The Latest Spanish Property News from Kyero.com

Setting up home in Spain means wading through the usual bureaucracy and form-filling. It’s at this time that you’re most vulnerable to identity fraud - when you’re providing personal and financial details to utility companies, local government and banks.

Identity fraud is on the increase. It is one of the fastest growing crimes and customers of banks worldwide are vulnerable to identity fraud particularly if they have internet access to their accounts.

Phishing fraud is also rising fast. It is mainly executed through the internet by criminals attempting to steal your identity and cash by conning you into divulging your bank account numbers, passwords, credit card and PIN numbers.

Phishing normally takes the form of an unsolicited email being sent to your email address leading you to a spoof website representing your bank and asking you to reveal bank and identity details, usually on the pretext of updating the bank’s security arrangements.

Banks are vigilant in avoiding online fraud but you can help by adhering to some basic rules:

• Do not reveal your bank account password to anyone or write it down where it can be seen by other people.

• Do not reveal your credit card CHIP and PIN numbers to anyone other than in a legitimate transaction.

• If you receive an email, telephone call or letter purporting to be from your bank but you are not sure, contact the bank for verification.

• Check your bank and credit card statements immediately for any transaction you did not make. From 1st April new rules for reporting card, cheque and online banking fraud means that if you suspect any criminal activity you need to first report it to your bank or the financial institution concerned. It is then up to the bank to pass details to the police.

• Do not let anyone see you enter you PIN when using cash machines.

• Shred your financial documents like utility bills, bank and credit card statements before throwing them away.

• If you move house set up a mail forwarding system for at least twelve months and notify all relevant organisations of your change of address.

• If you do not receive your bank statements through the post report this to the organisation concerned. Criminals can change your address with your bank or re-direct your post to another address to gain access to your personal details.

• If you lose any personal documents or have them stolen report the matter to the organisation concerned immediately.

In today’s world devious fraudsters will use various tactics and the most mundane of documents to steal your identity. Following the above rules will significantly reduce the chances of you becoming a victim.

Story from BlevinsFranks

Retirement is a key time in life to review your financial arrangements. This is particularly true if you have moved to Spain as investments you had working well for you in the UK when you were in employment may not be suitable for retirement in Spain.

A retiree’s mind usually concentrates more on maintaining their hard earned wealth and considering how best to distribute their estate when the time comes. You have worked a lifetime earning your living, saving, and obtaining the best possible for you and your family and now is the time to reap the rewards. Do not let the financial fruits of your working life diminish through neglect or bad financial planning.

No doubt you will have worked out a budget for your retirement in Spain like day to day costs and maintaining your property, but you will also need money to enjoy your rest years by pursuing favourite pastimes, developing an active social life, taking holidays abroad, keeping a nest egg for emergencies and providing for your children and grandchildren.

Most retirees will have regular income in the form of a state pension and some will also have a private or occupational pension. Some will have taken out astute investment plans which they may need to move into other tax efficient vehicles that are more beneficial to Spanish residents.

Many retired British expatriates will have sold a UK property and made a substantial profit from it leaving a balance that can be invested and do the job of earning money as well as preserving it.

It is a mistake to believe that it is good enough to leave your money on deposit in the bank, even if it is a high interest account. Inflation, not to mention tax, will attack your capital and interest earnings and over the years your savings will be worth less in real terms than the original deposit. Inflation is a major threat to wealth preservation and in the future the capital in a bank deposit account will buy you less than it does today. The Euro in your pocket will not go as far and your lifestyle and financial security will suffer.

Long term financial security is of prime importance. People normally live twenty or thirty years in retirement and you need to plan wisely to ensure that your wealth outlives you. The last thing retired expatriates want is to run out of finance in their later years, and at the rate the cost of living is rising nowadays, this is a strong possibility if you do not protect your savings from inflation.

One way to maintain wealth is to avoid paying tax although this must be done legally. Tax rules are forever changing and a professional adviser will be able to guide you into the right investment vehicles for your particular situation, legitimately saving you presenting a large portion of your wealth to the taxman while at the same time as producing an income without your capital diminishing. When planning ahead you should determine what your financial goals are, how much risk you are prepared to take and how to bequeath your wealth and who your beneficiaries are to be. Inheritance tax planning is an integral part of the strategy you take and ensuring that your wealth is passed onto the people of your choice with as little tax levy as possible.

One way to achieve effective wealth protection is with the right selection of investment assets placed in a tax efficient insurance bond or ‘wrapper’. An insurance bond, often known as a Personal Portfolio Bond (PPB), is a specialised form of life assurance arrangement in which investors can hold their choice of assets. In Spain a PPB attracts very favourable tax treatment. A PPB can shelter your investment from tax on income and capital gains and can roll up tax free and only withdrawals are taxed. If a PPB is placed in an offshore discretionary trust it can screen your wealth from inheritance tax.

Almost any type of asset can be held in a PPB but usually people opt to include a selection of equities, bonds, property funds, capital guaranteed investments and cash. Each has a slightly different part to play and including a mixture across the range will minimise risk, mitigate tax and provide a steady income as well as capital growth to combat inflation.

In essence: · Equities usually carry a higher risk but also higher returns. The best choice is an equity fund holding a wide cross section of stocks where risk can be lowered. Over the longer term equities provide good capital growth. · Bonds are steadier than equities and can generate a regular income which makes them popular with retirees. Bond funds are again a good choice as they contain a diversified selection of bonds, spreading the risk and returns as well as providing capital growth. · Property funds will be a hot asset favourite in 2007 with the introduction of UK Real Estate Investment Trusts (REITs). Property funds are an ideal asset allocation in a portfolio alongside bonds and equities as they have a low correlation with both. Funds like REITs enable you to invest in worldwide high quality income earning property which offers good protection from inflation. · 100% capital guaranteed investments give you the opportunity to invest in equities with the guarantee of never losing your initial capital investment unless you make withdrawals. This offers the prospect for healthy returns while at the same time peace of mind that you won’t lose your savings. Protecting your wealth in retirement is a key factor in living the lifestyle you dreamed of in Spain. Reviewing your financial arrangements will help to make sure that you do.

Story from tenerifenews.com

Thanks to the dismal British weather many of the thousands of holidaymakers heading abroad this summer are likely to end up dreaming of their own permanent spot in the sun.

But prospective purchasers are urged to apply the same checks to buying property abroad as they would at home, and not get carried away with the romance of owning a home abroad.

Currency exchange firm Moneycorp, which specialises in changing funds for those buying property abroad, says it is vital buyers find out about local laws or taxes that would affect them.

It says buyers should take legal advice from a bilingual solicitor, preferably have a British solicitor check documents too and pay particular attention to permission for building work and contracts.

John Mullens, of Moneycorp, said: ‘Buyers need to be thinking about mortgage availability and whether they are going to be able to finance a purchase.’

Currency exchange firms such as Moneycorp, Currencies Direct, and World First allow buyers to forward purchase funds to set their buying costs and also provide advice on overseas markets.

One of the main reasons why potential buyers encounter problems with overseas home purchases is a lack of research and the temptation to follow the easy route of trusting legal advice supplied by estate agents or developers.

Those thinking of buying a home abroad are advised to fully investigate the legal and planning situations in the local area, with tourist offices, councils, the internet and books a good source of information.

One example of a seemingly highly attractive buying opportunity that needs very careful research is Croatia.

The country manages to combine sunshine, glamour and relatively cheap property without the brashness of much of the Mediterranean’s more developed areas, however there can be problems with land title.

Croatia has lacked effective property registration system over the years, with homes bought and sold without registration, land confiscated during the communist years and rural properties inherited by multiple owners but registered solely.

This means that while many purchases are safe, holidaymakers who get swept up in the moment and fail to check for serious risks could in future find themselves at the heart of a legal battle over ownership.

Story from thisismoney.co.uk

Spain’s reliance on construction as an engine of growth poses a “major risk” to the country’s economic prospects as higher interest rates threaten to end a property-market boom, Standard & Poor’s said.

“We consider this red-hot and unbalanced construction sector to be a major risk to the economy as a whole,” said Jean-Michel Six, London-based chief European economist at the credit-rating and research company, in a report published today.

Seven rate increases by the European Central Bank since the end of 2005 and the prospect of further moves in the future are curbing house-price inflation in Spain, which slowed below 10 percent in the fourth quarter for the first time since 1999.

Property agents in Spain are likely to cut vacation home prices by as much as 10 percent this year, says RR de Acuna & Associates in Madrid, which values real estate for about 40 percent of mortgages. Spanish household debt rose to 118 percent of income from 50 percent a decade ago as house prices tripled.

That leaves homeowners “very exposed to a market downturn,” according to S&P. The ECB last month increased its main rate to 3.75 percent and banks including Unicredit Market & Investment Banking and ABN Amro Holding NV expect the benchmark to exceed 4 percent this year.

For Europe’s housing market as a whole, S&P said it’s optimistic property owners will avoid a slump as severe as the collapse in the U.S. subprime market. While house prices in Germany, Europe’s largest economy, have stagnated over the past decade, values have surged in France, Spain, the Netherlands and Ireland.

“The potentially corrosive effects of higher interest rates are being counterbalanced by strong economic prospects and a highly competitive financial industry,” said Six, who wrote today’s report with credit analyst Andrew South. “Europe’s housing markets will largely avoid a hard landing.”

Recent reports have sent mixed signals about the health of Europe’s housing market. Irish property values stagnated for the first time in more than four years in February and French housing starts plunged 15.1 percent in the three months through February, the steepest drop since January 2001.

U.K. house-price inflation, which accelerated to the fastest pace in almost four years in March, may slow later this year, according to S&P. The Bank of England has raised its main rate three times since August, taking it to 5.25 percent.

“As first-time buyers find it harder to enter the market, we would expect house-price growth and mortgage lending to decelerate more markedly from the second half,” according to S&P.

