The European Commission today approved the holding of five Spanish train corridors included in the design of the trans-European network should be operational by 2030. The Mediterranean Corridor, which originally included the province of Malaga, now appears to go from Almeria and Sevilla across the north of Andalucia to Antequera / Bobadilla.

The Mediterranean corridor, with an investment of 19,424 million euros, and is constituted as a multi-use corridor, both road and rail, which connect the French border to the main transport nodes in four regions of Spain along the Mediterranean Coast.

This set of infrastructure projects will connect the French border with Algeciras, via Barcelona, Valencia, Cartagena and Almeria, and will have a transverse axis between Granada and Antequera, where it forks to finish in Seville. All major ports along the mediterrean will connect to the new network (Barcelona, Tarragona, Castellón, Sagunto, Valencia, Alicante, Cartagena, Almeria, Malaga and Algeciras, etc.) and will feature the development of the Guadalquivir river corridor to the port of Sevilla

Along the Mediterranean Corridor, the European Commission has also approved the Central Corridor, the Atlantic Cantabrian-Mediterranean Corridor and the Atlantic Mediterranean Corridor. With these investments, Spain will get to perform the necessary infrastructure works to achieve a comprehensive network for both passenger and freight transport.

In all, Spain will invest 49,800 million euros between 2014-2020, in carrying out the works.

Development sources have indicated that this investment will take place under the state budget will mean an average cost of 7,000 million euros annually, which must be added between 10 and 20% of 31,700 million euros that contribute to a Europe-wide European Funds.

Spanish Article: Diario Sur

Home sales in June were the lowest since the property crash began, show the latest figures from the Statistics Institute (INE).

There were 24,699 home sales in June (excluding social housing), down 26pc on the same time last year, below even June 2009, when the crash was thought to be at its nadir. The graph above makes it clear that, after a deceptively promising start, 2011 (in red) is turning out to be the worst year yet.

Compared to June 2007, sales were down 60pc – a teeth-jarring fall by any measure.

Year-to-date, transactions are down 11pc compared to last year, 3pc compared to 2009, and 55pc compared to 2007, as illustrated by this table.

On an annualised basis, sales have fallen in 10 of the last 12 months.

Assuming that prices have fallen by an average of 30pc since 2007, then in value terms (Euros) the market has shrunk by 70pc since then. That means 70pc less money around for everyone who lived off the housing market, town halls in particular.

All this helps explain why many town halls are now in the jaws of a financial crisis: They ramped up their spending and overheads during the boom, assuming it would last for ever, but now the money has dried up and they can’t afford to pay their bills. A 70pc fall in revenues from real estate helps explain why.

Why are transactions still falling? Partly because the credit crunch is still in full swing – in Spain at least – and partly because the abolition of mortgage tax relief at the end of last year brought forward sales that might otherwise have taken place in the first half of this year. So the figures might make the market look worse than it actually is. To find out we will have to wait and see if there is a recovery in the second half of the year.

The following table summarises the key transaction data month-by-month for the last 5 years.

Article by Mark Stucklin

Source: Spanishpropertyinsight

Monthly, annually, whichever way you look at it, the Spanish property market had a good month in August (at least by recent standards).

The Spanish property market grew robustly in August, according to the latest figures from the National Institute of Statistics (INE).

Excluding social housing, there were 39,250 house sales in August, up 1pc on July and 26.6pc on the same month last year.
As you can see from the chart above, the market is clearly recovering from a bottom last year, and the second half of the year could be the best since 2007.
In particular, resale properties had a good month in August, with sale up 34pc compared to last year. New build sales were up by a quarter.

The following table shows sales and rates of change in the year to August over the last 4 years.

Despite growth of 12pc this year, the market is still 24pc smaller by transactions than 2008, and 45pc smaller than 2007.

Assume that prices have fallen 20% since 2007, and that means the market is down 56pc by value compared to 2007. August may have been a good month for sales by recent standards, but the Spanish property market is still worth less than half what it was just 3 years ago. That has big implications for the Spanish economy.

And finally, the following table shows you the change in selected regional markets in the year to date. Barcelona is doing best, up 44pc on the same period last year, and Las Palmas in The Canary Islands is doing worst, down 15pc.

Source: Spanishpropertyinsight.com

There are plenty of variations on the theme. But the general argument goes like this: “We live on a small island, our population is growing, and there just aren’t enough houses to go around.”

