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Spanish News Today Round-up, 11th April
Property stats misery, Russian enthusiasm wanes, buoyant tourist industry prepared for Semana Santa
Remember, Friday 18th April is a Bank Holiday.
Property gloom and doom as optimistic predictions are put on hold
Warning: those who are hoping or expecting to read positive news regarding the long-awaited upturn in the fortunes of the Spanish real estate sector would probably be well advised to avert their gaze for the following few paragraphs. The material contained below is of a grim and depressing nature, and may upset readers of a weaker disposition.
There has been much talk lately of stability having finally been reached in Spain’s property market, and even suggestions that on the back of increased demand the construction sector may be beginning to spark back into life, but the statistical reports issued over the last week have thrown a very large bucket of ice-cold water on such optimistic predictions, at least for the time being.
The week began with leading property valuation firm Tinsa throwing their weight behind the findings published last week by ST, and reporting that prices are still falling across the whole country. Although the rate of decline is reported to have slowed to 5.5% and in the Balearics and the Canaries near equilibrium appears to have been reached, in the Mediterranean the situation is quite the opposite, and TInsa estimates that the market price has dropped by 11.9% since this time last year. Properties on the Mediterranean coast, they add, have now lost very nearly half their value since the end of 2007.
If market price is falling then this indicates either over-supply or lack of demand, and in Spain at the moment there is a combination of both. The huge stock of unsold new-builds remains largely in place, and the lack of credit and widespread job insecurity make buyers hard to find. As a result, just when analysts believed that sales figures couldn’t fall any lower, in fact they appear to have gone back into free fall: the February figures issued by the central statistics unit showed that the number of sales in the first two months of this year was 25.3% lower than in the same period last year, with activity increasing in February only in the Canary Islands.
As if that weren’t enough, reports during the week suggested that even the reliable non-Spanish market, which in some parts of the country has been keeping the market afloat, may be taking a significant hit: the enthusiasm of Russian buyers is being undermined by the weakening of the rouble over the last year, especially since the escalation of the Crimea crisis.
There must be a point at which the number of sales simply can´t fall any further, but those who said that point had already been reached will have to reconsider. And if demand doesn’t rise, prices will continue to adjust downwards…
Searching for crumbs of comfort, it has to be said that the sales figures issued in the ETDP survey mentioned above tend to be a little out of synch with current market trends since they reflect sales registered, and the registration often takes place some time after the actual signing before a notary: for this reason the February figures may reflect a lack of activity in December and January. Even so, though, it is difficult to draw any solace from the sheer scale of the decline reported, and until the numbers pick up – who knows, maybe next month? – optimism seems unfounded.
Unless, of course, you are the president of Spain’s “bad bank” Sareb. Belén Romana reported this week that in the first quarter of 2014 Sareb sold 3,846 properties to individual buyers, and is well on course to exceed its target for the year. At this rate, Sareb will soon account for a very significant proportion of all the properties sold in Spain, but whether the bank is receiving enough from these sales to avoid further expense to the government remains to be seen.
Away from all the doom and gloom, in the region of Valencia the government is pushing forward with its proposals for an amnesty on illegally built homes. Although the moral issues involved here are questionable, this is good news for buyers who unwittingly found themselves lumbered with properties they can’t sell on, and also for the municipalities in which they are located since any properties legalized will be obliged to pay property tax, but inevitably the plans have angered environmentalists.
Which leads nicely into the rest of the Spanish news, beginning with the environmentalists in Almeria, who have now joined forces to fight the court decision which may yet allow the Algarrobico hotel to be completed. "Dismantle the Algarrobico" will fight a united battle to keep the hotel in the courts and out of holiday brochures as the ecologists announce yet another court appeal.
Also in the courts this week has been former PP treasurer Luis Bárcenas and his wife, still trying to explain the source of the 48 million euro fortune found by the courts in various Swiss bank accounts. Insisting that this money is all the fruits of legitimate bank accounts, Sr Bárcenas maintained that he was but the administrator of a financing system run by the PP party before he became treasurer and that his personal wealth had nothing to do with the below-the-table account funding of the PP at all levels.