In the U.S., a meltdown in the subprime mortgage market for loans to borrowers with poor credit histories has heightened concern the housing slowdown will spill over to the broader economy. More than 30 lenders have halted operations, gone bankrupt or sought buyers in the past 12 months as defaults on subprime loans surged.

Story from Bloomberg.com

Murcia is touted as one of the most upcoming regions in Spain, and property prices here are almost 50% cheaper per sq. m. than anywhere else in the region. Investors are beginning to see the potential of Murcia as an investment destination as millions are being pumped in infrastructure development.

Spain has been one of the top tourist destinations in Europe for many years. Many people have bought holiday homes in the sun; however, demand has now pushed prices in many areas of Spain sky high. Sure, the recent press on the market crash in Spain has also put a dampener on the average investor. But a little known fact is the market has only gone through a downturn in the Costa del Sol leaving the rest of Spain still ripe for investment.

In a recent Daily Mail article, Murcia was being touted as the newest hotspot in south-east Spain. Located between Alicante and Aguilas, this region has been slow to jump on to the tourism bandwagon. But it is making up for lost time. Anyone who has flicked through the Real Estate TV channel in recent times will have undoubtedly come across the “Next Big Thing” - Murcia. With 180 miles of coastline, unspoilt villages, and one of the balmest climates in Spain, any investment in Murcia today will reap excellent rewards in the next 18-24 months.

What makes Murcia an excellent investment today?

• High speed rail link from Murcia to Madrid

• New international airport which will be fully operational by December 2008

• 3 new motorway links already underway

• 180 miles of stunning Mediterranean coastline

• Already established resorts like La Manga commanding very high premiums on rentals and resales

• Large developers like Polaris World are pumping millions into various development schemes

In general, Spain has reported a significant rise in prices (around 28%) in the previous two years and, if you invest in the right property in the right location, you can still be assured of a healthy return on your investment. There have been some adverse comments in the media recently, regarding falling property prices in Spain. This is certainly true in some areas particularly Costa del Sol and parts of Southern Costa Blanca. The effect of over-build at highly inflated prices in these regions has resulted in the necessary price realignment. However, Murcia has remained untouched by these fears and is ready and waiting to be the next big thing.

There are various projects and resorts being developed in Murcia, especially targeting the tourist market. Certain properties on offer are at least 50% cheaper than what you can buy in the UK and significantly below prices compared to the Spanish regions mentioned above. One such investment is the Murcia Golf and Country Club. In its very early stages of development, this project allows for tremendous capital growth on the 6 million sq. m. site which will have low rise apartments, townhouses and villas surrounded by two 18 – hole golf courses with surrounding lakes.

There will also be 200,000 sq. m. of commercial centres, with numerous shops, restaurants, a 5 star hotel, and complete sporting facilities on site, including, communal swimming pools, making for all year round holidays and rentals.

Investors Provident are currently offering a mixture of apartments and villas on this project for prices considerably cheaper that the developer are offering on the open-market. Prices start from €89,950 for 840sq.ft. two bed apartments with instant equity of €10,000 on the open-market prices. When compared to properties in Bulgaria, prices here are even cheaper - less than €1,200 per square meter. Similar properties in the neighbouring Polaris World resorts are selling for over €3,000 per sq.m., making this project a steal!

Story from huliq.com

We’ve all seen them; television documentaries showing hapless couples tottering around ruins. Then the invariably well-bosomed presenter assures them that within months a miraculous conversion will give them accommodation fit for Posh and Becks - and all for peanuts.

Buying a property abroad has made sense for hundreds of thousands of families over the past decades, and for most, the romance far outweighs the heartaches portrayed on our screens. I bought my current hovel, at Castelnaudary near Toulouse a decade ago, but I’ve been acquiring and restoring places in France, Spain and England for years, and I’m now bowing out.

My medieval cottage has now been uprated from hovel to bijou hideaway (in case the pension fails). So, before my memory fails again, I’ve jotted down the rules of engagement that worked well for me and should ensure your holiday or permanent home abroad is ‘fit for purpose’.

Rule one: Have faith in your judgment. Don’t be swayed by agents, architects, or friends. If you think the place is too good to be true - then probably it is. If you are worried the light coming through the roof tiles will let in water, be worried - because it will. If the trees in the area all face east and are bent at right-angles, believe what your brain is telling you: the area is gale-swept (as you suspect) and the trees were not planted by an anarchic landscape artist (as the locals assure you).

Rule two: Set your budget before you visit and stick to it. Abroad is a big place, and it’s not going anywhere. Your homework and visits will soon provide you with a guide to what’s available, where, and for how much. Stick to your guns, and budget, and don’t be pressured to purchase until the right property falls into your sights. Then, and only then, do you need to take action.

Rule three: Have your finance lined up in advance. If you are borrowing, make sure the loan is in the same currency as your earnings - and that repayments are not dependent upon future rentals. Such income is fairy income and best left to the imagination.

Rule four: When you find a bargain, snap it up. In most countries, your initial contract and deposit is binding on both parties. If you dither each time you spot a pretty boy or girl, you’ll end up a wallflower, or maybe a weed.

Rule five: View all options about taking things down, ripping things out, enlarging this or blocking up that, with caution. Are you made of money? Rush judgments, post-purchase, should be avoided until you have had time to appreciate why the existing structure is in its present form. Once you come to know the place and have studied estimates for all the ripping and blocking you may well seek creative solutions that will cost less and do both you and the house justice.

Rule six: Be wary of architects. They all have an artistic bent and often an ego to go with it. They also tend to reward themselves according to the depth of your pocket. If you want a house that suits your requirements - plan it yourself. If you don’t, you’ll end up with someone else’s idea of what might be right which is both daft and an impertinence. It really isn’t that difficult - and your builder will thank you for it.

Rule seven: Cultivate a local builder, check that he’s well thought of locally, and give him at least one project to complete, even if it’s only replacing the gutters. Nothing irritates the natives more than a stranger arriving who bypasses the local traders. Your neighbours will know who to employ - and who to avoid; the sooner you have their knowledge on your side the better.

Rule eight: If you think you can supervise building work from a distance - double all budgets. Builders the world over take on more work than they can handle and turn up daily on those sites that makes the most strident appeal for their time. The moment you leave the area, so will they. In their heart they may intend to complete your work by a set date, but deadlines are missed more often than met. At the very least appoint a friend or local to visit the site every day to report progress. Personally, I would be present when work is promised. This is not as great a commitment as you imagine. Once work is under way projects seldom take that long to complete.

Rule nine: You know best. When anyone tells you something you want is not possible or not done, stick to your guns. One in a hundred requests may be impossible, but until a bureaucrat visits to point out why show them who’s boss. Usually, the people who insist on doing it ‘The Correct Way’ are simply anxious to take a route that suits their purpose as opposed to yours. The moment a contractor wins one of these scuffles you will be marked down for further mind battles.

Rule ten: This is tricky, but worth every penny if you can get away with it. Buy as many of the items and material for the property as you can, in person. Establish an account with each supplier and you’ll get a discount for immediate settlement. Everything that your builder supplies will appear on an invoice at a minimum of 100% of its value. Sad to say, not only will some items never reach the house, but others will be charged at prices the builder will feel he can get away with.

My final piece of advice: don’t just talk about it - get on with it. Buy that place, do your own thing, and advance the day when that first G&T is served on the sun terrace.

Story from telegraph.co.uk

Prices have soared in Spain’s third city as it prepares to host the world’s most prestigious yacht race.

Mention Spanish cities, and most people think Barcelona or Madrid. But Valencia, Spain’s third-largest city, is becoming increasingly popular with British visitors, who come to shop in its designer shops, stroll around the historic quarter and visit the architecturally stunning Ciudad de las Artes y las Ciencias complex (City of Arts and Sciences). And with the old port and beach area being comprehensively spruced up ahead of next summer’s America’s Cup, the holiday-home market is booming.

Property prices were already on a roll before Valencia was selected in November 2003 as the host city for the extended regatta, ending the year 18% up on 2002. They leapt by 30% in 2004, and many flats near the location of the new marina doubled in price.

Prices are still rising, albeit at a slower rate; last year saw a 15% increase, with prices up about 10% in the first three-quarters of this year.

Yet the city still offers good value for money: you typically pay €1,900 (£1,275) per square metre, compared with £2,345 in Barcelona, £1,540 in Palma and £1,475 in Malaga.

“Property in Valencia is not overpriced compared to other Spanish cities,” says Mark Stucklin, the Sunday Times columnist who also runs the Spanish Property Insight consultancy. “Most of the America’s Cup premium was wrung out of the market in 2004, but it could still bring in a lot of wealth over coming years - property in Valencia city could be one of the best investments in Spain.”

Local and central government investment in the world’s most famous yachting event is estimated at £270m. But while the cup has been the catalyst, the cash injection will benefit the city long after the yachts have sailed away.

The impetus of the cup has hastened the expansion of the metro - which has four lines, serves the city centre well and is currently extending further out into the provinces - to the airport, which is getting a much-needed second runway. New hotels are springing up and a five-lane, one-way road system links the port to the city centre, replacing the previous traffic-clogged artery.

Story from timesonline.co.uk

A new computer programme will allow the tax authorities to know instantly about the sale of a house, and whether the declared price is fictitious.

Big Brother is lending a helping hand to the tax inspector. In the near future, the tax authorities will know immediately of the sale of any house anywhere in Spain. A new computer programme has been developed, whose function is to link the computers of the Tax Agency with those of public notaries and property registry offices throughout the country, and it will be operative later this year. The new technology will also help the authorities to discover if the the declared sale price of a property is its real value, based on average property prices in different areas.

The aim of the new programme is to help in the fight against tax fraud in relation to the purchase and sale of property, which, according to some experts, accounts for a fifth of the entire underground economy of this country. Other measures are also being introduced, including an increase in the number of personnel working in this area: 40 per cent of the entire taxation work force, between inspectors, assistant inspectors and others will be directly involved in the property tax area this year, amounting to a work force of 2,000, which is 500 more than last year. In 2006, a total of 46,402 inspections were carried out among 6,516 taxpayers, which was 90 per cent more than in 2005.

