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Spain Real Estate News

What's really happening in the real estate world in Spain? The EOS Team are going to be keeping you up to date with everything that's happening from a market perspective.

Kylie Minogue moving to Spain
30 April 2009

Kylie Minogue is set to buy a house with her new boyfriend in Spain.

The 'In My Arms' singer wants to settle down with model Andres Velencoso, 31, in the Tossa De Mar area of the Costa Brava, close to where his family live.

A source told Britain's The Sun newspaper: "Things are going really well between Kylie and Andres and she has been spending a lot of time in Spain.

"As well as golf, his other passion is scuba-diving, and there are great dive sites at Tossa which he and Kylie have been exploring.

"He lives in New York but goes home at least once a month so it makes sense for them to have a base there."

In preparation for the proposed move, the 40-year-old Australian singer - who started dating Andres six months ago - is keen to learn the language so she can integrate with the locals.

The source added: "Kylie wants to learn Spanish and has been following DVDs. But having a house in Spain will make things easier."

In February, Andres introduced the pop star to his father and sister for the first time during a trip to Tossa De Mar.

Earlier this month, the couple went on holiday together to North Queensland, Australia. During the break, Kylie introduced Andres to her parents and brother.

Source: SKY TV

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Santander Turns to Internet to Sell Homes
29 April 2009

In the midst of Spain's worst housing crisis in decades, house hunters will soon find an unusual location to pick up a new home at a hefty discount.

Grupo Santander SA, one of Europe's largest banks, is getting ready to launch a Web site on which it will sell as many as 950 new homes to the public at a 20% discount to market prices. That comes after the Spanish bank sold 350 homes to its own employees on the same terms.

Santander's fire sale isn't entirely voluntary. The Spanish bank picked up some 1,300 homes last year when developers to whom it had lent money defaulted on their loans and the bank agreed to swap debt for the property. At the end of 2008, Santander, including Banesto, its Spanish retail bank, had property valued at some €3.8 billion ($5 billion) on its balance sheet, most of that originating from debt-for-equity swaps.

"The goal was to get ahead of the situation and to avoid some of those loans becoming nonperforming loans, avoid lengthy bankruptcy proceedings involving many creditors and to help clients avoid bankruptcy," says a Santander spokeswoman.

The scenario at the Spanish bank is playing out across Europe. With property-loan defaults on the rise, many European banks are knee-deep in loan-restructuring plans.

But as the economy worsens, the pressure on property owners who borrowed against their real estate is mounting. Before the recession is over, the banks will likely end up with more property on their books and could become big sellers of real estate.

Standard and Poor's, the credit-rating company, says delinquency rates on European commercial-mortgage-backed securities have been rising sharply since the summer. In its latest monthly report tracking CMBS, it says delinquency rates on sterling-denominated loans rose to 3.84% in March from 2.8% in February.

For loans denominated in euros, delinquency rates rose to 3.18% from 0.85%. Standard & Poor's monitors 1,100 loans that serve as collateral for European CMBS. Of those, 20 were delinquent at the end of March, up from 15 in February.

"We think the rate of delinquency will continue this year and repeat the pattern that we've seen month-on-month," says Judith O'Driscoll, an analyst with Standard & Poor's in London.

To be sure, many banks remain reluctant to sell despite the increasing pressure from rising defaults on commercial-property loans. Some private-equity investors who have raised cash to buy distressed property complain that they can't do deals.

"Everyone is talking about the big casino, but one very likely scenario is that the big casino will never come because the banks are sitting on the assets and hoping they won't have to sell before the recovery comes," says Eric Sasson, a managing director of Carlyle Group. "It's not a question of price; they just don't want to sell if they don't have to."

But the longer the recession lasts, the greater the pressure will be on the banks to sell. "They may not be able to hold onto the property because of their need for capital," says Mike Birch, a loan-workout specialist and founder of REAM Capital Partners, a real-estate asset-management company. "In the end, I don't think the banks will have the luxury of hanging on to the property for long."

So far, there has been a dearth of sellers in Europe. The volume of real-estate investment in Europe fell 44% to €11.5 billion in the first quarter of 2009, from €20.6 billion a year earlier, according to property consultant CB Richard Ellis.

"The banks on the whole want to avoid selling too cheap and allowing someone else to profit on the recovery," says Philip Cropper, director of CB Richard Ellis' real-estate finance services in London.

Source: Wall Street Journal

Like 0        Published at 21:34   Comments (0)

Crisis, late Easter hurt Spanish tourism in March
22 April 2009

MADRID, April 21 (Reuters) - The number of foreign tourists visiting Spain in March fell by a fifth compared to a year ago, with British numbers undermined by recession and the weak pound and hurt by Easter falling outside the period.

Data from the tourism ministry on Tuesday showed 3.4 million tourists visited the world's second most popular destination last month -- 20.8 percent fewer than a year ago or 10.1 percent down when corrected for Easter falling in April.

Such a sharp fall will alarm Spain's second biggest industry after the devastated property sector. Tourism employs one in seven Spanish workers and made 42 billion euros ($54 billion) from the 57 million foreigners who holidayed there last year.

The March fall compares to a previously-reported 15.9 percent decline in February, which the tourism ministry said it had revised to a fall of 11.3 percent on Tuesday because of "calendar effects".

One of the biggest worries for industry bosses will be the fall in British numbers, down by a quarter in March.