Another story relating to the Spanish government this week is the major debate about the future of Catalan Independence,which took place in parliament on Tuesday, the government unsurprisingly winning a parliamentary vote which rotundly rejected a Catalan referendum as unconstitutional, quashing the current route adopted by the Catalan government. The Prime Minister said that an independent Cataluña would be like "Robinson Crusoes Island" and reiterated that Cataluña would remain within the structure of Spain.
This week the Andalucia tobacco industry went up in smoke, as a Cádiz factory celebrated its 300th anniversary by closing down, a victim of “streamlining” as legal tobacco sales in Spain hit half of their 2008 levels. Smuggling of tobacco remains a huge headache for customs, but they also have a major fight to control drug smuggling due to the vulnerability of the Spanish coastline and its proximity to Africa. This week customs reported that they themselves manage to seize a quarter of all drug hauls within the EU. A typical haul turned up in Algeciras: 600 kilos of cocaine hidden inside a shipment of bananas.
Toyota have announced that they will be recalling 6.4 million cars across Spain to carry out technical checks, and technical wizardly continues to break ground in the medical field as the Valencia region successfully carries out its first mechanical heart transplant.
The tourist sector is preparing for the influx of summer visitors, with record numbers of tourists still coming to Spain, ski resorts , campsites and dog beaches ( yes, dog beaches) getting ready for the big holiday week to come.
However, as normal, the arrival of tourists brings its own problem and this week two British doctors drowned trying to save their children in Tenerife and a British millionaire was murdered in Estepona, in what is believed to have been a crime of passion.
The economy however, is starting to show signs of positive evolution, as the IMF revises its growth forecast upwards, injecting a little positivity into the business sector, as interest in investing into Spain seems to be growing.
Murcia Today www.murciatoday.com
New President takes over the region, Semana Santa begins, dry winter causing problems for farmers
Don´t forget, Thursday and Friday are Bank Holidays next week in Murcia, so everything will be closed. However, across the border in Valencia, Thursday is not a Bank Holiday.
This week the region has been in a state of virtual limbo as the formal processes to conclude the transition of presidency to President Alberto Garre took place. The formal debates in the regional parliament were concluded with the formal inauguration and formal naming of the new governmental cabinet, and from today the new regional ministers take up their posts and begin dealing with the various problems and unresolved issues they’ve inherited, bringing in a new era for the regional administration, change to be the order of the day.
Although many of the political topics are of little interest to the majority of ex-pat residents ( and therefore are not generally included on this product as nobody ever reads them) the one topic which is a virtual obsession amongst expats is that of Corvera airport. This however, remains a subject fraught with unresolved issues, and under a new stewardship the debate will yet again begin as to how to deal with the problem. Last night while searching for the correct link the realisation dawned that the articles discussing whether the region could support two airports had actually been posted in June 2010……
Airport traffic figures posted this week showed that although Spain is enjoying a positive and encouraging start to the year, Murcia san Javier is still falling short of achieving its potential, as a poor performance in March compared to last year, has wiped out the good increases registered earlier on in the winter season. Fortunately Alicante airport continues to break records and hopes to pass the 10 million passenger mark this year, feeding some of this traffic through into Murcia.
Meanwhile the region enters an important stage for the whole tourist season next week as Semana Santa heralds the onset of the summer season. Councils are busy preparing beaches and have gone into overdrive this week launching all sorts of events to attract tourists to their municipalities next week.
Another subject which has been a popular one this week is that of property. Several sets of property statistics have been issued by various governmental and private bodies and unfortunately make fairly grim reading. In spite of the much vaunted optimism at the beginning of the year and talk of stabilisation, prices are still falling right across the country apart from in one or two tiny isolated pockets such as the Canary Islands. Everywhere else the story is the same as Murcia, prices keep dropping, and we are now back at Spring 2003 levels. By rights, this should be bringing in swarms of buyers, but with the domestic market still very depressed because of the ongoing economic crisis, this only leaves international buyers. The Russian market is jittery, the situation in Crimea affecting the exchange rate and making Europe more expensive for Russian buyers, but in spite of overseas interest, the volumes of properties sold has continued to fall. That may change with the onset of summer and if the economy does start to turn the corner, but the picture this week for Murcia isn´t a pretty one: falling prices and falling sales.