And the rebound seen in the market last year simply seems to confirm this view. There aren’t enough houses – so you can’t go wrong with bricks and mortar.

The bulls have got it right in one sense. House prices are indeed all about supply and demand. But it’s supply and demand for credit, not houses.

If you want the proof, just look at Spain…

What’s propping up Spanish house prices?

Spain has had a horrendous recession. It’s on the infamous “PIIGS” list of threatened peripheral eurozone countries. It has unemployment of around 20%. And there are myriad horror stories of Britons who bought property in the country only to find that their homes were subject to legal disputes, or simply that their pensions couldn’t sustain them when the pound slumped against the euro.

And yet, just as we’ve seen in the UK, the market seems to have managed to take the strain. In the second quarter of 2010, Spanish property rose by nearly 25% to just under 150,000, according to the Housing Ministry. The rise was driven mainly by growth in “second-hand” home sales – up nearly 50% on the quarter, compared to just a 4.6% rise for new home sales.

That may sound impressive. However, sales are nowhere near their bubble-era peak, when figures would have been more like double that. Yet, the toll on house prices hasn’t reflected this. As Fiona Maharg-Bravo puts it on Breakingviews.com, “the Spanish housing bubble isn’t in a hurry to deflate. Prices have held up and are now just 12% off their 2008 peak.” That’s comparable to Britain – if you use Nationwide figures, we’re around 10% off the 2007 peak price for the average British home (and closer to 16% if you look at Halifax).

Yet there are estimated to be about a million empty new-build homes in Spain. Says the FT, “most experts say it could take another three to four years to absorb surplus stock.” And that’s despite a collapse in the number of homes being built, from 800,000 in 2006 to fewer than 100,000 this year.

So what’s behind the surprising resilience of Spanish prices, if not a physical shortage of property? Obviously there are pockets where things are worse – all those horror stories from expats having to sell at huge discounts, for example.

But by and large, what’s propped up prices in Spain is the same as what saved the British property market from harder falls – interest rates being slashed.

Source: www.moneyweek.com

Seven out of ten Britons who have retired abroad are happy with their new country and likely to stay there, a survey said yesterday.

Fewer than one in five who have gone to live in France, Portugal or Spain are considering returning home, it found.

The poll also found that nine out of ten of expat retirees live among the natives of their adopted country rather than among fellow Britons in communities of exiles.

The survey, carried out for NatWest bank, suggested that the trick to a happy retirement overseas may be planning ahead.

The highest levels of satisfaction were found among those who were employed in their new country before giving up work.

Among those in Australia, New Zealand, Canada and the U.S. who worked in their chosen country before retiring, fewer than one in ten thought they might go back to Britain.

Nearly 150,000 British citizens left the country last year to live abroad, many of them after giving up work.

According to the survey, there are now an estimated 900,000 expat pensioners, with nearly 300,000 in Australia, 115,000 in Spain and just under 75,000 in France.

Dave Isley, from NatWest International Personal Banking, said: ‘Retiring abroad is still very much a popular choice and expats are happy with their chosen life paths.

It’s encouraging to see that the majority of expats believe they made the right decision in retiring abroad and are living their chosen dream. It is enlightening that 92 per cent of expats chose not to retire to a designated expat community.

‘This seems to emphasise the notion that expats have retained a sense of adventure.

They really do want to start afresh and experience life as a local rather than settle with other expats.

‘By immersing themselves in a full, enriched life as a local, retired expats can certainly learn and gain more from their time abroad.’

The survey also revealed that nearly six out of ten retirees abroad feel their experience has been better than they expected.

Only one in ten said retirement in a foreign country had proved worse than they thought it would be.

Among expat pensioners in France, Spain and Portugal, who mainly left Britain after they retired, just 16 per cent thought they might return.

The survey was carried out by the Centre for Future Studies among 1,300 retirees.

Source:  Daily Mail

But whilst the number of appraisals fell by just 4%, property values contained in those appraisals fell by an average of 17%.

Taken over 3 years, the number of property appraisals has fallen 41%, and valuations by 34%, giving us some idea of how far Spanish property values have fallen since the property bubble burst.

It is interesting to note that signs of a slow down first showed up in the valuations data as far back as 2006, falling significantly in 2007 and 2008, and showing signs of bottoming out in 2009.

