Spain: Spanish banks lending over 100% again

Spanish Banks are prepared to lend over 100% on their own properties that have been repossessed, it has been revealed.

They are also selling them at rock bottom prices to attract buyers so that they can reduce the amount of property on their books.

According to Adam Cornwell, managing director of Feltrim International these are quality properties in desirable areas.

Recent reports from a leading risk adviser say banks have around €30 billion worth of property that they can’t sell. 
 
‘Whilst Spanish mortgage lending is not expected to recover in 2012 due to high unemployment and limited bank funding, financial institutions have to optimise their balance sheets,’ said Cornwell.

‘To incentivise quality buyers they are prepared to offload these homes at rock bottom prices and with the highest mortgages. If a bank is prepared to lend all of the money, more than 100%, on a project that has fallen to 50% of its value five years previously then it must have the confidence that the market has reached the bottom and that the properties will regain value in the not too distant future,’ he explained.

Examples include a luxury beachside development close to Marbella at 50% off the developer’s 2007 price plus a 110% mortgage option with two years interest only. A one bedroom penthouse in Soto Serena, designed by archtiect Melvin Villarroel, with landscaped gardens, pools, gym and sauna, is available for €184,000 compared with €368,000 in 2007.

‘We are now in a situation where the best units in these marked down resorts are selling fast, just like in the heady days of the property boom when the best off plan units were snapped up fast, albeit now they have the peace of mind of something complete and tangible,’ explained Cornwell.

‘Investors can buy using very little, or none, of their own capital with the risk being entirely taken by the bank. This simply does not happen in any other distressed market in the world,’ he added.

He pointed out that Marbella is regarded as safe a location with excellent infrastructure, licensing issues have been resolved under the new urban plan (PGOU) approved in 2010 and tourists come in a steady stream attracted by more than 70 golf courses, year round sunshine, endless beaches and no frills flights.
  
In 2009 Ryan Air established a base at Málaga Airport and the carrier now operates 39 routes whilst over recent years Delta Airlines has added a direct flight to JFK in the United States, Saudi Arabian Airlines fly direct to Jeddah and Riyadh and Aeroflot has introduced direct flights to Moscow.

On top of that €109 million plan to expand Marbella’s fishing port has been given the green light. The long planned transformation of La Bajadilla into one of the most luxurious marinas on the Mediterranean can now take shape after the Junta de Andalucia, Marbella town hall and the Nasir Bin Abdullah & Sons Consortium signed a contract allowing construction to begin. 
 
The plan, which is expected to take four years to complete, includes a commercial area of 23,000 square meters, a five star hotel and three times the current number of moorings including access for cruise ships and mega yachts.

Source Property wire

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Canada: Vancouver prices drop after early 2011 boom

Vancouver’s property market slowed down in the second half of 2011 after a booming start to the year according to a new report.

The research form the Real Estate Board of Greater Vancouver revealed that prices in the area have dropped 1.5% from June to the end of the year.

However, the overall figure for the year shows that prices for residential properties were up 7.6%.

Rosari Setticasi, president of the Board, said: “2011 started with very strong demand, especially in [Vancouver's] west side, Richmond and West Vancouver, but then it peaked in June and closed the year with greater balance between sellers' supply and buyers' demand."

"[Prices] dropped about 1.5% June to the end of the year. But overall, the benchmark price for all residential properties increased 7.6 per cent for the year."

The average price for a home in the area is now $621,674, with the Port Moody area seeing the largest increase in its benchmark price, rising by 34% to $933,000.

The total number of transactions of residential properties in 2011 rose 5.9% year on year to 32,390, added the Greater Vancouver board. However, this figure was stil 9.2% down on the 35,669 homes sold in 2009.

The slowdown in Vancouver real estate price growth is expected to continue according to Robyn Adamache, a senior market analyst at Canada Mortgage and Housing Corp.

