So 2008 ends with the Spanish property market in a bit of a rut. Hopefully 2009 will be the time when you realise yur dream if you want to live in Spain as banks start lending again and new businesses sprout up everywhere to react to the economic situation.
So Happy New year from Valencia Property and we hope that it turns out to be your best one yet.
Wednesday, December 31, 2008
Tuesday, December 30, 2008
Is the bottom of the housing pyramid stable? Here it might well be.
So how far will prices fall in the housing market? Estimates of the UK market this year vary but about 15% would seem to be the average. However where is the bottoming out point of house prices in the UK and elsewhere? As prices fall the possibility for first time buyers to get into owning a property grows and surely this means that at some point the demand outstrips supply and prices bottom out and maybe even start rising again. The issue at the moment would sem to be lack of lending by the banks and building societies rather than lack of real demand, nobody can get a mortgage.
Anyway in Spain and, more particularly for me and this blog Valencia, the government is going to force lenders to do just that, lend, very soon. So it is possible to look at a potential bottoming out of the market in the following way. The average Spanish person earns around 1500 Euros per month and when both partners in a couple earn that, then they have 3000 Euros income with which to play with at the bank. The banks will use around 1000 Euros per month as a rule of thumb for repayments. At an interest rate of 4% which will be in place by about March time this would mean repayments on a loan of some 200k would come in at around 958 Euros pcm over 30 years on a repayment mortgage. Therefore we can surmise that any property under 200k has the potential to be bought by these new first time buyers and properties around the 100k mark can be bought by those average wage single people who are looking to buy. So has Spain reached the bottom? Well there are a few other factors to consider but bear in mind that the cheaper areas of Valencia are now seeing properties in the 100k mark and other provincial capitals the same and there is a good possibility that it may have in the cities where demand is still good. However the negatives that need to be sorted are as follows;
1) The banks will only give up to 80% of price.Therefore people need to have saved 20% plus costs of purchase or have, more usually, a family member who can supply them with it.
2) You need to jump through a lot of hoops to get funding at the moment.
3) Interest rates at 4% may well drop in the short term but be aware that if they went up to 6% where they were a few months back then repayments would be 230 Euros pcm more (More or less)
4) Oversupply of rubbish on the coasts.
The good news is that buying BMV property in Spain now and renting it out will give a really good return if you can get the mortgage as an interest only loan on a property at 100k will cost about 350 Euros pcm and return some 550-600 Euros in rental. (Remember I am talking about cities not the coast)
For any advice regarding your mortgage or investing in Spain then get in touch with me. We may be able to get you a much better deal than you would otherwise be offered. And remember also that the lifestyle here and the cost of living is certainly cheaper than the UK or many other areas despite the drop in value of the pound.
Anyway in Spain and, more particularly for me and this blog Valencia, the government is going to force lenders to do just that, lend, very soon. So it is possible to look at a potential bottoming out of the market in the following way. The average Spanish person earns around 1500 Euros per month and when both partners in a couple earn that, then they have 3000 Euros income with which to play with at the bank. The banks will use around 1000 Euros per month as a rule of thumb for repayments. At an interest rate of 4% which will be in place by about March time this would mean repayments on a loan of some 200k would come in at around 958 Euros pcm over 30 years on a repayment mortgage. Therefore we can surmise that any property under 200k has the potential to be bought by these new first time buyers and properties around the 100k mark can be bought by those average wage single people who are looking to buy. So has Spain reached the bottom? Well there are a few other factors to consider but bear in mind that the cheaper areas of Valencia are now seeing properties in the 100k mark and other provincial capitals the same and there is a good possibility that it may have in the cities where demand is still good. However the negatives that need to be sorted are as follows;
1) The banks will only give up to 80% of price.Therefore people need to have saved 20% plus costs of purchase or have, more usually, a family member who can supply them with it.
2) You need to jump through a lot of hoops to get funding at the moment.
3) Interest rates at 4% may well drop in the short term but be aware that if they went up to 6% where they were a few months back then repayments would be 230 Euros pcm more (More or less)
4) Oversupply of rubbish on the coasts.
