Spain Real Estate News

A number of news sources are reporting this morning on comments made by Antonio Guillen, a lawyer acting for British and Irish purchasers of the Trampolin Hills development in Murcia, which was forced into bankruptcy earlier this month.

Guillen believes that the task of recouping the investments made by overseas property buyers, who purchased hundreds of off-plan units on the resort, has been complicated by “irregularaties” which suggest sales were made without adequate building and planning permits.

 “Trampolin Hills has recently become known for the irregularities in its residential development in the area of Campos del Río, Murcia, especially since it appears that the company started to sell off-plan units without having all the necessary permits in place” says Guillen.

Even more concerning for investors is the suggestion that a bank guarantee was not in place despite it being required under Spanish law. According to Spanish news website Typically Spanish, the developer has just been fined €350,000 by the regional government for not presenting one.

The owners of the Trampolin Hills Golf Resort are named as Antonio Martínez González and Rafael Agiulera Serna. They face fraud charges and have currently been set bail at €30 million, an amount they are appealing.

Source:  GlobalEdge.co.uk

The pace of Spain’s economic contraction eased in the third quarter as a deterioration in domestic demand slowed, official data showed on Wednesday, contrasting with a return to growth in the rest of the eurozone during the period.

Spanish gross domestic product fell 0.3 percent from a quarter earlier, its fifth straight quarterly decline, and was down 4.0 percent from a year earlier, according to final figures from the national statistics institute.

The numbers were in line with preliminary data it published last week and they compare with a second quarter drop in gross domestic product of 1.1 percent on a quarterly basis and of 4.2 percent on a 12-month basis. Europe’s fifth-biggest economy has proved especially vulnerable to the global credit crunch because growth relied heavily on credit-fueled domestic demand and a property boom boosted by easy access to loans.

The entire 16-nation eurozone expanded in the third quarter by 0.4 percent, returning to growth after five consecutive quarters of shrinking output. Spain and Britain are now the only large European economies still technically stuck in recession, usually defined as a drop in GDP for two or more consecutive quarters.

The statistics office said the pace of the economic contraction softened in the third quarter owing to an improvement in domestic demand after government stimulus measures. Household spending declined 5.1 percent from a year earlier after falling six percent in the second quarter, it said.

British luxury-goods company Burberry blamed the ‘extremely challenging’ Spanish market for the first-half profit slump of 24 percent it posted on Tuesday. The company’s sales in Spain for the six months ending September 30 reached 49.1 million pounds (95.8 million euros), compared with 70.7 million pounds a year earlier. It has slashed 300 jobs in Spain, representing about half its total work force in the country.

Prime Minister Jose Luis Rodriguez Zapatero’s Socialist government has responded to the economic slump by putting in place a stimulus plan worth more than two percent of GDP this year which it says is the largest in Europe.

The plan includes a massive works programme, which has torn up vast swatches of Spanish cities as workers extend or repair roads and pavements, that has failed to prevent the jobless rate from soaring. The government predicts GDP will post a 3.6-percent drop in 2009 before returning to growth during the second half of next year.

The economic downturn has had a political cost. The conservative opposition People’s Party would win 41 percent of the vote if elections were held now, compared with 37.7 percent for the ruling Socialist Party, according to a poll published on Nov 2 by the state-run Centre for Sociological Research.

Source: DailyTimes.com

A Place in the Sun has today launched the catalogue for its upcoming auction of Spanish property at London’s Radisson SAS Portman Hotel, W1 on Sunday 13th December 2009. The event will see 56 lots of key-ready properties on the Costa Blanca, Costa del Sol, Costa Calida and Costa Almeria brought to market at discounted prices of up to 50% and in some cases with no reserve price at all.

The aim is to build on the success of A Place in the Sun Live at Birmingham’s NEC last month and emphasise to buyers that now is the time to return to the overseas property market. The auction is in association with one of the UK’s largest independent auction houses, Barnett Ross, to present a range of property types to attract UK buyers back into the market, drawing attention to competitively priced property in Spain and the rest of the world.

With Barnett Ross running proceedings on the day, buyers will experience a professionally run event as well as having access to expert advice through essential service partners; Peter Esders at Chebsey & Co for legal advice, Robin Haynes at Currency Index for foreign exchange and the team at Overseas Mortgage Finder for mortgage product and availability. Said Peter Esders of Chebsey & Co: “Fundamentally the British love Spain, with prices so low we believe now is the time to buy.”

APITS Managing Director Andy Bridge explained: ‘A Place in the Sun brings buyers and sellers together at live events, through the magazine and online - the auction format is a logical and innovative extension of our business.’

Jonathan Ross, auctioneer at Barnett Ross, added: “We see a real opportunity here. In 2007/08 we sold 17 of 18 Portuguese lots at auction and therefore are keen to explore the overseas market again. Our experience and expertise will help A Place in the Sun run what should be a fascinating event.”

For more information on A Place in the Sun’s December auction go to www.barnettross.co.uk/aplaceinthesun.

Amsterdam-based overseas property portal MySecondhome.eu is expanding its new online auction service after a successful trial selling property on Spain’s Costa Brava.

Two homes from four lots were sold at the first auction, including a home valued at €1.1 million which sold for €740,000.

The company now plans to auction twelve lots every six to eight weeks across popular overseas property destinations in France and Spain. The medium term is goal according to founder Kasper Luursema is “to auction 20 properties a month with a sell-through-rate of 40 to 50%”.

How it all works

As the largest overseas portal in Holland, MySecondhome have an extensive audience of Dutch buyers who they market the auction to. Buyers are sent comprehensive information on the properties and fly out to visit them on “open days” which are organized by the company’s “preferred agents” who take a cut of any successful sale. The auction system is provided by their business partner BVA-auctions.com.

