As per usual, the best one can say about the “news” as to whether now is a good time to invest in real estate is at best confusing, at worst deliberately so. But there are some indicators giving an idea as to when and at what price is a good time to consider re-investing in property. Ignoring the obviously “spun” headlines from the government press release farms such as The Times, these are a few recent, factual articles that might be of interest as it would appear that the commercial real estate bubble is now starting to burst – and as predicted will have an impact on the credit availability in the residential sector.
The European Central Bank began buying Spanish covered bonds last week, which will hopefully prevent the Spanish property market from collapsing this week, but the long term effects are difficult to predict. Clearly the Spanish real estate market is undergoing a massive correction and I am wondering what exactly the effect is likely to be for the smaller investor.
The current pain in Spain´s tourist industry continued in the Canary Islands last month. As tourist arrivals to this key holiday destination and former property investment hot spot continued to drop dramatically. According to new figures just released by the Spanish airport operators AENA.
Aifos, holiday home developer based in Marbella, has been forced into receivership by one of its creditors. One does wonder how they managed to avoid this for so long, and it was the action of a single creditor that forced the issue. Considering the company has studiously managed to avoid handing over any finished properties for years, it comes as no great surprise. Aifos’s many disappointed customers, some of whom made payments as much as 7 years ago and still have no home to show for their payments, will need to act sharply if they wish to avoid losing all hope of recovering their money.
For those selling property in Spain, a recent report brings more doom and gloom to the Spanish markets. With the countryside littered with part-finished developments, and the Spanish government having been snubbed by most world governments recently regarding the recent summits to discuss the “financial crisis,” the news keeps getting worse and worse. What many do not seem to realize or accept is that the Spanish property crisis is almost entirely home grown. Massive over-building combined with extremely lax regulations on developers, estate agents and mortgage brokers caused this crisis, not the world credit crunch. With what appears to be half the local government officials in Spain either already in jail or on the way, it’s about time Spain woke up and smelled the horse manure. Sticking one’s head in the sand and blaming it all on the “credit crunch,” is not going to resolve anything.
Discussion forums can be an excellent way of determining the true state of a market. Unfortunately, many so-called “discussion forums,” are populated almost entirely by real estate agents – and do not give a true picture. One of the research tools we use to sift through the sales pitches when discussing prices are forums. This is a brief list of forums that are populated by genuine people talking about the “for real,” situations they find themselves in. If there is a market I have missed that You are interested in, please drop me a line and I will see if I have one on my collection – Contact IPI.
Following the publication of a book called Photoclima, which shows the potentially devastating effects of global warming on the Spanish coastline, a group of investment property developers in La Manga Del Mar, Spain are suing Greenpeace for 20 million Euros as compensation for causing “prices to plunge by up to 50%.”
More on GreenPeace to Blame for Spanish Property Market Collapse
The market for property for sale in Lanzarote is starting to feel the impact of the mortgage and property crisis in the UK. As figures just released by Spain’s National Institute of Statistics show a sharp fall in mortgage approvals for the first quarter of 2008 in the province of Las Palmas, of which Lanzarote is part.
The ten-year Spanish property boom finally came to an end over 2007, according to figures from Spain’s department of housing (MiV). The 4.8% rise in prices throughout last year may seem like a normal figure compared to other non-booming property markets, but represents a sharp deceleration compared to the powerful rises – of up to 20% – experienced during the boom years.
More on Post-Boom Spanish Real Estate: A Return to Consumer’s Interests
British tourism up 16.7% during January/February 2008