The good news is that buying BMV property in Spain now and renting it out will give a really good return if you can get the mortgage as an interest only loan on a property at 100k will cost about 350 Euros pcm and return some 550-600 Euros in rental. (Remember I am talking about cities not the coast)
For any advice regarding your mortgage or investing in Spain then get in touch with me. We may be able to get you a much better deal than you would otherwise be offered. And remember also that the lifestyle here and the cost of living is certainly cheaper than the UK or many other areas despite the drop in value of the pound.
Monday, December 29, 2008
Waiting for the right exchange rate
So many people getting in touch at the moment wanting to rent with an option to buy. Why? Well as mentioned in my last blog entry about the imperfect storm enveloping the market why buy if you are coming here from the UK when you can wait and maybe the pound will recover some of the lost ground and get back toards where it was earlier in the year, around 1.27 Euros to 1.30 Euros to the Pound? Now there is no guarantee it will although many "experts" feel that is where the sensible point is. However, the likelihood is that as soon as parity with the Euro is reached then hedge funds and speculators will stop betting against the pound as they have been doing and shift the momentum in the opposite direction.
Therefore we are getting more possiblities for renting into the site and some of the for sale houses are also available for rent. Get in touch and ask for more info on info@valencia-property.com if you are unsure. Six month option contracts are becoming more and more prevalent. Make sure your contract protects your rights and gives you the right to buy without being gazumped when the right time to buy turns up.
Therefore we are getting more possiblities for renting into the site and some of the for sale houses are also available for rent. Get in touch and ask for more info on info@valencia-property.com if you are unsure. Six month option contracts are becoming more and more prevalent. Make sure your contract protects your rights and gives you the right to buy without being gazumped when the right time to buy turns up.
Tuesday, December 23, 2008
The Imperfect Storm
The market is a tad moribund at the moment. An imperfect storm is brewing. The reasons are as follows
1) Sterling has dropped from 1.47 to 1.06 Euros in just over a year.
2) Interest rates hit a peak of just over 5.7% in August meaning the revisions of peoples' mortgages were fixed for a year at 6.7%
3) Point 2 doesn't matter as banks are still not lending
4) Prices are falling so people generally will wait.
5) The UK market is moribund so people who want to buy cannot sell their place.
6) People believe fallacies like those reported by Trevor MacDonald and the Daily Mail.
7) Recession means that jobs are being shed just like the UK.
So in order to give you a reason to buy here we need to point out the lifestyle advantages, the excellent possibilities for starting up solid businesses, the cost of living which is still much lower than in the UK, the social factors affecting your life here, the availability of rentals with an option to purchase further down the line, possibly when sterling rebounds, and finally the fact that our prices are already dropped markedly, especially those being sold by English speaking clients because if they are selling to repatriate the money back to the UK they have dropped the price a lot so that for you in pounds it costs no more. Ask me for more info.
1) Sterling has dropped from 1.47 to 1.06 Euros in just over a year.
2) Interest rates hit a peak of just over 5.7% in August meaning the revisions of peoples' mortgages were fixed for a year at 6.7%
3) Point 2 doesn't matter as banks are still not lending
4) Prices are falling so people generally will wait.
5) The UK market is moribund so people who want to buy cannot sell their place.
6) People believe fallacies like those reported by Trevor MacDonald and the Daily Mail.
7) Recession means that jobs are being shed just like the UK.
So in order to give you a reason to buy here we need to point out the lifestyle advantages, the excellent possibilities for starting up solid businesses, the cost of living which is still much lower than in the UK, the social factors affecting your life here, the availability of rentals with an option to purchase further down the line, possibly when sterling rebounds, and finally the fact that our prices are already dropped markedly, especially those being sold by English speaking clients because if they are selling to repatriate the money back to the UK they have dropped the price a lot so that for you in pounds it costs no more. Ask me for more info.
Sunday, December 14, 2008
Last real week of work
I am currently laid up a bit, relying on public transport to get me round with the broken collarbone, and yes I know I am too old to be playing football especially for everyone who has told me, but I will be back. Anyway, I have just had a realization. This is the last week before Xmas in effect because schools finish on Friday and from then everything slows down in Spain until after Kings' Day on the 6th of January. So if you need anything doing here make sure it is arranged this week because otherwise it might be a long time before it gets done. Meanwhile Skype me on grahamvp or ring me on +34 961662892 if you want anything because I will definitely be out and about this week trying to get my stuff out of the way.