Agents and banks are given commission for the successful introduction of suitable property or potential purchasers. Prefered agents are asked to meet buyers at the airport and show them around the properties and local area. Commission rates are in the region of 1-2% depending on the country.

Kasper Luursema comments:
“We believe that selling property through online auctions will become a regular way of selling property, also in non-distressed times. Compared to regular auctions the online auction is a fully transparent process, it fits the times we are living in”.

Source:  GlobalEdge.co.uk

The government of Andalucia, or Junta, announced yesterday a subsidy of 1 billion Euros to help liquidate the region’s property glut estimated at around 70,000 newly-built homes.

Like the ‘cash-for-clunkers’ programme used to subsidise car sales, public money will now be showered on house-hunters in Andalucia. But second home buyers can stay in their seats as the scheme only applies to local residents buying main homes. Even so, it could benefit foreigners living in Andalucia, and help lift the market out of its slump, which might lift prices for all types of property.

How it works

The way it works is developers participating in the scheme have to offer their property for sale at mortgage cost, wiping out their margins and giving a discount of 20%. Participating banks, for their part, will loan 100% interest only for the first 3 years. Starting in the fourth year the Junta will offer loans to subsidise mortgage payments for up to 5 years and a maximum of 15,000 Euros. As a result, buyers will save as much as 40% over 8 years, according to calculations by the Junta.

The offer stands until the end of 2010, the properties must be newly- built, and the mortgage no greater than 245,000 Euros, the price limit for social housing. Mortgages must be 100% LTV, up to 30 years, charging an interest rate of Euribor +1%

Read the fine print, though, and the Junta isn’t being so generous. In year 9 mortgage lenders have to reimburse the subsidy to the Junta and add it onto the outstanding mortgage, so the borrower pays in the end. Nevertheless, thanks to inflation, buyers will probably have to pay back less, in real terms, than they borrow. Many people expect inflation to take off in the next few years.

Criticisms

You could argue that it is morally questionable for the government to be spending 1 billion Euros subsidising Spanish property buyers when there are so many other more needy causes. And isn’t this is just a wheeze to get buyers to pay inflated prices for homes today whilst transferring the burden of payment onto tax payers in the future?

Wouldn’t it be cheaper, and cause less economic distortion, just to drop prices today to a level that people can afford without crucifying themselves on a 30 year mortgage subsidised by the government?

Source:  Kyero.com

By Alfonso Daniels in Almanzora Valley, Spain

BRITONS whose Spanish homes have been rendered worthless because they lack a "habitation licence" will today petition Madrid in their fight for justice.

The petition will detail more than 1,000 cases of people – mostly retired couples – who fell victim to a scam whereby local mayors reclassified rural land to sell to builders, often in return for bribes, and they in turn marketed properties to unsuspecting clients, knowing the requisite permits were not in place.

Many have not even been able to occupy their houses, getting only a stamped document in exchange for their life savings.

Suzanne Wyatt said: "The majority paid the money six or seven years ago and lost everything. I spent 90,000 (£81,000) and haven't received anything. I doubt we'll be compensated."

She admits the chances of getting a response from the Spanish government are slim.

Danish MEP Margrete Auken said: "It's the largest case I've ever come across. Tens of thousands of people, British, Germans, Spaniards, are affected. Rules were not respected, corruption was rampant."

She said the Spanish government was trying to avoid tackling the issue, despite a resolution passed in March by the European Parliament threatening sanctions unless these cases were resolved.

Nowhere is the situation starker than in the arid and rugged Almanzora Valley in south-eastern Spain.

Liz and John Browne, a retired couple from Bellshill, Lanarkshire, moved there five years ago. But their retirement dream turned into a living hell after realising they had bought one of some 11,000 illegal properties built in the area.

"We're trapped. We can't do anything. The builder and our Spanish lawyers said the building licence was in order, so we paid 140,000, which was half of the total, and look what we have now," said Mr Browne, pointing at the empty concrete shell of his house.

They have spent the past five years renting another place for 600 a month using the other half of the money, waiting in vain for someone to compensate them or to be allowed to complete their house. "Our money is running out," Mr Browne said. "I'm 72 years old and a few months ago, I was diagnosed with cancer. I feel sick. I don't want to leave my wife with nothing and give up our dream."

In another part of the valley, in Aljambra, 13 British couples live in whitewashed, tiled houses with swimming pools which they bought five years ago for about 200,000, but which turned out to be illegal. Their electricity has been cut off, forcing them to buy diesel generators which they can afford to run for only about five hours daily, while some houses do not even have running water. The local mayor has been arrested, but they do not expect their cases to be resolved for years.

Source: Scotsman.com

They had claimed their deposit back after a delay in the handover over a challenge to the building licence

A court in Marbella has told the four British purchasers of a property seen as illegal by the Junta de Andalucía that they cannot have their deposit returned and they must go ahead with completing the purchase.

The buyers paid over more than 103,000 € as a deposit on the property on the urbanisation Santa María Green Hills, in Elviria Sur, signing the contract with Marbella Vista Golf S.L. in November 2004. Diario Sur reports that the flat should have been handed over before 1st January 2006, but, owing to the regional government’s challenging the building licence they considered to be illegal, neither the property nor the gardens and promised golf course were completed by that date.

Read the rest of the story at Typically Spanish.

 Police are now searching for two foreign professional hit men

 Smile! You are in Spain, runs the Spanish tourist board's advertising slogan. But some Britons who bought property there in the boom time have been doing anything but that. 

 The developer behind the Trampolin Hills Golf Resort  in the Spanish province of Murcia has been forced into bankruptcy proceedings unable to pays its debts, according to reports in the local press. Administrators have been appointed to run the company, and creditors now have a month to register their claims.