Spain's biggest origin market is reeling from one of the worst economic crises in Europe and the weak pound makes euro zone countries such as Spain more expensive, and competitors like Turkey, Croatia and Egypt more attractive.

Lobby group Exceltur said 100,000 jobs in the industry will have been lost by next month compared to May 2008 -- the last time tourist numbers here rose. Spain's unemployment rate is already the highest in the OECD at around one in six workers.

"The crisis has affected us a great deal," said Exceltur Vice President Jose Luis Zoreda, adding that foreign visits would fall 6 percent and hotel stays by 8.1 percent in 2009.

A price war raging across the hotel, car rental and transport sectors was savaging profits as businesses scrap for custom, he said.

"Profits have fallen across the board and with great intensity," he said, adding that 42 percent of businesses were now loss making, and forecasting a 6.4 percent drop in sector income this year. (Reporting by Ben Harding; editing by Stephen Nisbet)

Source: Reuters

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Expats exploit loophole on homes overseas
16 April 2009

 British expats living in some of the most sun-drenched retirement hotspots around Europe have been using EU law to make sure they get every penny of their UK benefits this winter. An article in the People newspaper this week has revealed that up to £14million in winter fuel payments have been claimed by people living overseas permanently.

It appears that more than 27,000 people living in Spain have claimed the winter fuel payment this year when average winter temperatures on the Costa del Sol are 14 degrees C.
The allowance of up to £400 per household is available to all British pensioners, and in line with other payments from the state, can be collected in any other EU country. Taxpayers groups have condemned the payments, saying they should be used for the benefit of the needy in Britain, where one of the harshest winters in recent years has just passed.
Mark Wallace, of the Taxpayers' Alliance, said: "There are serious ethical concerns about paying winter fuel allowance to people who live in the sun while pensioners back home struggle to heat their homes.The Government must get its priorities right. This allowance was meant for people freezing in Britain not someone soaking up the sun abroad.”
In the winter of 2007-2008, more than 55,000 retired Brits claimed the winter fuel allowance while living overseas, costing the taxpayer more than £9million. This year could see the figure rise above £14million, as the government has boosted payments by a quarter and there are thought to be a fifth more expats taking advantage of the loophole in the system.

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600 Britons in Spain may lose their homes in failed bank 'fraud'
12 April 2009

 Hundreds of Britons living in Spain are fighting to save their homes after becoming involved in an alleged multi-million-pound fraud involving the collapsed Icelandic bank Landsbanki.

Up to 600 expats were persuaded to raise money against the value of their properties to invest in a fund run by a subsidiary of Landsbanki.

Many raised hundreds of thousands of pounds in the scheme, which was advertised in local newspapers, and took up to a quarter of the money in cash – sometimes to cover medical bills – while the other 75 per cent went into the investment fund.

The Britons claim they were assured by financial advisers that the returns from the money in the fund would cover the interest they were being charged. Such schemes have been banned in Britain since 1990.

But the expats say that, even before the bank failed in October, the fund was deteriorating and many of them now risk having to sell their houses to meet spiralling debts or see them repossessed. A few are understood to owe millions of pounds.

Lawyers acting for a group of the investors have now launched a legal action against a number of financial advisers and the bank, accusing them of misleading publicity and fraud.

The claims are being examined by a court in San Roque and a prosecutor is investigating whether there is a criminal case to answer.

Among the alleged victims are Gillian and Roy Birch, who moved from Britain to Alicante in 1986 but suffered financially in the late Nineties.

When they saw advertisements for the scheme in local newspapers, they thought it was the answer to their problems. Although initially cautious, they were eventually won over by local advisers after being told that it could save them thousands of pounds in Spanish inheritance tax when one of them died.

They have since found out that the scheme did not affect their tax position. ‘This calamity has totally devastated us,’ said Mrs Birch, 83. ‘We have both been through hardship and danger in our lives. My husband, who is 86, flew Lancaster bombers in the war and I drove an ambulance in the Blitz.

‘We have both worked hard since and were convinced that we would have a tranquil retirement, and now this. We have had many a sleepless night.’

Les Maffey, 72, who moved to Spain in 2000, raised €315,000 (£283,000) under the scheme when his wife, Irene, was diagnosed with lung cancer. Her treatment cost €50,000 (£45,000) but she died aged 65 in 2007.

Because of the poor performance of the fund, higher than expected management costs and the collapse of Landsbanki, he now owes more than €100,000 (£90,000).

‘If I were to sell my property, I would be left with a debt I would have to meet out of my savings,’ he said.

‘As a result of the stress caused by the worry of losing everything we worked all our lives to achieve, my own health is suffering.’

Mike McInnes, who has set up the Landsbanki Victim Action Group, said they hoped a Spanish judge would block any attempts to repossess their homes.

The 62-year-old businessman, who lives near Marbella, said that because house prices had plunged, many investors would no longer be able to clear their debts by selling up.

He said that his home was valued at €800,000 (£719,000) when he and his wife Julie, also 62, took out their loan in 2005. Their debt is currently €500,000 (£450,000), about the same as their house is now worth, and they have a relatively small pension.

He hopes the debts may be written off or significantly reduced if the bank was found to be in breach of Spanish law.

‘We were told our money was safe but there are hundreds who could lose their homes,’ he said. ‘It is a complete mess.’

The Luxembourg subsidiary of Landsbanki, which is in the hands of administrators, declined to comment.

Source: Daily Mail


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