Friday, December 05, 2008
200th Post so More Good News
Thanks to my friend Robert Burns for the info. If you have a pension you want transferred outside of the UK he can help you.
Despite all the bad news we are still seeing investment and infrastructure projects into the Valencia Region. Recent announcements include:
# The Alicante Trade Fair (IFA) is to invest 360m euros including a new multi purpose sports and events pavilion.
# The opening of a "Short Sea" connection between Valencia and Sardinia. Expected 25 percent increase in traffic between Spain and Italy.
# Hits Mobile jointly owned by a Kuwaiti Group and Metrored from Valencia are setting up a base in Valencia to target international mobile calls.
And if you want a Hits phone to get cheap phone calls to the UK and elsewhere then sign up with me here and I will get back to you
# Molino Real are to donate 15m euros for the rehabilitation of the Paterna area of Valencia.
And finally, to quote the Chamber of Commerce, the Air Cargo Center in Manises Airport "is a strategic area for multimodal transport since Valencia is situated in a privileged location in the Mediterranean Rim."
It's the place to be...the Generalitat de Valencia.
Oh and Valencia are in the Champions League places and the new stadium is moving along nicely now.
Despite all the bad news we are still seeing investment and infrastructure projects into the Valencia Region. Recent announcements include:
# The Alicante Trade Fair (IFA) is to invest 360m euros including a new multi purpose sports and events pavilion.
# The opening of a "Short Sea" connection between Valencia and Sardinia. Expected 25 percent increase in traffic between Spain and Italy.
# Hits Mobile jointly owned by a Kuwaiti Group and Metrored from Valencia are setting up a base in Valencia to target international mobile calls.
And if you want a Hits phone to get cheap phone calls to the UK and elsewhere then sign up with me here and I will get back to you
# Molino Real are to donate 15m euros for the rehabilitation of the Paterna area of Valencia.
And finally, to quote the Chamber of Commerce, the Air Cargo Center in Manises Airport "is a strategic area for multimodal transport since Valencia is situated in a privileged location in the Mediterranean Rim."
It's the place to be...the Generalitat de Valencia.
Oh and Valencia are in the Champions League places and the new stadium is moving along nicely now.
Do you want to reduce your mortgage payments?
If you are following the updates here and on our other sites you may already know that we have been negotiating for clients who want to reduce their mortgage payments with their banks. This is being very successful and we have currently reduced mortgage repayments for people between 500 and 1400 Euros per month for times ranging from 2-3 years. If you want us to get you a better deal on your mortgage in Spain then for a fixed fee we can get you a much better deal and take that pressure off you.
Tuesday, December 02, 2008
Free online gaming and then more
http://www.liverbird1.gemisland.com
If you go to the above site and register then you can soon start playing some cool free games as the site rolls out. It is on online gaming, shopping mall and gambling site that will have all sorts of opportunities for future development. We are currently looking at many options for things to put into the island. So have a look, register for free and tell us what you think of the site. (and if you want to become an associate then sign up on that too and promote this business to your friends.)
If you want a Spanish mobile phone that allows you to phone abroad for costs often less than half the price of the big three in Spain then this is for you too but get in touch with me first as it is still under construction.
We hope soon for you to be able to advertise your property on there to a potential worldwide audience of millions for just pennies.
If you go to the above site and register then you can soon start playing some cool free games as the site rolls out. It is on online gaming, shopping mall and gambling site that will have all sorts of opportunities for future development. We are currently looking at many options for things to put into the island. So have a look, register for free and tell us what you think of the site. (and if you want to become an associate then sign up on that too and promote this business to your friends.)
If you want a Spanish mobile phone that allows you to phone abroad for costs often less than half the price of the big three in Spain then this is for you too but get in touch with me first as it is still under construction.
We hope soon for you to be able to advertise your property on there to a potential worldwide audience of millions for just pennies.
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