Rental fraud

The director general of the Tax Agency, Luis Pedroche, confirmed last week that the number of inspections would increase. Speaking in Santander, he said that there would be greater co-operation with other state administrations, that the aim of the new measures was to tighten control over money earned from property rental and sale, and ensure that declared earnings conformed to the reality of the property market in Spain

Almost a million properties for rent are not declared to the tax authorities, which means that six of every ten such transactions are kept secret. The Tax Agency puts the figure of 1,818 million euros on the amount of money lost to the state by this form of fraud each year.

Declaring a house will now cost more

Buying and selling property in Spain became more expensive for taxpayers last January, when the government decided to increase capital gains tax on property. The small print of the new tax reform includes a technical modification, we are told, which allows the tax authorities to consider the purchase or sale of a property to be an ‘economic activity’.

In the past, for a property transaction to be considered an economic activity, it was necessary for the property in question to be a commercial premises, or to employ at least one person. This distinction has now been eliminated, and each case will be examined individually to see if the taxpayer was acting as a private individual or as a property speculator.

Story from surinenglish.com

Now that Christmas is well and truly over, it seems that Britons are turning their attentions to their summer holidays with nine out of ten people in the UK planning ahead for the warmer months, NatWest research shows.

The expense of the whole holiday experience is a factor more than half filter into their decision making regarding what period to travel in, as 54 per cent told NatWest that they avoided peak times of year.

It appears that the hassle of checking into a hotel may be a situation some Britons do not need to encounter, considering that more than 250,000 people in the UK own a property abroad. A third said that spending time in their holiday home reduced the stress of travelling.

Mike Freer, head of business development at NatWest International, stated: “Family holidays should be a fun and relaxing time of year but sadly this isn’t always the case. The hassle and expense of arranging holidays can be hugely stressful - from deciding where to go, budgeting, avoiding the crowds, to making arrangements for your pets and packing within weight restrictions.”

For those wishing to purchase a property in Spain like thousands of other Britons, the NatWest Spanish mortgage is tailored for the needs of the individual and loans can be taken out in both sterling and euro.

Story from moneynews.co.uk

Notorious for tales of ‘land grabs’, Valencia is now building a new profile based on cheaper property prices and a wealth of tourist attractions and events. Following the success of the America’s Cup hosted by Valencia, the city is keen to cast off the notorious “land grab” label and capitalise on the goodwill created by the sailing event.

Formula One boss, Bernie Eccleston, has also confirmed that Valencia will host Spain’s second Grand Prix for the next seven years, using the regenerated harbour to stage the event.

A new football stadium in aluminium, glass and wood is due to be completed by 2009 and the city is also keen to host the World Athletics Championship.

Europe’s larges Aquarium and the City of Sciences complex can also be found there, with low-cost flights from the UK and Ireland, including Easyjet, Ryanair, Thomsonfly and Clickair, arriving daily.

Valencia City has seen €1 billion worth of infrastructure development, including a high-speed rail link from Madrid, redevelopment of the harbour and the extension of the metro and main airport. It also attracts more than 4 million visitors a year.

The notorious land grab issue generated plenty of bad press, which will have scared off many buyers, but the LRAU (Ley Reguladora de la Actividad Urbanistica) was revised last year and officials say that as long as clients consult properly with a lawyer and ensure they are buying land designated as “urban”, property purchases should be sound.

Justyn Medd of European Villa Solutions says that attractive property prices are also helping boost Valencia’s profile. “People can buy a detached villa a few miles inland for the same price as an apartment in some of the more expensive Costas,” he said. Average property prices in Valencia were €217,000 in May, 13% below the national average, according to Kyero.com (which monitors ‘for sale’ prices across Spain).

The price of new-build property in Valencia City is increasing too, by more than 15% in 2006 and now standing at €2,211 per sqm (almost half the price of new builds in Madrid or Barcelona). Inland towns such as Bocairent offer prices 25% below the province average. Oliva on the southern coast is 14% below. In contrast, Valencia City itself has prices 19% above the national average.

The most sought-after properties in the province are 3-bedroom villas.

Story from OPP

This report aims to provide a snapshot of the current state of the Spanish property market, from an independent, and non-sales perspective. To this end it reviews the Spanish government’s latest figures on the performance of the Spanish real estate market, and contrasts these with observations and anecdotal evidence from Spanish property professionals.

Overview of the Spanish real estate market

Some alarming things have been written about the Spanish property market in recent articles like ‘Survive the Costa property crash’ (Sunday Times, April 29), ‘Costas house price crash’ (Times, April 27), ‘Euro helps topple Spanish property’ (Telegraph 25 April), and ‘Spanish property boom ends’ (Financial Times, April 24). Based on the headlines would think that the Spanish property market was in an advanced state of collapse. This is not actually the case.

The event that inspired all these gloomy articles was a share price correction of property companies quoted on the Madrid stock exchange, as jittery investors dumped construction stocks in April. At the time of writing shares of property companies are some 25% below their February highs. One company – Astroc – is down over 80%, though that still leaves it 120% up over 12 months – a great annual investment return by any measure.

The fall in property share prices was overdue and somewhat expected after speculation had pushed up prices too far. Much of the press reporting glossed over the stock market context, giving the misleading impression that it was the Spanish property market in trouble. Of course trouble in the stock market is not good news for the property market, as it reveals increasing pessimism about Spain’s housing market. But falling stock market confidence and property share prices it is not the same as a housing market crash.

In fact, the reality of Spain’s property market’s performance in the last quarter is not as bad as you might think from recent articles, but not as good as the official housing price figures from the Government imply. Spain’s decade long real estate boom is over, and it is a buyer’s market, but it is also a complex situation of regional markets performing in different ways.

Latest figures on the Spanish property market

Average national Spanish property prices rose by 7.2% to 2,024 euros/m2 over 12 months to the end of March 2007, according to figures from the Spanish housing ministry.

The story these figures tell is one of Spanish property inflation slowing down from 18.5% in 2003, 17.2% in 2004, 12.8% in 2005, and 9.1% by the end of 2006. This is the lowest rate of property price inflation since 1998, when Spain’s property boom started. Based on the Spanish government’s figures, it looks like the Spanish property market is on course for a soft landing, in which property prices rise in line with general inflation. At the same time, all areas are still experiencing annual property price growth, and the national average is double the general inflation rate, providing a reasonable return on investment.

By autonomous region property prices rose the most in Ceuta and Melilla (13.8%), followed by Galicia (12.3%), and the least in Madrid (4.5%) and La Rioja (2.6%). Price increases in all of Spain’s Mediterranean provinces were below 10% for the first time in 10 years.

The problem is that the government’s figures have to be taken with a pinch of salt. They can be unreliable, and sometimes show property prices as increasing when they are falling. It is difficult to gather reliable housing price statistics in a country like Spain where under-the-table cash payments are still widespread. When cash payments start to fall, as it appears they might be, property prices recorded on deeds go up, even if transaction prices are falling.

Whilst the government’s figures show reasonable, if cooling, price increases, figures from Spain’s land register show a clear slowdown in transactions during 2006.

The total number of property transactions recorded in Spain’s property register – the Spanish equivalent of the UK’s land register – fell from 989.341 in 2005 to 916.103 in 2006, an annual drop of 7.4% in unit terms.

Resale property transactions fell by 4.97% to 526,509 units (57% of the total), whilst completed transactions on newly-built properties fell by 10.11% to 389,594 units (43% of the total). Transactions fell in Andalusia by 7.3% to 178,189, in Catalonia by 8.8% to 152,802, and by 8% in the Valencian Region to 136,720. These figures show a market contracting against a background of an increasing supply of new properties. The notaries association has announced reported that property transactions in March of this year were 30% down on the year before.

On the question of property asking prices, which say something about the confidence of vendors, figures from Kyero.com show big variations in changes of regional asking prices over 12 months to the end of April. For instance asking prices appear to have increased by 10.7% in Malaga province, to an average of €304,355, but fallen by 12.5% in Mallorca, to an average of €515,000. This would imply that vendors are in the ascendancy in Malaga, but losing power in Mallorca. What is certainly true is that buyers and vendors have to adapt to the conditions of local markets, and negotiate accordingly.

Spanish property market feedback

The government’s figures may not be the most accurate, but they do at least capture the slowdown in the Spanish property market. Information from other sources tells the same story. Real estate consultants Knight Frank report that sales times on the Spanish coast have doubled to between 24 and 30 months over the last 3 years. A study by property consultants Aguirre Newman finds that property prices on the Costa del Sol have fallen by 4.7% over 12 months, though part of this fall can be explained by a trend towards smaller properties. And a report from consultants Grupo I estimates that demand for newly built holiday homes on the Spanish coast will fall by 18.3% to 90,000 properties this year, with the market shedding 26,000 transactions – a drop of 22.4%- of newly built property in 3 years. To understand what is really going on you have to break it down by region.

COSTA DEL SOL

Buyer activity on the Western Costa del Sol peaked in 2003 and has been falling ever since. Corruption scandals, money laundering busts, and illegal building problems in Marbella damaged buyer confidence in the whole region, and a deteriorating price-value calculation encouraged potential buyers to look elsewhere. “Property prices are back to where they were 2 to 3 years ago,” explains Mark Clifton of the Internationa Property Partners in Marbella.

But after several difficult years there are now some grounds for optimism. Malaga airport is being expanded, and a new rail link under construction along the coast should significantly improve access, and boost visitor numbers. Corruption is being tackled, demand is diversified, and vendors many now realise they have to accept offers. Attractive properties in the right areas and the best developments appear to selling quickly if the price is realistic, and inland there is an acute shortage of the kind of fincas that affluent British buyers want. “Buyers today are savvy people with money, who are well informed and know what they want, not the deranged investors with 100% mortgages who inflated the bubble a few years ago,” explains Barbara Wood, of The Property Finders.

