December Investment Property Watch

Posted by Catherine Deshayes on Wednesday, January 13, 2010

Old favourite Spain overtook the USA in December's Investment Property watch chart - which tracks the level of interest in certain properties and countries from visitors to the site - and not content with nabbing just one place, Spain took a whopping four spots in the top ten - so let's check out what 2010 holds for the holiday hotspot...

Spain

Few countries have generated as many column inches as Spain over the years - the country has long been a hotpot for holidaymakers from all over the world, along with retirees, second home buyers and those chasing a more permanent life in the sun. So let's take a look at what the property industry predicts lies in store for the land of sun, sand and sangria in 2010.

The International Property Journal ran a comment from Mark Stucklin, analyst at  SpanishPropertyInsight.com, who suggested ‘The big news won't be a big rebound in the Spanish property market, because that's not going to happen.

"However there will be some great deals on prime Spanish property to be had during 2010, for those who can be bothered to do their homework and have funds in place. It will go largely unnoticed but some people will do very well."

Martin Dell, director, Kyero.com, Spain predicted that "The differing pace of economic recovery between nations will create opportunities for buyers and sellers.

"In Europe, the stronger German, French and Dutch economies will enable buyers from those nations to seek and aggressively negotiate property deals in the slower-to-recover European countries--Portugal, Italy, Ireland, Greece and Spain.

"Even though there is no currency exchange advantage for these buyers, the Euro will buy a lot more property in these PIIGS countries in 2010 compared to 2009," he added.

Smart New Homes predicted a tentative recovery for Spain. "The new homes market in Spain is showing tentative signs of recovery, according to the G-14 group of top Spanish property developers.

"Pedro Perez, head of the G-14 was quoted as saying on Spanish Property Insight that the sales of new homes in Spain will continue "consolidating in the coming months".

"However, there is a chance that Perez's comments are merely "wishful thinking by [Spanish property] developers desperate for the market to start mopping up the glut of properties they created", says Mark Stucklin of Spanish Property Insight.

"Nevertheless, "there is some basis for the developer's optimism in the latest sales figures from the National Institute of Statistics", adds Stucklin.

"The latest data released by the National Institute of Statistics reveals that sales of newly built properties in Spain increased by 7.6% from August to September, but remain down 20% year-on-year.

"It's been comforting to see sales rise for the fifth consecutive month, something that means we can say that the sector is recovering since it touched bottom in April."

"Spain property developers argue that sales on new homes in Spain are increasing thanks to lower prices and a greater range of mortgage loans on offer.

Property Community says, "The decline in Spanish property prices is slowing, according to the latest published index but banks who own a massive amount of repossessed real estate could depress values in 2010 when they dump them on the market.

"The latest Tinsa property price index for November shows that average prices fell by 6.6% over the last 12 months, down from 7.4% last month. But many in the industry point out that the index does not reflect what is actually happening on the ground as it is based on valuations, not actual transaction prices.

"Analysts are warning that 2010 could see a large number of cheap properties coming onto the market. Banks in Spain, now the country's biggest property owners having re-possessed so many homes, will have to offer discounts of up to 50% in 2010 if they are to shift their stock of real estate, according to a new report.

"Current discounts are simply not big enough to interest buyers, says the report from BNP Paribas Real Estate, the real estate arm of French bank BNP Paribas.

"The prediction comes as analysts point out that it could take years for the Spanish property market to recover. According to Acuna & Asociados, highly regarded Madrid real estate analysts, it could take six or seven years just to clear the huge numbers of empty homes that won't sell.

"The firm's annual report indicates there are 1.67 million properties for sale in Spain including 500,000 new builds, 500,000 resales and the rest are buildings that have yet to be completed.

"Indeed, the latest report from BBVA, Spain's second largest bank, also indicates that a recovery will be slow and drawn out over several years. It says that Spanish property prices were 30% over-valued but have only fallen 10% so far and they need to fall another 20% before reaching bottom.

"It predicts that prices will fall by 7% this year, 8% next year, and 5% in 2012 when they will start to stabilize. The biggest price falls will be in the coastal areas where the most building has taken place in recent years. This includes around Madrid and coastal regions such as Malaga, Castellon and Tarragona, the bank says. They are likely to fall the least in Orense, Navarra and The Balearics.

"Rising unemployment is hampering a recovery. It is set to rise to 22% next and as more people lose their jobs, more properties come onto the market. Other experts are also saying that prices have not yet fallen enough. According to Luis Garicano, Professor of Economics and Strategy at the London School of Economics (LSE), prices are down very little compared with other countries like the US where they have dropped 50% from peak."

Other movers and shakers

The USA was forced out of first position in December's chart by Spain. Thailand took second place, followed by October's winner America. November's silver medal winner Brazil had to make do with fourth place in December's chart, followed by another appearance by Thailand in fifth place.

The topic of our story this month showed up again in six place, chased by the land of lad dolce vita - Italy - in lucky number seventh place. Brazil took eighth, a spot held by the USA in November's chart.

Finishing strongly and rounding off last month's chart was Spain in both ninth and tenth places.

Table showing December's top investment properties

Features Archive Show Full Table

 

Check out homes for sale in Spain at http://spain.themovechannel.com/

 Picture of Seville by 17noviembre

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