the 15% for 2013 for Spain as a whole. Finally they realise the recession is over but in reality most of the best deals have already gone but some opportunities still exist.
As to when prices rise again it’s clear that is already happening in prime location areas such as Mallorca and Marbella. Another question asked by our clients is a very simple one; can I lose money by investing in Spanish property now? The answer to the question is only if you buy badly natural economics say if you buy below the cost of replacement value eventually prices will rise. Also this summer in Marbella it was impossible to find a Hotel in August in the Marbella area and very difficult to find a holiday rental apartment so again you can work out the rest for yourselves.
The question for all of us is when a normal buying market will return where 50% of the properties sold are not bought by international buyers. Anyway once again a big thank you to all of you who have helped 2014 be such a great year for Spanish Hot Properties
Well I suppose it will come as no surprise to you that UK Spanish property buyers still make up the largest percentage of an increasing international property buyers’ market in Spain. However on closer inspection the trend is considerably downwards with UK citizens currently missing out on huge opportunities.
Official figures published recently for 2011 show the British bought more property in Spain than any other foreign buyers. However those looking to buy Spanish property now cover a much more wide ranging area.
Of the 22,260 overseas purchases in 2011, only 18% were British. The number of foreign buyers was up from 4.45% of all property sales in 2010 to 6% in 2011.
Below is a selection by number of Spanish properties purchased in 2011 by nationality of the buyer
A close inspection of these figures makes very interesting reading. In 2008 the amount of UK buyers made up 60% of the international market with obviously the number of properties sold being much higher. Whichever way you cut it a drop from 60% to 18% is huge and a good indication why you shouldn’t rely on one particular country or sector for your business.
The issues that have affected the UK market especially is the exchange rate that from a high of 1.60€ in 2002 to a low of 1.07€ in 2008/2009 are now less of a problem with the current exchange rate as of 25 July 2012 being 127.67€ and property prices in some areas now below 2000 levels. However there is still a lack of confidence from UK buyers with the reality that other nationalities picking up the best property deals.
If one starts to look at the figures of other nationalities one can see some really interesting movements. If you add Norway, Sweden and Denmark together as one block they are the second largest block with over 12% of the overall market. Interestingly unlike the UK these buyers are increasing year on year. The same goes for the Benelux countries i.e. Holland, Belgium and Luxemburg making up some 9% of the market. Add Scandinavia and Benelux together and they are the biggest group of Spanish property buyers in 2011.
Another interesting stat is the Russian figures because in 2011 Russians became the largest single buyers in the Alicante Province. Costa Blanca having used to be the second resort for UK buyers. The other factor is these figures are by properties sold rather than the amount they were sold for so Russian buyers would figure as a higher percentage if it was based on the value of the property sales.
What this tells us and what we are very aware of at Spanish Hot properties is that the market has completely changed and an international real estate company can no longer survive on just English speaking clients alone and why we speak all the major European languages as well as Russian and most importantly have natives from those countries working within our group.
The other major fact that comes from these figures is that there was only 22260 property sales i.e. only 1855 sales per month for the whole of Spain. When you think how many international real estate companies are based in Costa del Sol, Canary Islands, Balearic Islands and Costa Blanca it’s pretty clear there isn’t a sustainable living market place for them all and at least half will have fall by the wayside or continue to struggle for a living.
If you are looking to buy Spanish property in the near future and want some advice about the market place why not visit http://www.spanishhotproperties.co.uk/ for the most up to date information or alternatively contact me directly.
So finally after lurching from one crisis to another Europe which in all reality is Germany has finally agreed to the measures that are required to bring an end to all the uncertainty of the Euro and especially Spain’s participation in it.
In reality we all know Spain was never going to leave the Euro but it was up to Germany to agree to the changes that would see individual countries being able to go to the markets and buy bonds at a similar rate to that of Germany and with the new changes this will now happen.
Even before this happens bond rates for Spain and Italy have already dropped and in Spain well below the 7% rate that commentators deemed unsustainable.
So why has Germany saved the Spanish property market? In simple terms especially for UK investors it takes away the uncertainty and the concerns that Spain would leave the Euro thus devaluing and returning to the Peseta. The reality is there has never been a better time to buy Spanish property especially UK buyers with the lowest prices since last century as well as the best exchange rate for several years. All the factors point out this is the time to buy. However you wouldn’t want to buy and suddenly see a 20% devaluation in your asset. Now that is not the case people can invest in Spanish property knowing that they will be getting the best value possible.
One word of caution for all you UK citizens is to ask yourself what the long term future is for the Euro Sterling exchange rate as right now the current rate is a big positive for those who are buying.
So hats off to Germany for finally doing what they had to do and Europe and especially Spain can now go from strength to strength
In a brilliant article by John Müller, deputy director of the El Mundo newspaper, he criticizes how Ireland has managed to isolate the problem of falling property prices after its own bubble popped while Spain continues to maintain prices artificially high due to action, he says, by the banks.
John Müller says that Ireland has recovered from the economic crisis in part because of the way it tackled the real estate issue. The country also experienced a “large bubble” as property prices quadrupled between 1997 and 2007. The writer explains that prices in Ireland are falling fast (down 12.5% in the first six months of the year and down 57% from their peak in some parts of Dublin), while the same is happening in Spain in slow motion. He points out that property prices have dropped 22% since their peak according to the Bank of Spain (Banco de España) and only 16% according to the Ministry of Public Works (Ministerio de Fomento).
The leader from El Mundo says that the key in Ireland was “enabling offer and demand to operate almost without interference”. He recalls how the Irish banking sector was rescued by the State and how a “bad bank” was also created in which to put real estate assets on ice so that once the losses had been assumed, the property prices would not affect the results of the banking sector.
John Müller accuses the Spanish banking system of “artificially blocking” a fall in prices and the Government of turning a blind eye to something it is fully aware is taking place.
He is of course 100% correct but the Spanish banks with a history of trying to artificially help keep losses to a minimum and actually creating distorted accounting will have to be dragged kicking and screaming to accept Ireland’s medicine.
The formation of the banks own real estate companies to help dispose of their assets was another disaster. Also the bank’s reluctance to deal with the international agent market place is inherently stupid. It’s only now some banks are seeing the errors of their ways but still but obstacles in the way of the companies and people who could help them sell their real estate.
If the 2012 Euro crisis continues then the banks in Spain are going to have to change their attitude big style or this housing crisis will continue for years.