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Homes sales up again in Spain in September, most recent data shows

Home sales in Spain increased again on an annual basis in September after dipping in August, according to the latest figures from the National Institute of Statistics Sales went up 13% in September and excluding social housing, there were 24,096 sales registered, the highest level in four years and 14% up on a monthly basis. In the 12 months to the end of September there were 216,682 sales inscribed in the register, almost identical to the same period last year. On that basis it looks like the Spanish housing market is no longer shrinking, according to Mark Stucklin of Spanish Property Insight. He pointed out that looking at the annualised change in sales each month, this year is clearly an improvement on last year, excluding the first two months of the year when figures were artificially distorted by tax changes. The data also shows that the difference between resales and newly built properties continues to widen, though sales of both types increased in September, with resales up 17% and new builds up 10.5%. He believes that more resales are emerging because after years without building any new homes it is possible that the supply of new homes that people actually want to buy is running dry so buyers increasingly have no choice. A breakdown of the figures on a regional basis show that the province of Malaga, which includes the Costa del Sol which is popular with overseas buyers, along with the Balearic islands have seen sales rise close to 15% this year. The Canaries, and Alicante, home to the Costa Blanca, another area that attracts a lot of overseas buyers, have also been showing strong gains. Coastal provinces where foreigners tend to buy are doing much better than provinces in the interior, which rely more on local demand. Meanwhile, figures from the Spanish Consumer Price Index shows that the average price for long term rentals in Spain fell by 0.7% in October compared to the same month in 2013. This means rental prices have been falling for 19 months in a row and it is sharper than the general CPI which is down 0.1%. Overall rental prices went down by 0.1% on a monthly basis regionally the monthly rate for long term rentals fell in 15 autonomous regions. Asturias was the only region where it rose, up 0.1% and prices remained static in Catalonia. The regions with the biggest price drops were Navarre down 2.3%, Murcia down 2.1%, La Rioja down 1.7%, Madrid down 1.4%, The Valencian Community down 1.2% and Castilla La Mancha down 0.9%. Andalucia and Extremadura both saw a 0.8% fall and prices dropped by 0.7% in the Canaries, 0.6% in Aragón, Cantabria, and Castilla y León, 0.4% in the Basque Country and 0.2% in the Balearics and Galicias. Continue reading

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Spanish property sales now regarded as stable as they increase five months in a row

Year on year property sales in Spain have increased for five months in a row, signalling that the residential real estate market is becoming more stable. The latest figures from Spain’s National Institute of Statistics (INE) shows that sales increased by 10% in July on an annual basis and by 9% on a quarterly basis. ‘After five consecutive months of annualised sales increases it’s clear the Spanish property market is starting to recover in volume terms, as more buyers enter the market. The figures confirm that overall sales are now stable, if not growing slightly,’ said Mark Stucklin of Spanish Property Insight. ‘Markets are all about transactions and prices, which determine volume and value. Increasing transactions are a sign of confidence that improve liquidity and reduce risk. When buyers outnumber sellers prices start to rise. After almost eight years of consecutive declines in home sales, that is welcome news for Spain but it doesn’t mean the Spanish property crisis is over,’ he warned. ‘It’s now crystal clear that the Spanish property market has established a floor in transaction terms, suggesting sales are unlikely to fall any further. If anything they will continue growing, as they have for the last five month. The question is how sickly or robust will the sales recovery turn out to be,’ he added. The INE doesn’t break down monthly sales figures by nationality, but Stucklin and other real estate experts point out that foreign buyers are driving the sales increase. This suggests that there is plenty of scope for further increases when local demand picks up with falling unemployment and easier mortgage lending. Looking at sales by previous ownership, the trend towards resales continues, with new sales down 8.3% in a year, and resales up 26.8%. ‘Expect the trend to continue as the pipeline of new homes that people actually want to buy dries up over the next year or so. Housing starts have collapsed by 95% since the boom, and the Spanish home building industry has all but disappeared. It might not be a bad time to invest off-plan, if you can find anything to buy off-plan that is,’ said Stucklin. He also pointed out that the label ‘new home’ is starting to lose its meaning in Spain, as most of the new homes currently on the market were built years ago so are now far from being new. Built during a boom when standards fell and prices rose these homes have been collecting dust and depreciating for years. Looking at sales by region, some of the biggest increases took place in the provinces of the interior, for example Cáceres saw sales increase by 87%, albeit from a low base. Sales in some coastal areas like Málaga’s Costa del Sol where foreigners tend to buy, were above the national average. ‘For the time being, and likely for some time to come, sellers outnumber buyers in the Spanish property market, so price pressures will remain muted at a national level,’ Stucklin said. ‘It doesn’t help… Continue reading

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Wear and tear is most misunderstood issue for tenants and landlords

Fair wear and tear is the most misunderstood area of the whole renting process and agents and landlords still have unrealistic expectations centred on the deductions that can and cannot be made from the tenant deposit, it is claimed. According to the Association of Independent Inventory Clerks (AIIC) it is a commonly held view in the lettings industry that a tenant cannot be held responsible for damage at the end of a tenancy caused by ‘reasonable use of the premises and the ordinary operation of natural forces’. However, while the precise source for this quote is unknown, it is a general guideline that has been accepted across the industry, and the source of most disputes. Recent figures from the Tenancy Deposit Scheme annual survey reveal that cleaning related issues make up 56% of all disputes. Damage to property accounts for 43%, redecoration 30%, rent arrears 17% and gardening issues 13%. It seems that 55% of all disputes are raised by tenants unhappy about the proposed deductions from their deposit and of these, only 21% received all their deposit back. In contrast, 45% of disputes were raised by landlords and agents and of these, only 19% received the amount in dispute. ‘I have lost count of the number of times that a landlord or letting agent has demanded that a property is repainted from top to bottom following a five year tenancy, when the marks on the walls are no more than normal wear and tear,’ said Pat Barber, chair of the AIIC. ‘Everyone has their own view of what constitutes fair wear and tear. Landlords and letting agents may hold the view that a tenant is responsible for repainting a whole property at the end of their tenancy, however the law may not agree. A tenant on the other hand may believe that all the marks, pin holes and damage to the interior walls at time of check out will be covered by normal wear and tear. The same viewpoint is often also applied when assessing damage and wear to the contents of the property and its fixtures and fittings,’ she explained. She pointed out that there are two main things to remember with wear and tear. Firstly, the tenant has a duty of care to return a property in the same condition at the end of the tenancy as found at the start and as listed on the initial inventory report with allowance for fair wear and tear. Secondly, the law does not allow for betterment or ‘new for old’ when assessing the action needed to be taken after a check out inspection. So, if an item was old at check in and after a two year tenancy, there is some additional damage, the law will not allow a landlord to simply replace this item with a new one. Instead, some sort of compensation is allowable towards future replacement…. Continue reading

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