Source: spanishpropertyinsight

According to research from property website Primelocation, internet searches in Britain for property abroad are at a record high, up over 100 per cent from this time last year.

Data from the company’s international search index shows that searches for property in Spain increased the most. Last month, there was a 151 per cent increase in searches compared to June 2009, and the country accounted for nearly a third of searches overall.

Despite a potential rise in capital gains tax and a precarious economic situation in southern Europe, investors appear to be taking a long term view on the market, while hoping, in the short term, to take advantage of a weaker euro.

Ann Wright, International Development Manager of Primelocation International, said: “While the market in Spain has suffered from some bad publicity recently, there has been no significant drop in the number of people searching for property in the country on Primelocation International.

“The fact remains that there are many reasons why the country remains attractive to British buyers. Spain’s main attractions are still the warm climate, great beaches and unique culture all just a short flight from the UK; these factors will still draw in international buyers whatever the economic situation.

“It is also worth remembering that, while most of the problems experienced in recent years have centred on the Costas, there is far more to the Spain than just the southern coast.”

Following Spain came France, the U.S, Portugal and Italy. Searches for property in the U.S increased by nearly 200 per cent on last year’s figures.

The upturn in international property searching contrasts sharply with the volatility experienced during the banking crisis in the late summer of 2007 when searches fell by 38.5 per cent between July and August.

Primelocation also revealed a third of all those considering buying property abroad are looking to emigrate permanently. By contrast, only 23.7 per cent of the 1,500 investors questioned were looking for an overseas holiday home and only 12.4 per cent were searching for an investment property. A further 15.3 per cent were foreign buyers looking to purchase a UK property.

Source: Telegraph

84% of Spaniards think that vendors are still asking too much, and more than half think prices will fall around 10.5% this year.

Compared to the last time this survey was carried out, however, the general perception of value for money has improved. In 2005, 95% of Spanish property hunters thought property prices were over-valued by between 30% and 50%.

“There is still a perception that prices are over-valued, although less so, probably as a result of official prices falling for 2 years,” explains real estate expert Prof. José García Montalvo in the report from FUNCAS.

Is now a good time to buy? Spanish house-hunters are divided. 55.5% say yes “fundamentally because of low interest rates,” whilst 44.5% say no. So the current and former Ministers for Housing are not the only ones who can’t agree if now is a good time to buy property in Spain.

The survey by FUNCAS also reveals that most house-hunters think it will take the market 7&1/2 years to recover fully, though a significant minority are optimistic a recovery will happen much sooner.

Orginal article: Spanish property insight

“The newly built property market is already in its fourth year of adjustment and now it the time for change and for the financing of buyers and promoters” he added.

He believes now is the time to start building again as in many cases prices have already dropped between 20 and 30%. And even with the still over supply of properties now is when new construction needs to be stimulated. Prices may continue to drop in certain areas due to lack of demand and over supply, but in many others there will be shortages soon.

According to the INE (Spain’s institute of Statistics), sales of residential properties rose by 17.6% in April and that it appears that at least on a national level there may be a recovery in the market. Of course, whether this continues once the new VAT levels are implemented on the 1^st of July is yet to be seen.

Furthermore the end of mortgage deductions in 2011 has helped stimulate the market this year and that in 2011 the property market will be more dependent on the current restructuring taking place in Spain. From the consolidation of Spain’s saving banks to the new employment laws.

It should also be noted that although there are positive trends in the levels of property sales, they are still only a third of the transactions from the ‘boom’ years.

Regards
Andrew Bellés

Spain said Wednesday it would invest euro17 billion ($23 billion) in a rail and road project over the next two years in an effort to boost its recession-hit economy and create jobs.

Prime Minister Jose Luis Rodriguez Zapatero said 70 percent of the investment would go toward new passenger and freight rail projects, as well as improvements of the existing network. The remaining 30 percent will be dedicated to highway construction and maintenance.

He said the plan would not affect Spain’s coffers for the moment as it would be financed initially by the companies contracted with funds from state credit institutions and private banks.

Zapatero said Spain would begin paying the companies back after 2014 by means of a new tax on users once the projects are finalized and functioning.

“This is the most important collaboration between the public and private sector in the history of our country,” said Zapatero.

The Development Ministry said the plan was designed so that it would not interfere with the government’s pledge to reduce its deficit from 11.2 percent of GDP to 3 percent by 2013, as demanded by the European Union.

