Tag Archives: finance
Foreign buyers boosting Spanish property market, especially on Costa del Sol
An increased number of foreign buyers is set to boost the residential property market in the Costa del Sol in Spain, one of the country’s most popular areas with overseas purchasers. A new market forecast report from Instituto de Practica Empresarial (IPE) business school, in collaboration with property company Mar Real Estate, suggests the market could grow by 10% in the area. It also says that the market is set to grow by between 5% and 7% in major cities such as Madrid and Barcelona and 3% in other cities. The IPE says that home prices on the Costa del Sol are already up 10% this year, and now represent 5% of all sales nationwide and if sales continue growing at their present trend, the property market in Málaga province will increase to 20% of the overall Spanish market. The growth is buoyed by foreign demand for holiday homes on the Costa del Sol and the IPE report suggests that surging sales will help reduce the glut of new homes on the coast. Indeed, the excess inventory of new homes is expected to fall by 50% this year. Luxury home sales, in particular, are coming back strongly on the Costa del Sol, according to the IPE report, driven by a better exchange rate in Pounds and Dollars, and the security and stability of Spain. Meanwhile, the latest report from property valuation firm Tinsa says that the Spanish property market is undergoing a widespread recovery. Average property prices fell by 2% year on year in July, the lowest rate of decline since May 2008 but this masks growth areas along the Mediterranean coast in particular with some areas seeing price growth of 2.8% year on year. The data shows that on the Mediterranean coast, where prices have fallen by an average of 47.6% since the economic downturn, the average price of a home has increased by 3.8% since the end of 2014. This is more than large cities and the Balearic and Canary Islands where average prices have risen by 0.2% and 0.9%, respectively. Tinsa data also shows that five of the top 10 most expensive property hotspots are located in the Balearic Islands but Alejandra Vanoli, managing director of Mallorca Sotheby’s International Realty, said that there are prices per square metre in these locations that far exceed Tinsa’s estimations. ‘It’s not unheard of to reach as high as €30,000 per square metre for the most desirable Port Andratx home. Demand is strong from some of the wealthiest individuals and families in Europe, the US and beyond,’ she explained. Tinsa figures also suggest that the Balearics weathered the storm of the Spanish property market price ‘correction’ more positively than the rest of the country. While the average drop in prices across the whole country stands at 42%, in the Balearic Islands most regions registered less than a 35% decline. Palma was also highlighted by Tinsa as property transactions increased by more… Continue reading
Number of people moving home in UK falls in first half of 2015
The number of home movers in the UK in the first six months of 2015 was 9% lower than in the same period in 2014, new research has found. Despite this decline, the number of movers in the first half of 2015 was 32% higher than in the same period in 2009 at the depth of the housing market recession, according to the latest Lloyds Bank home movers review. It explains that the rise in house prices over the past few years has boosted home owners’ equity in their current homes making it easier for them to fund a deposit towards the purchase of their next property. Notwithstanding the improvement since 2009, the number of home movers in the first half of this year was less than half the total in the first six months of 2007 when it was 327,600. The research also shows that the percentage decline in the number of home movers between the first halves of 2014 and 2015 was closely in line with the 10% fall in first time buyers. First time buyer numbers have, however, risen significantly more quickly than home movers over the last few years. As a result, home movers have declined as a proportion of all new mortgage financed home purchasers from 72% in 2004 to 54% in 2015. ‘There was a modest decline in the number of home movers in the first half of the year compared with 2014, which was in line with the general softening in housing market activity,’ said Andrew Mason, Lloyds Bank mortgages director. ‘Whilst the number of home movers has risen significantly since 2009, it remains well below previous levels and has recovered less strongly than first time buyer numbers. This is likely to partly reflect the high costs associated with moving home, as well as highlighting the difficulties that homeowners can face in finding somewhere suitable to move to due to the shortage of properties available for sale,’ he added. The figures show that the average price paid by a home mover has grown by 25% over the past five years from £208,654 in 2010 to £261,524 in 2015, an increase of £52,869, equivalent to a monthly rise of £881. Home mover property prices have increased by 6%over the past year. The average deposit put down by a home mover in 2015 was £87,954, some 8% higher than in 2014 or £81,549. This equates to 34% of the average price paid by home movers of £261,524. Regionally, home movers in London put down the largest average deposit at £175,273 or 36% of the average property value of £492,882. This is more than four times the average deposit put down by home movers in Northern Ireland where it was £43,625 and the lowest. Nationally, the recent changes to the Stamp Duty system have saved the average home mover £4,769, reducing the tax bill for someone buying the average priced home mover property of £261,524 from £7,845 to… Continue reading
UK home owners should factor in interest rate rise sooner rather than later
Home owners and those thinking of buying a home should budget for an interest rate rise after the Bank of England indicated that it expects to see interest rates rise sooner rather than later. But Banks of England governor Mark Carney refused to be drawn on whether this would be before the end of the year and indicated that it will depend on factors such as the state of the euro and what happens in Greece. Interest rates in the UK have been at a record low of 0.5% since March 2009 but Carney said that the time for an increase is ‘drawing closer’. He said that the decision would be determined by looking at economic data including wage growth, productivity and import figures. He also said that the increases, when they came, would be gradual and limited to a level below past averages and line with his previous forecasts of how rates will change. Experts are divided as to when the rise might happen. Andrew Burrell, head of forecasting at JLL, believes it is unlikely that rates will rise before the first quarter of next year. ‘Despite wage rises and a recovering UK, a muted inflation forecast and global economic headwinds mean that interest rates are likely to stay the same for a couple more quarters,’ he said. Barry Naisbitt, chief economist of Santander UK, also believes that economic uncertainties still exist to prevent an immediate rate rise and John McNeill, co-manager of the Kames Absolute Return Bond Global Fund, thinks it will not happen until 2016. Property buyers need to recognise that rates will move sooner rather than later, according to Nicholas Leeming, chairman of agents Jackson-Stops & Staff. ‘The decision to maintain interest rates at the current, historically low levels comes as no surprise. However Mark Carney has been careful to flag that interest rates will edge higher in the longer term as the economy continues to grow and inflationary pressure on wages increase,’ he said. ‘Property buyers should recognise that rates will move towards more sustainable, long term levels and so budget for higher mortgage costs accordingly. Vendors should be aware that any such increases will create resistance to overly high guide prices,’ he added. Steve Bolton, founder of Platinum Property Partners, pointed out that the UK housing market as a whole has enjoyed six years of historically low interest rates. He believes that those who have invested in buy to let property over this period have also benefitted from high levels of demand for private rental accommodation across the country. ‘This has meant that the return on investment for buy to let has been strong, with many investors also seeing an impressive growth in the value of their properties. But the announcement that the base rate could start to rise soon has implications for the housing market,’ he said. ‘On the one hand, more expensive mortgage rates will possibly put a dampener on demand for borrowing, but on… Continue reading