This could be the best time in years to get quality property for a reasonable price on the Costa del Sol. But there is also a glut of rubbish identikit apartments in undesirable locations all along the coast, from Tarifa to Murcia and beyond. Steer well clear of these types of properties, wherever they are in Spain, as prices may well fall.

Example property price changes over last 2 years

• 2-bed, 2-bath duplex penthouse in the Elviria area of Marbella would have cost you around 317,000 euros 2 years ago, now would cost 325,000 euros, so little change.

• 400m2 townhouse with communal pool in the exclusive Sierra Blanca urbanisation of Marbella was around 641,000 euros 2 years ago, now around 679,000 euros, though you could pay as much as 849,000 euros for same thing if you don’t research the market.

MURCIA

Murcia is an ambitious latecomer to the property game. There has been an explosion in the region’s property supply, with 10 times as many properties now being built than 10 years ago, much of it on golf course developments intended for foreign buyers.

In recent years relatively high prices on the coasts to the north and south drove property buyers, especially investors, into the arms of Murcia’s developers, with their easy-to-sell off-plan investments. But Murcia’s prices increased too far too fast, and resale prices on many projects have been coming down in search of demand for the last couple of years.

“Some developers don’t seem to build what British buyers want,” comments Gordon of Blue Med Properties. “When prices rise, buyers expect more in return, so there is now a glut of properties on new developments that don’t match buyer requirements at the price. That’s going to stop prices rising anytime soon.”

There are fewer British buyers around than in past years, though the ones that there are seem well informed, looking for value, and serious about buying if they can find it. Overall, the number of transactions is down, and given the amount of new property coming onto the market, expect prices to remain in the doldrums for some years. The few outstanding developments in the region, such as Hacienda del Alamo, which tick all the right boxes for British buyers, should benefit from buyers who like the region, and don’t mind paying for quality.

Example property price changes over last 2 years

• Typical 2-bed flat on coast, fully furnished, in complex with communal garden, pool, private parking now costs was around 150,000 a couple of years ago, now 135,000 Euros

• Typical villa on a golf course (not front line) 3-bed, 3-bath, 200m2 plot (no pool), was 380,000, now 350,000 Euros

SOUTH COSTA BLANCA

The south Costa Blanca, centred on Torrevieja, is a great example of how to turn a lovely coastline into a downmarket concrete jungle. Inland, the property market is a minefield of illegal built projects. Big estate agents on this patch happily rip-off their clients with outrageous commissions of 20% or more in return for paying a 200 pound inspection trip (sangria included). If it’s not cheap, then it’s not good value, and if it is cheap, then it’s just cheap. This is a downmarket area with a bad cement habit, so don’t expect prices here to go anywhere, except perhaps down.

Example property price changes over last 2 years

• Typical 2-bed flat in Torrevieja costs 145k euros, same as 2 years ago

• A villa with pool on one of the urbanisations in the Torrevieja area was 180-200,000 now 160-180,000 Euros

NORTH COSTA BLANCA

The North Costa Blanca, from Alicante up, is in better shape, especially the upmarket area around Javea, Denia, and Moraira. The market on the coast is subdued but stable, and many vendors are no longer asking silly prices. “There are fewer transactions then before, but there is still substantial interest in quality properties in good locations that a core of affluent buyers want,” explains David Mear of VillaMia in Javea. Even so, there are also pockets of overdevelopment in this area, and prices for the hard to sell stuff might need to come down by 10 to 20% to find a buyer.

Inland the market for detached properties with the right characteristics appears in fine fettle. “Detached properties with a bit of land and a pool, within 1 hour of the coast and the airport, and under 300,000 Euros are selling well. I can’t find enough of them for my clients,” says Andrew Lupton, head of Stacks Relocation in Spain.

Example property price changes over last 2 years

• 2-bed flat around Javea was 220,000, now 245,000 Euros
• 3-bed villa on urbanisation in Javea area was 400,000, now 450,000 Euros

COSTA BRAVA

Transaction prices on the Costa Brava, in particular the Baix Emporda part of the coast, have been rising gently in the last couple of years. There is a good stock of upmarket properties, the market hasn’t been flooded with new apartments, and demand is driven by both European and local buyers from affluent cities like Barcelona. Nevertheless, the market is cooler than it was, with more properties on the market than before. Buyers have more negotiating power as a consequence, and vendors will consider offers. “There are still some silly asking prices around, but the chances that someone will pay them are lower,” explains Louisa Grundon of local agents PCI.

Whilst Spanish demand holds up it’s difficult to see prices falling, though it is also hard to imagine prices growing as strongly as they have in recent years. There are two factors that could shake up the market. On the one hand, the TGV-fast train will soon connect Girona and Barcelona, which could give demand for property a boost, and further drive up prices. But on the other hand, if the Spanish economy turns down, local demand for second homes could dry up, pushing down prices.

Example property price changes over last 2 years

• 2-bed flat walking distance to the beach at Pals, with communal pool and private parking was 180,000, now 225,000 Euros
• 3-bed villa on urbanisation in Pals area was 350,000, now 425,000 Euros

MALLORCA

In the last decade Mallorca has consolidated it’s position as Spain’s top upmarket destination. Prices are high, but buyers are affluent, and there is a large stock of high-end properties. In a rare display of enlightened thinking for urban planners in Spain, they even banned new development on the island from a couple of years until May 2004, putting some restraint on the supply of new properties.

As with the rest of Spain, the market in Mallorca has cooled down, and asking prices are more realistic. “Buyers are better informed, and vendors more disposed to negotiate if they want to sell,” explains David Novi, of Novi Property Mallorca. “The overall number of transactions is down, but transaction prices are stable, foreign demand is steady, and it doesn’t look like prices will fall.” Mallorca benefits from diversified and affluent European demand, which reduces the risk of investing in property on the island. Menorca is stable, with low levels of new construction. Ibiza is a bit riskier, as there is a lot more property on the market, and its rave image is starting to get a bit tacky. On Formentera, vendors can still ask what they want.

Example property price changes over last 2 years

• Price of a 3 bedroom, 2 bathroom restored Alaro Town House, with a small garden / patio (traditional Mallorquin village house popular amongst many foreign buyers seeking homes away from the main coastal resorts) has risen from circa 260,000€ in 2005 to 330,000 today (i.e. approx 12%) per annum.

• Price for a 2 bedroom, 2 bath apartment (under 5 years old) in the popular resort of Alcudia stands at circa 240,000€ today but was around 180,000 - 190,000€ in 2005. Again a similar growth rate.

Other factors: Interest rates and debt levels

Euribor - the interest rate used to calculate repayments for most mortgages in Spain – now stands at 4.249% after rising for 19 consecutive months. Euribor has risen by 32% in a year, and by over 100% since June 2004. Over 96% of mortgages in Spain are variable rate, which means that rising interest rates have an almost immediate impact on household budgets. At the same time, Spanish household debt has risen from 75pc of disposable income in 1999 to133pc at the end of 2006. Spaniards are up to their ears in debt, and the cost of debt is rising fast. This is bound to reduce local demand for holiday homes on the Spanish coasts, once again at a time when the supply of such properties is increasing.

Spanish housing starts

In 2006 there were 915,745 planning approvals according to Spain’s college of architects. According to the government there were 664,924 housing starts, and 597,632 building completions. In comparison there were 235,360 housing starts and 213,717 building completions in the UK, so Spain is building almost 3 times as many new properties as the UK. For several years now the supply of new properties in Spain has overshot demand for housing, and some 50% of these new properties are located in provinces along the Spanish Mediterranean coast.

If housing starts continue at present levels, the chances of a price crash in the Spanish property market will increase significantly. Both the Pedro Solbes (Minister of Finance) and José Luis Malo de Molina (Bank of Spain’s head of research) have suggested 450,000 to 500,000 annual housing starts as appropriate to meet demand for new housing in Spain, which in theory is driven by demographics, life style changes, holiday home buyers from northern Europe, and immigrants from the developing world. At present price levels, and with interest rates on the rise, it is difficult to see how demand will cope with even the reduced levels of supply suggested by Solbes and Malo de Molina.

Conclusions

The Spanish property market was incorrectly portrayed as melting down after the share price correction on the Spanish stock market. In reality, the overall market is not falling, though some regional markets are faring better than others. But the stock market jolt has help focus people’s attention on the serious imbalances affecting Spain’s housing market.

The big risk to the market comes from over-provision, as Spanish developers build several hundred thousand more properties per year than the market needs. This oversupply is partly due to years of inappropriately low interest rates for Spain once in the EUM.

With the Spanish economy now over-dependent upon the housing sector for economic growth and employment, there is a risk that a much-needed fall in housing starts will bring about a construction-lead recession in Spain. If this happens, demand for holiday homes will be hit hard, and house prices will fall in many areas. But even in this worst-case scenario, attractive properties in desirable locations with foreign appeal should hold their value, and recover quickly as economic conditions improve.

With the Spanish economy growing at close to 4% - one of the highest rates in the developed world – and with forecast growth of 3.7% in 2007, and 3.4% in 2008, it is difficult to imagine a construction-lead recession at present. Without a recession, the Spanish housing market is more likely to stagnate over the next few years than fall.

Having said that, there are many areas up and down the Spanish coast that suffer from a serious glut of over-priced, poor quality, unattractive properties in mediocre overdeveloped locations. Property prices in some areas are starting to fall, and are likely to continue doing so.

Buyers and sellers who wish to take advantage of the situation will need to do their research, keep a close eye on the market, and study local market conditions carefully.

Story from Spanish Property Insight

What a battering the Spanish property market has taken in the media. Spanish construction firms recorded losses on Madrid’s stock exchange - but did this warrant the “nosediving” headlines about Brits’ number one second-home market heading for a “crash”? Within 24 hours of Astroc’s news, Medsea Estates - the only AIM-listed, financially-regulated agent in Spain - saw its value drop 25%. Founder Tony Gatehouse says he listed on AIM as he wanted to show clients how responsibly Medsea operates but has spent a fortune on damage-limitation PR to put things right.