Spain, with unemployment at an EU high of 18.8 percent, is desperately searching for ways to create new jobs and boost its economy following the collapse of its construction sector and the effects of the international financial crisis in recent years.

Source: Business Week

But villas and apartments on the Spanish Costas are suddenly hot property again as Britain’s second-home buyers rediscover the attractions of life in southern Spain.

Fresh from a chilly, dismal winter, drawn by falling prices and apparently undaunted by the low sterling-euro exchange rate, a new generation of would-be buyers has descended on Spain, according to the Spanish division of Taylor Wimpey.

Typical holiday home buyers are no longer “stereotype retirees”, the UK’s biggest house builder said. Instead, executives with families who spend an average of 60 days a year in Spain have emerged as the dominant British buyers in a region that enjoyed huge popularity during the credit-fuelled boom years.

Since then, the most oversupplied holiday apartments in Spain have suffered price falls of about 50 per cent. Properties in Palma and Mallorca were among the world’s biggest fallers last year, sliding by 22 per cent and 17 per cent, respectively, according to Knight Frank, the estate agent.

Perhaps in search of a bargain, Rightmove Overseas, the website, said that the number of searches had risen by 60 per cent compared with March last year. Portugal was its most popular search among buyers of holiday homes, it said.

Primelocation.com reported a rise in searches for international property of 72 per cent between February 2009 and 2010, with France recording the biggest annual rise of 113 per cent. Spain remained the most popular country, accounting for 32 per cent of all searches, compared with 29 per cent for France.

Savills’ office in Sotogrande, Andalucia, also said there had been a rise in inquiries from British buyers, even if many were still reluctant to commit to a purchase. James Stewart, head of the division, said: “Prices are coming back for traditional-quality properties but not in the more credit-squeezed areas. Trading is still slow but people are once again having a good look.”

Taylor Wimpey, which has offered discounts of about 30 per cent on some properties, said that 75 per cent of buyers of its apartments, which cost about €200,000 for a two-bedroom flat, were executives aged between 35 and 50 with children. Interest had been strongest in the Costa del Sol, particularly in and around Marbella, as well as the Balearic islands. The group sold one third of its newest development, just outside Marbella, offplan within a month of launching the scheme, a performance that it said was “significantly ahead of expectations”.

A spokesman for Taylor Wimpey, which began developing in Marbella for the first time in three years last month, said: “Marbella is like the South East of England rather than Salford. It was not a volume market and didn’t suffer the same over-development as other areas. Prices, therefore, did not fall as much as in other parts of Spain.” Interest in apartments in the Costa Brava in towns such as Alicante, where oversupply is a bigger problem, had been slower to pick-up.

Revenue at Taylor Wimpey España was largely flat between 2008 and 2009, at £59.8 million and £61 million, respectively, but the division made a narrower operating loss last year, at £1.4 million, compared with £2.4 million in 2008.

‘I LIKE THE WEATHER AND THE LIFESTYLE’

Derek Parrott bought his holiday home in Marbella last July as the pound slumped towards parity with the euro and Britain was in the thick of recession.

But the 61-year-old managing director of a construction company knew that with prices down by 30 or 40 per cent in Spain, there was a deal to be done — and besides, he said, he bought his three-bedroom, €270,000 apartment for the lifestyle, not as an investment.

“I just wanted to spend time there,” he said. “I like the weather and I like the lifestyle. The exchange rate did make me think twice and I went in knowing that prices will now at best remain flat for a while.”

Mr Parrott and his wife have already visited their new holiday home in Los Robles de Los Arqueros half a dozen times and plan to go six or seven times a year. “I particularly like this area. We watched the development go up and I know it has been done properly and is managed properly.

“It is not a development from hell, like you see on the television programmes.”

Times online

So what happened? Well, figures for January from the INE show that, excluding social housing, there were exactly 34,000 sales in January, up 1.4% over 12 months. A year-on-year increase of 1.4% is no big deal, but it’s a much needed respite when it is the first time in 3 years that the market has actually grown, as you can see from the chart above. And it’s difficult to dismiss it as a one off, because it is clear that the market has now found a floor around 30,000 transactions/month, as the next chart shows.