“We’re expecting much less price growth this year compared to 2011,” Adamache said. “We’re calling for about a two-to-three per cent increase in price growth in 2012, close to the rate of inflation.”

Tsur Somerville, director of the centre for urban economics and real estate at the Sauder School of Business, University of British Columbia, said that confidence levels in the worldwide economy will also affect Vancouver’s 2012, as will reduced levels of investments from China.

“My sense is that flat or little growth [in prices] is likely,” he said.

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Spain: Theme park reassurance in Murcia

Murcia Mayor's assurances on Paramount please agents
06 January 2012 12:25

Overseas property agents have welcomed a statement by the Mayor of Alhama de Murcia saying that “there is no going back for the Paramount Theme Park” in Murcia and that the project has investors in place. 

Local estate agent Mercers hopes that the Mayor’s “reassuring words” will silence the Paramount “doubters”.

Another encouraging sign has been the move by Proyectos Emblematicos Murcianos SA (PREMURSA), the promoter behind the Park, to officially announced that it will purchase the land destined for the project at a cost of €15.8 million on 6 February 2012. 

Investors details will be revealed on the purchase day and, according to Chris Mercer, director of Mercers, “if PREMURSA has officially stated its intent to spend almost €16 million next month, we can be confident that they have the backing to proceed. Otherwise, €16 million for what is essentially a rather unremarkable piece of land would be a seriously expensive error.”

The land in question is in Alhama de Murcia and extends to just over 1.8 million sqm of which just under 0.8 million sqm will be used for the Theme Park itself and just over 1.03 million sqm for a “Lifestyle Centre.” This will include seven hotels, restaurants, bars, nightclubs and a business district with modern office space, an auditorium and convention centre.

The Paramount-branded Theme Park plan was unveiled in Madrid in October of last year and will require an investment of more than €1 billion and create about 22,600 construction and operational jobs. It hopes to attract more than 3 million visitors each year from around the world.

Source OPP

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Spain: Foreign investment in property up 27.8% upto September

Foreign investment in Spanish real estate surged 27.8% to September, over the same period in 2010. In total, these transactions amounted to 3,601 million euros, which is a significant rise compared to the slight increase of 2.6% in 2010, according to the Bank of Spain.

In addition, El Mundo reported that these investments exceeded 1,000 million euros for three consecutive quarters, a statistic which has not occurred since 2008, before the real estate bubble burst. In the third quarter, the increase in property purchases was 19.2% over the same period of 2010, amounting to 1,164 million euros.

Foreign investment in Spanish property has fallen progressively since 2003, when it reached 7,072 million euros, to 6,650 million euros in 2004, 5,495 million in 2005 and, finally, to 4,716 million in 2006.

However, this downward trend was corrected in 2007, with foreign investors spending 5,341 million euros on housing, representing a 13.3% increase over 2006.

Added to this was 5,331 million euros in direct foreign investment in Spain until the end of 2008, which is an increase of 1% over the same period in 2007. In 2009 these investments fell by 31.5% to 3,651 million euros due to the construction crisis, while in 2010 they grew again by 2.6% to 3,747 million euros.

As for Spanish investments in real estate abroad, these fell by 38% to September compared to the same period in 2010, and by a further 17.4% at the end of 2010. Furthermore, in the third quarter alone these investments stood at 155 million euros, which represented a decrease of 17.5% over the same months of 2010.

Foreign investments in public administrations and other resident sectors, excluding the Bank of Spain, grew gradually over the four years from 2003, from 388 million euros in that year to 781 million in 2004, 1,510 million in 2005, 2,269 million in 2006 and 3,365 million in 2007.

However, the upward trend was curtailed in 2008, during the economic crisis, with these investments falling to 1,789 million euros, which was a drop of 46.8% from a year earlier, and a trend that continued in 2009, with a decrease of 44.9%, and property purchases abroad in 2010 again falling by 17.4% to 814 million euros.

Source Kyero

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