Unfortunately the other big story which has occupied the regional press this week was the brutal murder of an 83 year old lady in Alhama de Murcia, and this continued when it was revealed that three teenagers and their 11 year old brother have been arrested following the attack.
Other than that, the extremely dry weather of this winter has pretty much finished off the cereal crops in non-irrigated areas of the region and looks set to cause problems for almond, olive and grape farmers, as well as shepherds who rely on scrub pasture for grazing, while another story looks at the future of the desalination plants which have been constructed along this area of the Mediterranean coastline.
Valencia Today www.valenciatoday.es
With spring weather and Easter processions the Valencia Region is braced for a huge influx of visitors
In broad terms the news this week has been dominated by a couple of main themes, namely the forthcoming holidays and mini high season for the tourism market on the one hand, and the rash of disappointing statistics published regarding the property market on the other.
Schoolchildren all over Spain are jumping for joy today as the Easter holidays begin, and the next week will see processions and celebrations in every town, city and village in the country. On the Costas, though, it’s hotel and restaurant owners who are rubbing their hands with glee, as floods of visitors from the rest of Spain and abroad promise to make this one of the busiest weeks of the year. The weather has finally turned and the beaches promise to be well populated, and everything seems to bode well for another prosperous year in the sector: the number of passengers at Alicante-Elche airport is set to reach record levels in 2014, Torrevieja’s hotels have already been busy, and even the campsites in the province of Alicante are forecast to achieve an occupancy rate of 80% over Easter.
In the meantime two campsite owners in Finestrat will be pleased for rather different reasons, having been cleared of negligent homicide after an elderly Dutch couple died due to faulty gas installations in their rented apartment on the site.
It’s not only the coast where visitors are expected to provide a boost to the local economy this week: the processions in historic cities like Orihuela attract a different type of tourism, and this year the guided tours and free concerts in the city promise to make the week even more enjoyable.
Not everybody is glad that summer’s on the way, though: the sudden heatwave in the Costa Blanca has brought swarms of spring mosquitoes to Torrevieja, and in Orihuela surfers are upset that the council are no longer allowing them use La Zenia’s beaches to enjoy their favourite sport.
As for the property market, the data published this week make painful reading. To cut a long story short, the figures still don’t back up the theory that stability has been reached, and although the Comunitat Valenciana is performing slightly better than the rest of the country prices are still falling and fewer sales are being made. As if that werent enough, the falling value of the rouble places the continuation of interest from Russian buyers in some jeopardy. Gluttons for punishment can read a fuller account in the weekly Spanish Property News Summary.
Compensating for this, many will be relieved to learn that the regional government is pushing forward with plans for an amnesty for illegally built homes, much to the anger of environmentalists.
Elsewhere, 66 people were arrested for forming part of a scam to arrange marriages of convenience enabling Colombians to stay in Spain, and on the coast no sooner had the body washed up recently in La Zenia been identified as belonging to British fugitive Francis Brennan than another one appeared, this time in Vila Joiosa. This corpse was so badly decomposed that identification is likely to take a lot longer.
In Castellón a Czech beggar has been penalized after he thought taking his pet boa constrictor with him would increase the amount of money he received from passers-by, and in other news there was success for the surgical team in Valencia which performed the region’s first mechanical heart implant, abject disgrace for the unqualified osteopath arrested in Bigastro and heartbreak for bling-lovers who will still be mourning the 15,000 pairs of sandals which were shredded by consumer affairs officials after they were found to contain too much chrome.
Those mourning this loss will have to get out on the streets to enjoy a few Easter processions to get over the shock…
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