To make things worse, Sir Trevor McDonald’s Tonight crew heads down to Spain to tell another doom and gloom story for ITV. Those who appeared on the programme - and others who were interviewed but edited out - told me all the positive things they said failed to make it into the final cut. Instead, they said, the programme showed an unbalanced story portraying the whole of Spain in crisis - no stunning resorts and no happy buyers. An auction company was also given a hard time because it only sold one property under the hammer. I was told by someone in the audience that the auction was organised at such short notice that the auctioneer had to phone friends to sit in the room. Then ITV tells us a story about a British buyer’s ‘land grab’ problem, without pointing out to viewers that this was specifically a Valencia issue.

There is absolutely no denying that there is a slowdown and over-development in certain parts of Spain but business writers are being too sensationalist. Perhaps Spain should change its name because headline writers are rhyming Spain with too many words like “pain”, “no gain”, “strain” and “shame”. Hopefully OPPs Spain Report (page 35) will give you a balanced view of the market, along with ideas and contacts for new sales leads.

• Bernadette Costello, Editor - OPP Magazine, July 2007

“Spain is a victim of its own success - people made good money, driving price inflation. There are now over 45 countries selling into the UK, many offer entry prices and investment returns that Spain can only dream of. The media fuelled this. Spain will recover, 31% of OPIC sales leads at UK airports want to buy in Spain. Now arguably at its lowest ebb, I think it will go higher, perhaps to as much as 40% within three years.”

• Peter Robinson, Richmond Green Marketing

“I don’t think the media is directly responsible. This all came about because a lot of shareholders started selling off shares in Spanish building companies and this was interpreted by the media that the Spanish property market is in trouble. It depends on how you interpret it. Spain will still be one of the most popular places for second homes and lifestyle buyers, if not the number one, but the Spanish property market is not in a ‘crash’.”

• Matt Havercroft, A Place in the Sun

“British investors and holiday home owners have concerns about the market based on personal experience, difficulty to resell property or flip units that were oversupplied and in some cases over-priced. The media has simply picked up and reported on current consumer opinion. But Brits and Irish have been holidaying in Spain since the 60’s and have a huge fondness of all things Spanish so the market will always exist.”

• Steve Dawkins, Real Estate TV

Story from the OPP

For me, the biggest news this week was the VIVA Estates announcement to reduce their commission on property sales to a flat rate of 2%. While a 2% commission may still sound high to those of you used to UK sales commissions of around 1%, it’s certainly a positive move on VIVA’s part.

Of course, not everybody is happy about VIVA’s decision. The most obvious fall-out is from the other members of the Interagency Network - VIVA was a founder of the network and a majority shareholder. Their 2% announcement effectively closed down the Interagency Network which was based on agreed commission splits between the buyers and sellers estate agents. With a total commission pot reduced to 2% - there’s now not enough to go around.

Personally, I believe that the Interagency Network served the interests of buyers well. With a collection of almost 8,000 properties, you were able to visit any IN member agent, view their entire portfolio and know that there were commercial arrangements and contracts already in place to speed the purchase of the home of your choice. This convenience came at a price of slightly higher commissions - around 5% - but I believe the buyer received real value for that extra cost.

That’s now a moot point with the dissolution of the Interagency Network although you can expect the remaining member agents to continue with a similar arrangement quite soon - albeit under a different name.

Aside from the impact of this to the IN - where does this leave other estate agents who have never been part of such a network? On the Costa del Sol and Costa Blanca many agents were already fixing their commission rates at around 2% - long before VIVA’s announcement. I think that you can now expect this rate to become the ‘norm’ over time - assuming that it represents a viable business solution for the agents operating in those parts of Spain.

I believe that the less developed, inland areas of Spain will take a while to follow, mainly due to lower levels of competition and a lower average property value. In fact, many inland agents already operate on a ‘flat-fee’ basis because some properties are so cheap that charging a sales commission would not allow them to operate at all.

What does this mean to you? Often, change in a developed market occurs because of commercial pressure - and that drives costs down and service levels up for the customer. One of the main attractions of owning property in Spain now is that it is a mature market. That means better regulation, more efficiencies and lower costs for you. Over time, I think that the VIVA announcements will contribute to you receiving better levels of service and value from every estate agent that you deal with - and that’s a good thing for you and the market in general.

Martin Dell, Kyero.com

The Spanish parliament has passed a law designed to improve the status and protect rights of self-employed workers.

Since Brits discovered the benefits of moving to Spain, the majority of younger expats have lived the dream of being their own boss, starting up companies such as construction firms or holiday ventures. However, until now they have always faced discrimination by the Spanish government, with a lack of sick pay entitlements, no paternity or maternity leave, and no minimum health and safety conditions in the workplace.

The new statute, named Estatuto del Trabajo Autónomo (The Statute of Self-Employed Work), is the first attempt in 40 years that the Spanish government has attempted to rectify these failings, which affect conditions for more than three million people in Spain. It is the first law ever to specifically regulate this sector, and has dissolved inequalities between the self-employed and salaried workers, ensuring that all workers receive social security protection, regardless of their status.

Under the law, self-employed men will be entitled to 15 days’ paternity leave while self-employed women will have their maternity rights extended to match those of salaried mothers. Self-employed workers will receive full unemployment benefit in the event of them losing work as a result of circumstances beyond their control, and will be entitled to sick pay resulting from both illness and accidents. Self-employed workers in especially dangerous sectors will be entitled to early retirement and minimum health and safety conditions in the workplace will apply.

Unusually, the bill was approved unanimously by both of Spain’s opposing political parties, and has been rated by the Socialist party as one of the most important laws to be passed in the country since the 1980s.

Story from homesworldwide.co.uk

Few people would deny that Spain’s Costa del Sol - literally the Sunshine Coast - is one of the most popular holiday resorts in the world. In the last half century, the region has grown astonishingly in popularity. In the early days, the area was home to small traditional Spanish villages, with whitewashed walls and dusty streets.

However, once the secret of the Costa del Sol’s fantastic climate and potential as a holiday resort got out, the pace picked up. Developers built modern state of the art resorts and provided facilities and attractions for the tourists they were sure would come and spend their holidays there.

And they were not wrong. The Costa del Sol now plays hosts to literally millions of visitors each year and has a near-continuous urban development of high-rise settlements and resorts running the whole length of the coast. According to investment website Spanish Property Insight, the Costa del Sol is “one of the world’s great holiday destinations”.

Spokesman Mark Stucklin says that the south coast in particular is coast is very attractive due to the climate and excellent leisure facilities. He described the locality as a mixture of developments being both one of the most popular coasts for relocating to” and also “Spain’s main holiday coast”.

“It’s a good place to buy a holiday home because of the climate, and because it’s probably got the best leisure offerings in Europe - golf courses, hiking around the coast, great shopping, a lot of restaurants… In that respect it’s one of the world’s great holiday destinations, without a doubt,” he explains.

However, he advised investors that they would need to be in it for the long-term if they were looking to make decent returns on their initial outlay. The Costa del Sol is not suitable as a short-term investment, he advised. However, he says that “as a long term capital protection investment over a ten year period, I would expect you would be able to not lose money.”

Developers in the Costa del Sol are currently trading heavily on the region’s reputation as a golfing hotspot. New courses are being designed and laid out all the time, with the aid of golfing pros such as Jack Nicklaus. Added to the fact that the Costa del Sol is famous as a playground for the rich - no strangers to the golf course themselves - golfing tourism is a market that the potential investor here may wish to consider.

Story from spanishpropertyinsight.com

Alicante residents regard golf courses as ‘an excuse for property development’. Golf courses in Spain, especially in new, rapidly developing areas, come hand-in-hand with property. While along the older courses on the Costa del Sol property has been built, it’s usually been over a number of years and by different developers. In the popular southern Costa Blanca and new boom region of Murcia, golf courses have developed differently, usually with one company overseeing the development of a whole site.

Now Professor Maria Ascencion Molina of Elche’s Miguel Hernandez University has produced a doctoral thesis concluding that most people in Alicante province see golf courses being built as an excuse for property development rather than golf courses benefiting the sport. Her poll was split among three groups of people: the general public, golfers and golf course managers. Over half of the golf course managers and about half of the golfers polled, in fact, believed the link between golf courses and property development is actually damaging to the sport.

As the new courses planned for Alicante will bring the regional total to 38, Professor Molina also quizzed people on whether they thought that was enough. In the opinion of golf course managers, 38 was considered ‘few’, while Alicante’s general population thought it was ‘too many’! On the tricky subject of water there was also a split between course managers and the local population, with golf course managers regarding water used on golf courses as being used for agricultural purposes and golfers and residents regarding the use of water there as recreational.

On one subject, though, everyone agreed: a golf course makes an urbanisation look more pleasant and attracts tourists.

Story from homesworldwide.co.uk

In Spain, unless you are buying a detached property or a rural finca there is every chance you will come across a comunidad de propietarios. This is the name given to the organisation comprised of all the owners who have an interest in the complex or development and whose task it is to manage and look after the building and the facilities that your property enjoys along with other properties in the same development. If you buy a property that has any kind of shared facilities such as a pool, gardens, private roads (even the external walls of an apartment block), there will be such a community and you will automatically become a member as you will own proportional share of these areas and facilities.

While you may not relish the thought of annual general meetings with Presidents and treasurers and having to abide by rules and regulations made by the committee, it is actually a very useful and democratic means of managing a complex or development and can even provide a lot of useful information to you before you purchase the property.