But, of course, we have to keep in mind that the market in January was 56% smaller than it was in January 2007, when it stood at 77,400 sales/ month. So a year on year improvement is good news, but peak-to-trough the market is still just a shadow of its former self. Until that situation changes, there’s not much to cheer about.

If you dig into the figures you find that most of the improvement is now coming from resales, not new builds, as the next chart shows. New build sales kept the market from total annihilation last year, but I’ve been warning for months that, sooner or later, they might fall off a cliff.

And finally, the following table shows how the market evolved in January, for selected regions. A lot of the improvement came from big cities like Barcelona, Valencia, and Madrid, whereas sales continued falling in popular coastal regions like Malaga (Costa del Sol) and the Canaries. So, when it comes to holiday homes, the market in many areas is still shrinking.

Source: Spanish Property Insight

After several months of a fragile recovery the Spanish housing market relapsed in October, falling 24% compared to the same month last year, according to the latest figures from the National Institute of Statistics (INE).

The chart above shows how total transactions (excluding social housing) evolved this year compared to the previous two years. It shows sales falling in October below 30,000 transactions per month for the first time since the market froze in April, when the international financial system almost broke down. Sales were also down by 10% on a monthly basis.

The next chart (below), giving the annualised percentage change every month this year, clearly shows how the market has relapse into decline after steadily improving since April.

What’s going on? Why the setback?
I think the answer can be found in the breakdown between new build and resales.

All year sales of newly built homes have been higher than resales, whereas in normal years it’s the other way around. If new build sales hadn’t been higher this year the market crash would have been significantly worse.

But many of the new build sales recorded this year were actually sold off plan during the boom, and many others were banks buying properties from developers to keep them afloat, so not really sales at all. If those sources of sales start to dry up, then new build sales will head south.

As you can see from this chart, new build sales dropped sharply in October, almost to the level of resales.

And the next chart shows how, compared to last year, resales have stabilised (around 13% down), whilst new build sales are declining fast, by as much as 30% in October.

We’ll have to wait a couple of months to know if the decline in new build sales is just a temporary setback or a worrying trend.

Source

Good news! Have you sold your Spanish property between 1997 and 2006?

Before 2007 the classical Spanish tax scheme on capital gain tax established two different tax rates applicable to profits obtained due to the sale of a property. Residents were subjected to a 15% tax rate while non-residents were obliged to pay 35%.

The European Commission began two infringement procedures against Spain in 2005 and 2006 for not to comply the European Court of Justice Resolutions on capital gains tax. These resolutions stated that Spain infringed the principles of free provision of services and of free movement of capital and persons, by discriminating non-residents trough a less favorable tax regime.

In order to fulfill EU resolutions Spain changed the system approving a homogeneous tax rate for both residents and non-residents from 15% and 35% respectively to 18%. In spite of the reform, the fact is that the tax regime until December 2006 was illegal under the terms of the EU treaties, implying the possibility for those tax-payers affected to Reclaim and be refunded the 20% overcharged.

LEGAL PROCEDURE.

As the European Union Law is directly applicable in every member state, the law and rights derived from the treaties shall be directly applied by the national courts. Therefore there is no need to appeal to any European Institution.

As expected, the Spanish Tax Office hasn’t accepted any of the claims filed, referring the issue to higher instances. Therefore the procedure to achieve a refund is a little bit more complex than just an application. There are 3 instances and claims involved in the process. Being realistic the length of the process can take around 3 years in some cases, however a shorter period seems possible taking into account the ultimate court cases.

LIMITS.

* There is an essential deadline limit according to Spanish Law, only taxes paid during the last 12 years can be reviewed. To interrupt the prescription is necessary to present the administrative application. Therefore only capital gain tax paid from 1997 and December 2006 can be appealed.
* The second limit is that only those who paid the full Capital Gains Tax at 35% after paying the initial Retention (5% of the selling price) can reclaim.

DOCUMENTS REQUIRED.-

POA for litigation.
Copy of the Spanish Tax Form “Modelo 212” signed and presented to the Spanish Authorities at time of payment.

Title deeds of the Purchase and the Selling. If you can not find one of these documents, don’t panic, we will be able to obtain a copy for you

LEGAL EXPENSES.

As the perspectives to achieve a refund of the payments are extremely good, we can offer our clients to make a small provision of funds to cover expenses as power of attorney for litigation, attorneys at law fees etc.. And only charge you once the monies are recovered.

Source: ELS blog