Tag Archive | "Spain"

Struggling Housing Market Hurts immigrants in Spain

Spain’s housing market continues to fall into a deep decline, as residential real estate properties continue to fall into foreclosure. While the impact of the real estate crash in Spain is, without a doubt, affecting the nation as a whole, those that are immigrants in Spain appear to be hurting the most.

 

From 2006 to 2008, a wave of millions of immigrants came to Spain, and purchased homes. Spain seemed to be an area of great opportunity. However, the residential real estate crash quickly changed that perspective, and many of those same immigrants that invested in homes during the boom are defaulting and facing foreclosure. Recent data has shown that foreign residents are far more likely to default on their mortgage loan than domestic citizens of Spain.

 

Spanish banks have cut back on new lending in the wake of the crash, hoping to cut back on their growing losses. Because foreign residents are far more likely to default on their homes than citizens, many banks are turning them away without even the slightest consideration for a mortgage loan. With Spain’s unemployment level remaining high and housing prices falling off the charts, lenders are afraid that foreign residents will simply abandon their homes. Such a situation would bring about even more losses.

 

Spain’s unemployment has increased to nearly twenty-three percent. There are nearly one million more unemployed foreign residents in the country than there were just five years ago. As such, many are not able to keep up with their mortgage payments, and have no choice, but to default on their home.

 

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Spain’s Real Estate Market Expected to Improve in 2012

After a tumultuous few years, the residential real estate market in Spain may finally start to rebound in 2012. Many residential property analysts around the world are growing increasingly optimistic about the Spanish housing market, and believe that recovery may, in fact, be imminent.

Much of the optimism among analysts is due to the predictions of a well-known Spanish property guru, who believes that the country’s housing market has finally hit rock bottom, and will finally start to turnaround in the next year.

Analysts believe that more homebuyers and investors will look to purchase a second home for leisure in 2012. With the economy in the United Kingdom growing more uncertain, many British buyers will likely look to the Spanish housing market as well to purchase additional properties. The international growth will certainly have a positive impact on the residential real estate market in Spain. International investors will likely look to take advantage of heavily reduced prices with the intentions of buying a vacation home or rental properties in Spain.

An improving housing market will certainly have a positive impact on Spain’s overall economy. Spain’s economic condition has struggled over the past few years, and much of the economic struggles were due in part to the declining residential real estate sector. While 2012 certainly will not be a banner year for real estate sales; there is hope that sales and prices will finally experience a slight increase from the previous year. After the difficulties that the real estate market has experienced over the past few years, even the slightest increase in performance will be celebrated in Spain.

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Spanish Government Seeks Foreign Property Investors

While some nations have enacted measures that have made property investment by foreigners nearly impossible, others have done everything they can to invite foreign buyers to purchase real estate in their country. Spain is the latest country to realize that foreign buyers can help boost the performance of the residential real estate market in their country.

As a result, Spain’s government has ordered a study to determine the best and most effective ways to sell properties to foreign investors. Certain areas of Spain are particularly attractive to foreign investors, such as Valencia and Alicante. In Alicante, eighty-five percent of residential real estate sales are to foreign investors.

The Spanish government hopes that by boosting sales to foreign investors, residential real estate values will increase due to the rise in overall demand. According to various reports published throughout the year, it does appear that investment by international buyers has been increasing in Spain, though the Spanish government is looking for foreign investors to make up a greater percentage of homeowners in the nation.

Real estate investing experts that are advising the Spanish government have called for tax breaks and low interest rates so as to encourage international investors to buy property in Spain.

Residential property prices experienced a steep fall in 2011, and will likely continue their descent into 2012. As such, the Spanish government believes foreign investors in the residential real estate market are more important than ever. However, for foreign investors to make an impact, the Spanish banks must play a role by properly adjusting prices and reconsidering loan rates.

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Russian Buyers Looking to Spanish Real Estate Market

While Spain’s residential real estate market has struggled immensely in the past year, it is receiving an unexpected boost from international investors. The number of buyers from Russia has significantly increased in recent months, and has actually doubled since last year.

Russians are investing in Spanish properties in droves, as they are attracted to the marvelous scenery, and the incredible deals to be had on residential properties. An increase in the number of direct flights from Moscow to Spain has also played a major role in the rise of Russian real estate investors in the country.

Affordability and the acquisition of a European visa also make Spain an ideal choice for many international investors. By purchasing property in Spain, Russians and other international investors are far more likely to receive a visa that will facilitate any and all travel throughout Europe.

Another factor playing a major role in the increase of international investors in Spain is the presence of high-end golf courses. Prime properties, such as those on golf courses, have performed well throughout the residential real estate market downturn, and continue to do well in today’s market.

Analysts believe that international investors may give the Spanish real estate market a boost, much like they have done in other real estate markets around the world. The real estate market in Spain has faced incredible difficulties over the past year, particularly in coastal areas. International investors are likely to improve sales in coastal areas as they look to buy vacation properties outside of their native country.