The Ley de Propiedad Horizontal or Horizontal Property Law governs such communities and it sets out exactly what is required and how the cost of maintenance and repairs are to be divided among the owners. The first document you should look for before you purchase is the community’s master deed or titulo constitutivo. This will describe each property that forms part of the complex as well as all the facilities shared by the community. It will state what proportion of the cost is allocated to your individual property and to every other property in the community. These costs are decided by reference to the size of the property and any desirable features that may demand a premium. The master deed will also contain the community Statutes estatutos de la Comunidad which govern how the community will be run in addition to the or interior rules normas de regimen interior which govern the more mundane aspects of living in the community day to day.

When you purchase a property in a community it is essential to ensure, as far as possible, that there are no major repairs likely to be needed in the near future. While new properties will have a guarantee from the developer, older properties will not and the cost will have to be met by the residents. After the expense of purchasing the property you would not like to find that you have to contribute to substantial repairs to an area that is not in the immediate vicinity to your own property and that was not mentioned to you by the agent! One way to avoid this type of problem and perhaps find others would be to ask to look at the libro de actas which is a record of the minutes of the meetings of the committee. From this you should be able to see what problems and concerns the residents have raised with the committee of the comunidad de propietarios at meetings.

When you purchase a property your solicitor will need to obtain a certificate from the President of the community showing the status of your property’s account; if there are any arrears owing to the community from the seller, you will be liable for them up to a maximum of two years. Apart from having the legal authority to collect the community fees, the President also has the power to commence legal proceedings against owners who are in arrears and the courts have established an accelerated procedure to deal with such claims. Sanctions for non-payment can include an embargo being placed on the Inscription of the property at the land registry to prevent a sale and the ultimate sanction is that the property may be seized and sold at public auction!

Decisions about the management of the community are usually made by a simple majority vote, although any change to the Statutes will require the unanimous approval of all owners. Often attendance at the annual general meeting can be a lively affair, with several different nationalities of owners trying to get their point of view across, or asking for improvements to the facilities that they feel would be of benefit. As with any democracy, you have a say in the outcome of the meeting. The ability to challenge decisions is limited to those that are considered to be illegal, contrary to the community statutes or in the event that the decision has such an effect as to seriously damage the owners interests in his property. In these cases the owner can apply to the court for such decisions to be annulled. However, this right to challenge decisions is forfeited if the owner is in arrears with his community fees.

As with all aspects of your property purchase, ensure that your solicitor fully explains how the Horizontal Property Law affects your particular property and development. Make sure that you understand what the implications may be for your intended use of the property and that you understand what will be expected from you.

Story from Iuris Tantum Consulting Group

According to the new Which? guide to Buying Property Abroad - these are the top 10 things that can go wrong when purchasing overseas property.

1. Overstretching your finances - Don’t jump on the overseas property bandwagon unless you’re sure why you’re doing it, and that you can afford it - especially if you’re securing it against your UK home.

2. Buying sight unseen - If you buy an overseas property without ever having seen it - and surprising numbers of people do - you’ve only got yourself to blame if it ends up being a disaster.

3. Buying without a lawyer - Lawyers may seem to make the process complicated, but the work they do is vital to protect your best interests - for example, telling you whether the seller has the legal right to sell. Pay extra for one who speaks good English and is qualified in UK and foreign law.

4. Failing to check credentials - Is the seller really the property owner? Is your estate agent really a qualified agent, and are they bonded to hold a deposit on your behalf? What guarantees are there if the developer goes bust?

5. Putting deposit down too early - Don’t assume that your deposit is returnable, even if it is described as a ‘reservation’ deposit. In most countries paying a deposit commits you to the purchase, so don’t hand over any money - even to a third party - unless you are sure you want to buy.

6. Choosing on the basis of price - It may be tempting to buy a property for the price of a second hand car, but perhaps the reason it’s so cheap is that nobody else wants it.

7. Ignoring the ongoing costs - Even if you hardly use it, keeping an overseas property ticking over costs money. Insurance, maintenance, property management fees, service charges and taxes all add up, so work all this out in advance.

8. Relying on budget airlines - Cheap flights have opened up huge tracts of Europe to property hunters, but don’t assume they will always be there. Ask yourself what would happen to your tourist rentals if routes to the little local airport disappeared.

9. Doing things on the cheap - If you want to avoid creating a white elephant, don’t cut corners when renovating. If you can’t afford the architects, surveyors and craftspeople to bring out your property’s potential, look for a different one.

10. Forgetting your heirs - If you want control over how your property is dealt with on your death - and avoid the restrictive inheritance rules in many foreign countries - you need to make a will. You may even need to make two: one here and one there.
Excerpt from the new Which Guide to Buying Property Abroad. Would you like to win a copy?

Millions of pounds in winter fuel payments are being handed out to thousands of British pensioners living in the Mediterranean.

Now ministers have been called upon to review the benefit which sees nearly £8m paid out in the past year, with more than 30,000 payments going to residents in countries such as Spain.

In a written parliamentary answer, James Purnell, former work and pensions minister, revealed an exponential rise in the number of recipients living abroad over the past five years, boosted by the fact that 10 countries such as Cyprus and Malta joined the EU in 2004. In Spain, there have been nearly 78,000 payments in the past five years.

The tax-free winter fuel payment is payable from November to most Britons over the age of 60. It was introduced in the winter of 1997-98, at £20 for a single householder. Today, however, it is £200, or £300 if a person is over 80.

British pensioners living abroad are entitled to the payment if they reside in a country within the European Economic Area (EEA) - which covers the 27 EU member states as well as Norway, Iceland and Liechtenstein - together with Switzerland, and were eligible for the benefit when they lived in the UK.

The benefit is meant to help pensioners “keep warm in winter”. The average winter temperature in Spain and Cyprus is around 11C, compared with 3C in Scotland and 4C in England.

The qualifying period for the payment for this coming winter is in September but, if past experience is anything to go by, there will be even more overseas recipients than last year. Given Bulgaria and Romania are now EU members, former eligible UK residents living there will qualify.

The figures show that by far the largest number of overseas recipients live in Spain. In 2002-03, some 5165 payments were made. But, by last year, this had jumped to 24,695. The total amount for 2006-07 was £3.9m.

A similarly large rise has been recorded in Portugal, where over the same period the number of payments has risen from 105 to 910. Last year’s total was £149,000.

There have also been rises in countries such as Ireland and France. In the former, some 660 payments were made in 2002-03, but by last year there were 4375, when the total payout was £737,000.

Over the same period in the latter, the numbers were 1780 and 11,505, with a total for 2006-07 of £1.8m. The accession of 10 new countries to the EU in 2004 meant that pensioners who live in these member states are now eligible.

So, for example, in 2004-05 there were 1395 payments for Cyprus but by last year there were 3005 with a total payout of £471,000. On Malta, the equivalent numbers were 265 and 570 with a total for last year of £93,000.

Alistair Carmichael, the Liberal Democrat MP for Orkney and Shetland, called on the new Prime Minister to review the payment to overseas residents living in warm climes.

Commenting on the rises in overseas payouts, he told The Herald: “This is by anyone’s standards a substantial amount of money, which seems to defeat the purpose of the benefit being made available.

“The Treasury should be looking in some way at how this issue can be addressed.”

A spokesman for the Department of Work and Pensions said: “European Community law means that some benefits acquired in one member state must be paid to people when they move to another country within the EEA. The winter fuel payment is only paid to former UK residents living in the EEA if they qualified for it before leaving the UK.

“We must treat all those states equally and may not, therefore, make payments based on winter temperatures.”

Story from theherald.co.uk

Buying a property abroad is often the realisation of a personal dream and probably represents one of the greatest expenses of your life. As part of the purchase process, you will inevitably need to transfer a sterling sum into another currency in order to pay for your property. This vital element of the purchase process - one that is often overlooked - can make a huge difference to the price, in sterling, that you will have to pay for your dream home.

Exchange rates change constantly and 10% fluctuations in a relatively short space of time are not uncommon. This could effectively increase, by 10% or more, the sterling amount that you will have to pay.

There are various organisations that can convert your sterling into whichever currency you need. Specialist currency dealers will normally offer you a better rate of exchange than your bank and provide a more personalised service. Foreign exchange companies like Moneycorp often offer a proactive service to their clients, using their expertise to monitor exchange rates on the clients’ behalf in order to achieve the best possible rate of exchange.

If you ask your bank to send the money you should expect them to charge you for doing so. The local bank may also make a substantial charge for receiving the money. A reputable currency trader may well be able to reduce those overseas charges substantially by sending the money via a cheaper route.

Your currency can be delivered any time within two years at an exchange rate fixed at the time of purchase. This is called ‘forward buying’ and it will help you secure an exchange rate at an advantageous level even if you do not have all your sterling available to transfer at the time of purchase. Forward buying removes the risk of adverse currency movements that could lead to the sterling value of your overseas property increasing between the time of signing and the contract and the actual payment.

EURO SAVINGS CASE STUDY

The savings you can make by using a foreign exchange specialist instead of your bank are considerable. For example, a couple wishing to purchase a property in Spain for 200,000 euros would have paid the sterling equivalent of £135,107 in December 2005. Three months later they would have paid £139,034 for the same property. By securing an exchange rate in advance, they would have made a saving of almost £4,000.

MONEYCORP BENEFITS

Moneycorp can help you achieve the best exchange rates making your money go further. They can also offer a range of services that will help protect you against adverse currency fluctuations.

In addition, you can take advantage of the following benefits:

No commission charges or receiving bank fees. Fast, efficient worldwide transfers. A dedicated dealer to guide you throughout your currency transaction(s). 24 hour market monitoring enabling you to benefit from currency fluctuations outside of normal banking hours. Regular Payment Plan - smaller regular transfers. Extended office opening hours 7:30am - 10:30pm Monday - Friday and 10:00am - 4:00pm Saturday. A Moneycorp Privilege Card to purchase currency and travellers cheques commission free at any of our retail branches. You will also receive a 1% improvement in the rate of exchange at our airport locations. Peace of mind in dealing with a company that has been trading foreign currency since 1979, has been certified to ISO 9000 Quality Assurance since 1996 and last year transacted over £7 billion on behalf of its clients.

