Spanish Property News Roundup 3rd November 2009
November 3rd, 2009
Making sense of Spanish property related articles in the news this week.
In Bank of Spain: Foreign Exchange Rates Key to Recovery, the Bank of Spain says that a recovering US economy bodes well for Spain’s export industry IF foreign exchange rates don’t mess things up.
Thanks to the economic might of France and Germany, the Euro has remained quite strong against the Dollar, but that strength could scupper any hopes of Spanish exports to the US – hence EU calls to limit volatility in foreign exchange markets.
In Spanish Economic Recovery Mediocre, the Spanish Savings Bank Foundation, FUNCAS, predicted that the service sector in Spain will become a dominant employer. Why?
I think it’s because there are no goods to export, few organised unions in that sector in Spain, and greater latitude in reducing tax liabilities in the client’s country. In short, it’s one of the few industries in which Spain might have a competitive edge.
In Moneycorp: GDP Data Scuppers Sterling, we see the battle waged last week between Sterling, the Euro and the USD. Finally, the surprisingly poor UK Q3 growth figures boosted the value of the Euro.
Moneycorp advise: “The events of last week were a salutary reminder that sterling can go up-and-down, as well as down-and-up. Buyers of the euro should hedge half their requirement.”
Finally, as if it were the logical conclusion to all this economic data, we read that Spanish Property Prices Flat Until 2011.
Last week, Knight Frank concluded: “Property prices in Spain have touched bottom but will remain stalled during the next two years. If you put a home on the market at a 35 percent discount to highs from three years ago, prices are going to stay at these levels until 2011.”
If you’ve been reading the Property Pulse newsletter for a while, you’ll know that’s exactly what we concluded earlier this year. For a Spanish property to sell, it needs to demonstrate a real 30% reduction from the highs of 2007. As a buyer, that’s what you are aiming for.
As the recovery in Spain lags that of the rest of Europe, I continue to predict a wave of foreign investment money flowing into Spanish property. Word on the street plus confirmation by Knight Frank that real Spanish property prices have bottomed out means that what we’re waiting for now are the investors.
The investors are no longer waiting for Spanish property prices to drop further.
True, much of the Spanish property stock continues to be marketed optimistically, but a little bit of haggling should get you well within the 30% discount zone. Just make a cheeky offer.
Martin Dell, Kyero.com
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