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Banks in Spain Struggle with Unsellable Real Estate

The real estate market continues to plague banks in Spain, as many are now struggling with real estate properties that simply cannot be sold. Unsellable properties currently make up more than forty billion dollars in debt for the affected Spanish banks.

The vast amount of unsellable real estate assets has caused great concern among analysts regarding the overall health and stability of small to medium sized banks. Many believe that many of those banks will not be able to sustain themselves due to the enormity of the debts, and in the end, Spain may only have four banks left in existence.

The Spanish real estate market has faced enormous struggles over the past year, and with yet another European debt crisis looming, there is not much hope that things will improve. Much of unsellable real estate lies in land that is now considered worthless, or in unfinished projects that will likely never again be resumed. The majority of both are in areas that are a large distance away from major cities. Others are in the nation’s coastal areas.

Residential real estate prices have dropped nearly thirty percent in the last four years, with some regions experiencing drops as high as seventy percent. As the debts associated with the unsellable properties continue to grow, it is unlikely that any bank aside from the major four will be able to cover the losses.

Unless there is major reform or legislation, it is unlikely that the banks will be able to recover from their current state. With unemployment higher in Spain than any other nation in Europe, property transactions continue to drop, and the outlook looks very dim for smaller and mid-sized banks that are struggling to remain afloat.

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Luxury Real Estate Market in Spain Excels While Average Prices Drop

In what appears to be a growing worldwide trend, the prices of luxury properties in the residential real estate market increased in the last month whereas average prices declined by nearly eight percent.

Spain’s largest cities have experienced the greatest decline in average prices, as they fell nearly nine percent. The prices for non-luxury homes along the Mediterranean coast also experienced similar declines.

Not all properties along the Mediterranean coast, however, are struggling. The luxury housing market, particularly those homes right along the sea, are thriving with strong demand and rapidly increasing prices.

The increased demand in the luxury market along the Mediterranean Sea can be attributed to an increase in foreign investors in the country. While overall foreign investment still has not reached levels similar to that during Spain’s real estate peak, it has continued to increase every quarter during the current fiscal year.

Sea-front properties continue to garner significantly higher demand and prices than homes that are even just five to ten minutes away, as tourism and the luxury lifestyle continue to attract the world’s wealthiest investors. Prices of luxury properties, particularly along the coast are expected to continue to rise into the next quarter.

Little has been said as to the expectations of the property market away from the coast. However, a vast improvement, if any, is not expected due to the looming debt crisis in Europe, as well as the threats of an overall worldwide recession. Average prices have decreased throughout the year in Spain’s housing market, and will likely continue to do so in the foreseeable future.

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Spanish Real Estate Market Experiences Gains

Spain’s residential and commercial property markets are finally starting to experience increases in both prices and sales. The nation was hit particularly hard by the global recession, and its real estate market was thus crippled by sharp declines.

However, with tourism once again booming in the country, the real estate market is starting to encounter shortages in the most popular areas. Interest from tourists, as well as those looking to buy a second home in the more popular areas of the nation, has fueled a strong increase in demand.

The summer months have been incredibly kind to the nation, as hotels have experienced one hundred percent occupancy rates. Inquiries on properties in many of the coastal areas have risen by as much as ten percent.

The increased demand has led to bidding wars on properties, which have caused the average home prices to increase more than forty thousand euros in the past year alone.

Foreign investors have largely played a role in the increased demand, and in some areas, they have accounted for more than one hundred residential real estate sales in the past month alone. Even the more expensive properties are being bought up fairly quickly.

Part of the reason for the great success of the Spanish residential real estate market is the influence of government incentives. The government is offering a four percent reduction on homes. Some real estate agencies are matching the government incentive, thus making it possible for buyers to save as much as twenty thousand euros off the purchase of a new home.

 

 

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Spain’s Largest Regions Look to Sell Properties

As Spain continues to deal with its own debt crisis, two of the country’s largest regions are looking to cut its budget deficit but selling off a massive selection of real estate. The two regions, Andalusia and Catalonia, are pushing to sell as much as one and a half billion dollars in the real estate by the year’s end so as to limit property costs.

In order to ensure that sales are made, the two regions are selling off some of their best prime properties. Spain is hoping to avoid falling into a financial situation similar to that which has crippled Greece, Ireland, and Portugal. As such, they are offering their very best with hopes that sales will be finalized, and enough income is generated to reduce the budget deficit.

Some of the properties being offered by Catalonia include the Barcelona Stock Market, and the Catalan Agriculture Ministry. Andalusia has put up for sale the cultural department in Granada, and various youth centers in Malaga. Three companies are handling the sales on behalf of the Spanish government. These three companies include Jones Lang Lasalle, Aguirre Newman, and BNP Paribas.

If there are any doubts that the two Spanish regions will not be able to reach their target sales goal by the end of the year, they may as well be eliminated, as officials are reporting that they have already received more than ten offers to buy the real estate. Each of the ten offers apparently is in excess of the one and a half billion dollars that was established as the sales goal.

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