THE REGULAR PAYMENT PLAN

Moneycorp’s Regular Payment Plan will be of great help to you if you have regular currency transfers to make. Such transfers might include overseas mortgage payments, pension payments or any other regular currency transaction.

The Regular Payment Plan offers you three simple payment options. Whichever you choose, you will always receive an excellent rate of exchange and enjoy the convenience of making payments by Direct Debit as opposed to arranging individual payments through your bank.

Fix the Sterling amount that you transfer each month. With this option the currency amount that you receive in your overseas bank will vary according to the rate of exchange at the time of each transfer. Fix the currency amount that you receive. Know exactly how much currency you will receive in your overseas bank account, with the Sterling amount debited from your UK account varying according to the exchange rate at the time of each transfer.

Fix the exchange rate for all of your transfers. By fixing the exchange rate, you will know how much in Sterling you will pay and how much currency you will receive in your overseas bank account. This option is available for periods of between 6 and 24 months.How does it work?

The Regular Payment Plan is flexible to suit your needs. Your regular payments will be paid to Moneycorp by Direct Debit. Moneycorp will then arrange for all currency transfers to be made to an account specified by you. Moneycorp will not debit your account more than 5 working days before the value date of your currency payment. Please note that the minimum monthly transfer amount is £250.

The only charge for this service is a £4 transfer fee for each transfer made on your contract.

Bank receipt charges are eliminated. Moneycorp guarantee that their clients will not pay any bank receipt charges when sending funds abroad. This guarantee applies regardless of the amount being transferred or to which bank.

CONTRACT OPTIONS

The purchase or sale of a currency for immediate delivery. Spot contracts can be very useful if you have an urgent requirement for currency, and are seeking competitive exchange rates with fast and efficient delivery.

Fixing an exchange rate for the purchase or sale of currency for delivery at a later date (up to two years). This type of contract allows you to fix a rate even if you do not have all your Sterling available to transfer at the time of purchase. Forward buying also removes the risk of adverse currency movements that could lead to the Sterling value of your overseas property increasing between the time of signing the contract and making the actual payment.

Setting a minimum level at which required currencies are bought or sold. Stop loss orders effectively protect you from adverse currency movements by guaranteeing a minimum exchange rate.

Setting a level of exchange rate at which, if achieved in the markets, you will buy or sell required currencies.

Running a Stop Loss Order in parallel with a Limit Order means that you will effectively set upper and lower currency trading thresholds, making your currency transactions more predictable with rates guaranteed within a given range.

As flexibility is crucial, your order levels will be monitored constantly and levels will be amended appropriately, with your approval. Our expertise and market knowledge, coupled with extremely flexible market orders will allow you to manage your foreign exchange needs 24 hours a day.

FAQ

How do I purchase currency?

Once you have set up your trading facility with Moneycorp, you will be able to buy currency over the telephone.

How do I pay for my currency?

After booking an exchange rate with Moneycorp, you will need to transfer funds to their client account. The easiest and quickest way is by CHAPS or BACS. Bear in mind that any cheque will have to clear before funds can be sent. Once Moneycorp have received your cleared funds, they will transfer your currency to the account of your choice.

How can I find out current exchange rates?

The Interbank rate can readily be found on the Internet and on Ceefax. Moneycorp’s website has live currency charts and you can also view historical exchange rates. Although a useful guide to current market levels, do bear in mind that unless you are trading millions of pounds on a regular basis, you will not receive the Interbank rate for your own transaction! For a live quote on the amount you are looking to exchange, it is best to call Moneycorp.

FURTHER INFORMATION

To request further information or to request a currency consultation from Moneycorp please click the following button:

Story from moneycorp.com

50% of Spain’s capital investment is in property, which is also responsible for half of all new jobs and a significant contributor to Spanish GDP. The continued inflation of house prices has put a home in Spain beyond the reach of many foreign and national buyers just when more and more buyers are needed to support a building boom - which is largely underpinning the economy of the country.

Recent news of the stock market devaluation of Spanish property developers has been on the cards for a long time. The Spanish government knows that the economy is dangerously reliant on the housing market. The recent clean-up in Marbella and the European Parliament focus on Valencia’s ridiculous ‘land-grab’ practices are signs that the Spanish property market is undergoing a shake up. It’s been overdue for quite some time, it might cause some temporary pain (particularly to those developing or selling property in Spain) but it’s obvious that things will change in Spain.

It’s no secret that there’s currently a glut of property for sale in Spain - at prices people aren’t willing or able to pay. Last year, 800,000 new build properties were started - three times the EU average. In 2007, another 600,000 new build starts are predicted. Who will purchase and live in these homes? Spain’s 40M population is growing at less than 0.2% each year and foreign purchasers historically account for only 10% of new sales. Combined, this equates to an absolute maximum of 150,000 ‘new’ property purchasers per year.

In 2006, just over 400,000 newly-built properties were sold. If 800,000 builds were started in the same year and there’s a maximum of 150,000 ‘new’ purchasers - we’re seeing a glut of at least 250,000 new properties in one year alone. What will developers do to meet bank loan obligations or free up working capital when they’re not selling a quarter of a million homes with a construction cost of around €20 Billion? Some market analysts estimate that property in Spain is currently overvalued by as much as 30%. Developers certainly have the margin to enable them to absorb this kind of reduction in price - and still make a profit.

I think that, short term, developers will slowly discount their excess property stock in Spain until buyers start biting again. This will undercut the resale market and reduce the number of second-hand transactions and increase the average ‘for sale’ time. Sellers who want to, or must sell quickly will need to compete on price with equivalent new build properties. Thus, developers will control the reduction or levelling-off in house prices, just as they have controlled its increase.

Clearly, there’s more angst and pain yet to come but all is not doom and gloom. Spain is becoming a buyers market again. In the short-term, we’ll see distressed sales and property auctions accounting for an increasing number of property transactions. Better informed and savvy purchasers are increasingly using the Kyero.com Spanish Property Index to identify property bargains and benefit from the current situation. The Kyero.com Price Index is independent of any government or sales spin and is the only accurate guide to house prices and trends in Spain.

I think the Spanish government are realising they need to take firmer control of the economy and wrestle that power away from the developers. I think they’re increasingly understanding the responsibilities of being on the team of European players and their contribution to the European economy. When ‘normality’ returns to Spain and house prices and the supply of homes match purchasers needs again, Spain will be all the stronger for having weathered this current storm. Until then: Buyers, get moving on those bargains. Sellers, be prepared to move on price.

Martin Dell, director of Kyero.com, the largest English-language property portal in Spain. The Kyero.com Spanish Property Index is updated on the first business day of every month and is freely available to download from http://www.kyero.com/price_index

For a decade, Spaniards have built an economic boom on cheap credit and a housing and construction bonanza. With their economy outpacing euro zone average growth, year after year, it was easy to ignore roaring inflation and uncompetitive industries. But with the property sector cooling and economists forecasting a steep slowdown in 2007 growth, the Spanish are becoming more worried about their lopsided economy.

Analysts warn Spain may soon be on track for economic mediocrity unless it shifts away from bricks and mortar into competitive service industries and value-added exports. Some even predict an eventual housing market crash.

“We are at the peak of this growth cycle,” says Juan de Lucio, head of research at Spain’s Chambers of Commerce. “We’ve got to look at our imbalances because otherwise we’re going to pay for them.”

On the surface, the Spanish economy is the envy of its neighbours. Annual growth has averaged 3.6% over the past decade and the country has gone from a relative backwater to representing about 11% of the euro zone economy. Look closer, and analysts see a lopsided economy too dependent on consumer spending and housing investment for growth, and weak in exports.

Inflation is running at 4%, twice the European Central Bank’s target ceiling level of 2% and the highest rate in the 12-nation euro zone. Membership of the euro zone in 1998 allowed Spain to load up on cheap credit as the European Central Bank geared interest rates to the slower growing German and French economies.

The Spanish sank money into real estate. Housing prices have risen 130% since 1997 and construction has overtaken tourism as Spain’s strongest sector, representing 12% of gross domestic product (GDP), according to the Bank of Spain.

In cities like Madrid, the property sector is finally building more first homes than Spaniards need, or can afford, according to real estate consultants. Spanish GDP growth is expected to fall from around 3.4% this year to between 2.5% and 3% in 2007 as higher interest rates increase financing costs and eat into disposable incomes.
“There is very little to stop this runaway train until there is just too much stuff on the market and prices collapse under their own weight,” says Charles Dumas, chief economist at Lombard Street Research.

Analysts have long warned of Spain’s fragile economic foundations. The euro zone’s fourth largest economy cannot produce as much as it consumes and closes the gap with imports and borrowing to cover the financial shortfall. Spain’s current account deficit is expected to climb above 8% of GDP in 2006 and become the second largest among industrialised countries in absolute terms, after the US, and the largest in percentage terms.

Preventing a housing crash are still relatively low interest rates and 11% population growth in the last eight years on a wave of immigration, say analysts. “It’s a slowdown, there is no bubble,” says property developer Jose Miguel Dominguez at Madrid’s GCM group. Spanish economists say the country has a two-year window of opportunity to cut its over-dependence on the housing market. They talk of a silver lining in the domestic demand slowdown. Many see a soft landing if inflation falls and exports recover competitiveness, replacing some of the activity of the cooling housing sector.

Spain’s government raised its 2007 public spending limit 6.7% to promote research and development in value-added industrial goods, following in the footsteps of Ireland. “The imbalances in Spain’s external account are going to fall,” says Citigroup strategist Jose Luis Martinez.

Economists outside Spain are more sceptical. With its high inflation, Spain has suffered a dramatic loss in cost competitiveness. And even with increased demand from the growing French and German economies, its exports have only limited market share.
Structural problems, including a surge in labour costs, will take a long time to fix, says economist Ralph Solveen. “I’m not sure we’ll again see the high growth of the last two, three years,” says Solveen, of Commerzbank in Frankfurt.

