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Who to go to when planning to buy a house in Spain

The New York Times Real Estate section talks today about a decisive decision: to use or not to use the services of a real estate agent.

"Why should a buyer bother using an agent?", asks the paper, "to protect his or her interests in an expensive, often complex purchase that can become even more ...continue reading "A House in Spain? Do it Safe"

Government considers hiking income tax on Spain's highest earners

Under the proposed plans, the new levy would be imposed on net wealth in excess of EUR700,000, affecting an estimated 160,000 of Spain’s wealthiest individuals. Expected to yield around EUR1.08bn (USD1.48bn) a year for the government, the threshold for the proposed levy is around seven times the previous EUR120,000 2008 threshold to ensure that the middle class is protected from the measure.

The government's move follows an announcement by Spain's FinanceMinister Elena Salgado at the end of August, in which she explained that the government is currently considering the idea of ...continue reading "Target: Spain’s Super-Rich"

A mystifying equation:  1 + 1 equals 2.5 on real estate

It's a new way to make better profit according the New York Times. "It applies to breakthrough combinations", says the paper, "in which someone buys two adjoining apartments and breaks through the connecting wall, or in some cases the floor or ceiling, to create a bigger place. The equation makes ...continue reading "Selling Contiguous Apartments"

The Spanish property market is finally starting to recover

The consensus is that demand is now growing, and that prices have fallen far enough, but that the market is still difficult and very different to what it was -- a fact that the road show planners seem to have missed.

The road show hopes to appeal to the mass-market, low end buyers, but these buyers relied on the loose lending that fuelled recklessness and over-development in the market, and also on the surge of confidence that came from house prices rising rapidly in their home countries.

So, now we have a Spain that is still over developed and over supplied, and where lending is hard to come by, but where prices are up to 70 per cent below peak 2007 prices. And it is that last fact that has the buyers coming back.

property-abroad.com

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China’s property market at risk

China

News that government measures to cool China’s sizzling property market were beginning to work have no doubt been a relief to many investors in the country.

Property, afterall, is particularly important in China, with property construction alone accounting for 15 per cent of China’s gross domestic product. But a report in Monday’s FTfm says it is not time to stop worrying yet.

Edward Chancellor, a member of the asset allocation team at investment manager GMO, looks at the parallels between the Spanish housing market bubble and the bubbles he thinks are still inflating in the China, Hong Kong and Singapore property markets.

The three respective authorities have all instituted measures to cool their property markets. Beijing has gone furthest. Over the past couple of years, the People’s Bank of China has raised bank reserve requirements nine times.

Chinese banks have been ordered to restrict lending to real estate developers. Households face a limit on the number of properties they can acquire. Beijing also plans to provide some 36m affordable homes over the next five years.

The trouble is that none of these measures will work, according to Chancellor. He points out that during Spain’s housing boom there was relatively low loan-to-values on mortgages. Spanish banks also kept mortgages on their balance sheets and there was no subprime.

Nothing the government did stopped the great Iberian housing bubble from inflating. Spanish home prices more than doubled between 2001 and 2006. Housing construction soared. The lending boom actually increased in intensity after the introduction of counter-cyclical capital rules.

ft.com

[youtube]http://www.youtube.com/watch?v=YcHlUZOs-5s[/youtube]