Property Pulse Issue 291 – 21st September, 2010
September 21st, 2010
There’s an interesting article this week about the UK property market. The reason we’ve included it here is that it references the Spanish property market and concludes:
.. What’s propped up prices in Spain is the same as what saved the British property market from harder falls – interest rates being slashed.
Just as in Britain, home loans in Spain are generally variable, says Maharg-Bravo, “and interest rates are ludicrously low – sometimes less than 2%.” So people who might otherwise be forced to sell find that their home loans are cheap enough that they can sit on their property, rather than take an “unacceptable” price.
Compare that to the US, where payments on home loans were generally fixed or in many sub-prime cases, rising, and suddenly it’s easy to see why Europe’s crash has been nowhere near as severe as America’s.
I’m not sure that this is the only reason the property bubble hasn’t deflated as quickly in Spain as in other countries, but the affordability of paying the mortgage would certainly explain why some vendors are not keen to reduce their prices in line with market forces.
TINSA has a new report documenting the latest changes in Spanish house prices. As a bonus, TINSA now issue their accompanying notes in English as well as Spanish.
Their data points to house prices being down by an average of 17.9% since their peak at the end of 2007, and they are still declining – although the rate of decline is slowing.
TINSA says that house prices in Spain are now at – or close to – the bottom. All things being equal, I think we’ll see house prices bump along at this level for quite a while until the Spanish economy stages a full recovery.
The TINSA data tends to lead – be in advance of – the market because it’s based on their own property valuations.
Actual data from the ministry of housing or the national institute of statistics about completed property transactions would be called a lagging measurement of market activity.
In many ways, Kyero.com is also a leading indicator of the health of the Spanish property market. According to the number of estate agents now advertising on Kyero.com, and their renewed willingness to invest in reaching foreign buyers, we’re now back to Q4 2008 levels of market activity.
From a buyer’s perspective, overall activity on Kyero.com is up over 30% year-on-year and has increased by over 80% compared to the same period in 2008.
I’m not at all suggesting that there’s a Spanish property buying frenzy or that you “buy now” – simply that interest in Spanish property from foreign buyers is healthy.
If you’re thinking of relocating to Spain, you will probably already have come across Nick Snelling’s extensive writing on the subject. Nick is a rare author – his books are easy to read AND packed with relevant information and insight.
New this week, his latest book, The Secrets to Working and Making a Living in Spain is no exception and I highly recommend it.
Finally, I know this is a long shot – but perhaps you can help? We’re looking for a very specific language translation service.
The different language versions of Kyero.com are translated from English by professional translators – but we need to replace the software that enables them to perform these tasks.
Perhaps you or someone you know has a solution that would work for us? Basically, the less time our programmers spend developing this kind of infrastructure software, the more time we’re able to dedicate to making Kyero.com even more useful and powerful for you.
Please have a peek at our outline requirements to see if you can help.
Here’s the best of this week’s Spanish property news.
In a further sign of renewed investor confidence in Spain’s economy, the government Thursday raised four billion euros in long-term bond auctions at lower interest rates than previously.
Spain has had a horrendous recession – and yet, the market seems to have managed to take the strain.
The population of Malaga province continues to increase. However, the economic crisis has led to a change in migration and the number of foreign residents in Spain has dropped by approximately 100,000.
Spanish banks are well placed to meet the more stringent capital requirements of Basel III. Spanish banks currently fulfil the capital requirements or are perfectly able to do so in the required time frame.
Santander, the highly acquisitive Spanish bank, has continued its aggressive march into emerging markets after winning the auction for a controlling stake in one of Poland’s largest banks.