Story from Gulf Times Newspaper

Ever fancied owning your own room in a palace for little over £150,000? Or perhaps a nine-bedroom town house for under a million pounds is more your thing? This may be a pipe dream in Britain, but take a three-hour flight to Jerez in Andalucian Spain and lovers of period properties are spoilt for choice. Wandering around the town house currently owned by the manager of the local Barclays bank it is hard to believe all this could be yours for £822,000 (price negotiable). It’s a lot of money, but how many houses of that price offer you nine bedrooms, five bathrooms, a wine cellar, gun room, separate chambermaid’s quarters, two patios and a private roof terrace in a beautiful location?

The palatial town house has belonged to the Peman family since 1827 and could be renovated to give the owner separate flats for rental investment or, perhaps more sympathetically, converted into a quirky boutique hotel, something which Jerez is short of. The current owner’s grandfather, the famous Spanish poet Jose Maria Peman, was one of the few intellectuals to support Franco. Not only is the property enormous, but it is bursting with original features, such as the beautiful antique engraved panels on the wardrobes in the bedrooms, each based around a different theme. In what was one of the children’s bedrooms, for example, the 100 or so panels tell the story of the Bible from start to finish.

Jerez, 40 minutes from Seville and half an hour from the nearest beach, has all the ingredients you need for the full-on Spanish experience. The town is perhaps best known for its sherry production and visitors can spend hours in the bodegas. Oak barrels representing the city’s history are stacked on every street corner, while the streets themselves are lined with sweet-scented orange trees.

Both a centre of equestrianism and flamenco, Jerez has all the tourist and shopping appeal of a big Spanish city without losing the charm of a smaller, traditional town. Neighbours still meet in the squares at night to enjoy a bowl of patatas bravas washed down with a cold glass of fino at their local tapas bar.

Transport links are good. The airport is going through an expansion programme, including a second runway which has recently opened, and you can fly with Ryanair from Stansted for as little as £30 one way.

You don’t need to be sitting on a fortune to invest there either. If £800,000 is a bit of a stretch, you can easily invest for a fraction of this price.

‘Property prices are about £1,350 to £1,700 per square metre, compared with Seville, where they are £2,000 to £4,000,’ says Chris Mercer, managing director of Mercers property agents . ‘With as little as £100,000 you could purchase a two-bedroom flat in the heart of old Jerez, where property is more likely to increase in value and rental demand is good.’

Alternatively, you could invest in a three-bedroom apartment in a former 16th-century palacio for £156,712. The interior is none too exciting and a buyer would probably want to update it and convert the unused loft space into an extra room. However, the building is nothing short of stunning.

It originally belonged to the Carrizosas, a very old and famous family of the Jerez aristocracy, after whom the square outside is named. The property was fully restored 15 years ago when it was split into 18 apartments based around various shared courtyards and garden areas. Despite its size, the palace is virtually hidden from the street, with the only shared entrance being a tiny metal door.

Meanwhile, tucked away down a side street running off Plaza Arenal, Jerez’s main square, Mercers is overseeing a project to convert a grand old town house into eight luxury flats while retaining the original features. The best buys have to be the one-bedroom attic apartments, which give you your own eight square metres of private roof terrace overlooking the church next door. The work is due to be finished in August 2008, and prices start at €144,000 (around £100,000) for a one-bedroom flat on the first floor with street views.

If you are looking for somewhere ready to move into, perhaps as a second home for family holidays, you can buy a six-bedroom house with a rooftop terrace and all its original features fully restored. The wrought-iron front door of Calle Doctrina 6 opens on to a traditional Andalucian courtyard with a marble floored patio, original columns, stonework and fountain. There is a newly fitted kitchen and a library complete with original wooden beams downstairs. Upstairs, the bricked-in stone arches in the bedrooms are evidence of the convent the property was once part of. It will cost you £400,000 plus tax.

‘Prices are so much lower in Jerez because there is no marketing hype for this area, nor are there fast-buck developers looking to rip off foreign buyers - the main market is the local one,’ says Mercer. ‘This may change, but for now property prices are great value and although this part of Spain does not have the “glitz and glamour” of the Costas, it is not associated with the same problems.’

Story from observer.guardian.co.uk

The president of the Spanish Mortgage Association (AHE) confirms that property prices will stop rising little by little, in step with inflation.

Industry professionals agree that property in Spain is overvalued and that prices are due to drop soon. The drop, however, won’t be sudden and pronounced; sources predict a gradual lowering instead. Gregorio Mayayo, president of the AHE, is convinced that Spain is not facing a crisis in the real estate sector.

Mayayo believes that Spain will avoid a traumatic property devaluation - such as that experienced by the UK and US - thanks to a large group of expectant buyers held off by insufficient supply. He also adds that the rental market in Spain is practically non-existent, and that anyone who sells is forced to buy another home even if it’s of lesser value.

A massive increase in the number of homes on the market is unlikely, especially considering the possibility of lower prices, since this would provoke long lines of buyers and prices would rise immediately unless such an event coincided with a sudden economic halt, increased unemployment and rising interest rates.

Mayayo doesn’t believe Spain faces such a situation and points out that current market conditions differ greatly from those of the real estate crisis of the early 90’s. Today, construction companies are much stronger and can handle waiting up to a year for properties to be sold.

The main factors of the yet-to-be-halted rising property rates have been the arrival of large numbers of immigrants, the addition of women to the workplace and an increased presence of young buyers in the market.

Regarding the significant number of properties purchased by non-Spaniards, Mayayo points out that foreign homeowners in Spain make mortgage payments as well or better than Spaniards. He also emphasised the crucial role of young buyers, who’ve cleared the market of a class of homes that would otherwise have been nearly impossible to sell, greatly facilitating sales of remaining properties.

Story from 999today.com

Environment officials in Spain have announced that in an effort to diminish the effect of the country’s greenhouse gas emissions, two regional governments and the capital city plan to plant millions of trees.

In 2006, Spain’s emissions were 48 per cent higher than in 1990. However, the government is determined to lower its emissions, and improve the future environment of its residents. The country is tackling energy consumption with increased use of solar and wind power, enforced by building regulations that make these measures a routine feature of property construction in Spain.

As part of the move to transform Spain into one of the greenest countries in Europe, the Castilla-La Mancha region has already increased its forested area to 5m hectares, according to Environment Councillor Jose Luis Martinez, and plans to plant 20 million trees in the next four years.

The Basque Country is funding the planting of 250,000 trees in Kenya between 2006 and 2009, and will plant 10,000 new trees in the Basque Country itself.

Madrid already has extensive areas of parks and gardens, and plans to create new green spaces. Ana Botella, head of the city hall’s environmental department, says that the city is also planting 1.5 million trees that will absorb 9,000 tonnes of greenhouse gases a year.

The result will be a more pleasant and healthier environment with far reaching ecological affects, making Spain the perfect place to invest in property, and your future.

Story from homesworldwide.co.uk

Valencia may not currently be regarded as the most glamorous city on the Iberian peninsula, but this is all set to change. Playing host to one of the most bafflingly won sporting trophies of all - The America’s Cup – put Valencia firmly at the centre of the yachting community this year, and when the first Formula 1 Grand Prix takes place there in 2008 the remainder of the well-heeled are guaranteed to prick up their ears. And it is likely that they will like what they see when they arrive: an open, relaxed, airy and vibrant city, Valencia provides the perfect anecdote from the crush of Barcelona or the baking heat of Madrid. Situated right on the coast, this ancient city has been vital to the economic development of Spain not least because it boasts one of the largest and busiest ports in Europe.

Valencia is now a city growing internationally in both stature and recognition. The Ciudad de las Artes y las Ciencias, or City of Arts and Sciences, is an ensemble of five areas in the dry river bed of the now diverted River Turia begun in 1996 and built to commemorate the millennium. They are composed of an opera house, a cinema, gardens, a science museum and an aquarium, and the complex is a striking landmark integrated into the heart of the city. Sunk into the riverbed, it contrasts beautifully with the mixture of Baroque and Gothic styles of architecture predominant in the city.

The wonderful architecture also contributes towards the atmosphere: although Valencia hustles and bustles like any modern European city, there is unquestionably a sense that there is space and time enough for everything there. Whether touring the city by car, or exploring on foot, you find none of the crowded sense of urgency which characterises Barcelona. It is a pleasure to get to know, both as a tourist, taking in the view from the spectacular medieval towers in the heart of the old city, or as a resident, enjoying the many festivals which take place on a regular basis (just watch out for the decibel levels when they wheel out the fireworks).

Property prices in Valencia have traditionally been relatively calm, compared with the ups and downs which the other parts of Spain have been subject to. This did, however, begin to change as plans for the America’s Cup and now next year’s Grand Prix came to light a few years ago. House prices leapt by 30% after the announcement, and some flats doubled in price within twelve months.

Prices are still rising now, but exponential increases are no longer taking place; 2005 year saw a 15% increase, rising around the same amount last year, and as a long term investment it looks pretty good: the weather is fantastic for the majority of the year (during which the beach down by the marina is the place to be), and the rental market is almost guaranteed due to demand from Valencians themselves, let alone the appeal it has for both holiday makers and sports enthusiasts.

At the moment you can buy a seven bedroom villa in the city, in the popular Montecañada, for around £860,000, or a luxury villa eight kilometres outside the city with six bedrooms for £487,000, and there are many more apartments within the city, and down by the new marina which are still a relative bargain.

Outside of the city, falling in love with the surrounding area is easy, and one of the reasons is its feeling of complete seclusion compared to the regions to the south, and the Costas. And if the idea of city life doesn’t appeal, you could do worse than taking a look at where the wealthy people of Madrid choose to holiday. The town of Benecassim, an hour’s drive to the north, has long been popular with the Spanish looking to escape the dusty heat inland in the summer. It is an utterly Spanish holiday town, charming without being brash, right on the coast, with a beach which stretches into the distance for miles.

Full story from countrylife