Alicanteos

FT

During the investiture debate Jose Luis Zapatero announced that he will take measure to help the housing market and also the access to credit for government housing.

“Mr Zapatero told parliament he would speed up government infrastructure projects such as high-speed train links, promote more state-subsidised housing and extend government guarantees for some mortgage securitisations. Property developers with unsold stock would be able to place their empty homes with a state rental agency, and there would be retraining schemes for tens of thousands of unemployed construction workers.”

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Some economists estimate the country is now growing at only half the rate it was last year, when the economy expanded by 3.8 per cent. If the market for Spanish mortgage-backed securities remains closed, growth could fall to just 1 per cent next year, according to some forecasts. At this point, economists say, unemployment would rise sharply.

Half of Spain’s estate agencies closed their doors last year amid a sharp downturn in the sector, according to figures from the nation’s main estate agents’ association API.

Of the roughly 80,000 estate agencies that existed at the beginning of 2007, only 40,000 have survived the slump in sales, the figures show.

‘The majority of the agencies that disappeared were businesses that many times operated with nothing more than a mobile telephone,’ API head Santiago Baena said. ‘It was the social climbers that closed, those who entered the sector because they sought easy money,’ he added.

The closure of the agencies led to the loss of some 100,000 jobs, an estimate that does not take into account the reduction in staff levels at the large real estate agencies that are still open.

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Figures presented in a report by by the Ceimigra Foundation, Bancaja and the Regional Immigration Department show that 70 per cent of properties in the Valencia region owned by foreigners are in the province of Alicante.

This latest data for 2007 indicates that foreign property sales in the province are worth €675m a quarter.

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Viva Estates, one of the largest estate agents on Spain’s Costa del Sol, has closed all but one of its offices, the latest victim of the downtown in the country’s real-estate sector. The company, which sells flats and homes to a mainly British, German and Irish clientele, has shut 13 offices and now operates only out of its main office in Marbella.

It comes after the dramatic slide of Inmobiliaria Colonial SA, the third biggest real-estate company, last month. The president, Luis Portillo, was forced out after a share-price fall of 61.37 per cent in six months.

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The plight of Inmobiliaria Colonial has raised fears of asset fire sales by indebted Spanish property companies, which could further hit already shaky property prices.
Colonial, whose stock lost nearly three-quarters of its value in a week after banks holding shares as collateral in derivative positions dumped stock on the market, has sold over 300 million euros ($441.6 million) worth of assets in the last week.
While it said these sales were part of normal activities, some analysts pointed to the three-way squeeze closing in on indebted Spanish real estate firms facing tightening credit, cooling property prices and rising interest rates.
“If everyone does this in one go, you may see an excess of product on the market, and prices may go down further,” Borja Sierra, former head of Spain for British property broker Savills , now based in New York for Savills Granite.

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With sales slumping, prices faltering and property developers despondent, Spain’s housing market evidently failed to get the soft landing in 2007 that the government and experts had predicted at the start of year.

Some experts are alarmist, some cautiously optimistic, but all agree that the sector is in crisis.

The issue is all the more important as the housing market makes up 7.5 percent of gross domestic product, according to figures from the BBVA bank. The construction industry as a whole employs 13 percent of workers.

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The phones don’t ring off the hook any more at Spanish real estate offices, once the giddy beneficiaries of a sizzling property market. In fact, they hardly ring at all. And the revolving-door flow of customers has vanished.

Sharply higher interest rates, a glut of homes and newly jittery banks have come together to stall the engine that has driven one of Europe’s top-performing economies for more than a decade. And as the market slows, so has Spain’s economic growth.

Promoters who just a few years ago could sell new homes just by showing crude blueprints — they didn’t even bother to build pilot houses or apartments — are now desperate, and sometimes give away a year’s worth of mortgage payments, cars, trips and other freebies to lure buyers.

“The market has become paralyzed. Things are just paralyzed,” said Javier Martinez de los Santos, manager of a realtor’s group called the Business Association of Property Management.

Indeed, that market used to be paradise for builders and home-buyers enticed by interest rates below 3 percent. Real estate agents say people would literally line up to buy. Housing prices rose 17 percent in 2004, for instance, and a still-robust 9.1 percent last year.

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Found via Homesworldwide

Alicante is getting four more hotels and 4,000 new homes, plus a remodelled stadium and new railway station.

British property buyers tend to ignore Alicante, which is a shame as the city is still very Spanish and has beautiful beaches and excellent shops - if you’re looking for a holiday home, the city is a place to consider. Several large projects to improve Alicante’s infrastructure are planned, and further property development is going in alongside them. The three main projects are the remodelling of the city’s football stadium plus the linking of the tram line to the city’s main railway station and the building of a convention centre.

The convention centre will have a major impact on the city’s run-down Sangueta district. Along with the centre, which will look directly out to sea, new homes will be built for the families who currently live there, along with new apartment blocks and three luxury hotels. At ground level there will be new commercial premises, creating room for shops, bars and restaurants. The fourth new hotel will be built, along with a massive shopping area, near the stadium. The tram station and rail station will be built underground, and the route will eventually go all the way to Alicante airport, making it even easier for tourists to reach the city.

Spanish construction companies may escape the worst housing crunch in 15 years after turning themselves into low-cost energy stocks.

Sacyr Vallehermoso and competitors together spent about $16 billion, almost a third of their annual revenue, in the second half of 2006 to buy stakes in Spain’s biggest oil and natural gas producers.

Some, like Sacyr, doubled the assets on their balance sheet. As much as half of the Spanish building industry’s profit now comes from dividends, company filings show. As oil and gas prices rise, those gains are only going to get bigger, said Francisco Salvador, a director of Venture Finanzas in Madrid.

“People are now starting to realize that there is a certain hidden value in these builders,” Salvador said. “Their results are just going to keep on growing now that they’ve minimized their exposure to the real estate business.”

According to the average of eight analyst forecasts in a Bloomberg survey, Sacyr will rise an additional 25 percent and Actividades de Construcción y Servicios, known as ACS and the largest builder in Spain, will extend gains by 24 percent.

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The prices of flats in Barcelona has increased by 7,5 % during the last year but they now take an average of 19 months to be sold, 5 months more than last year. In spite, of increasing prices promoters try to be generous they offers flexible financing , sometimes the parking is for free or at bargain price in the package for a flat.

The average price of a 94 square meters flat is 652.752 euros, that the double of the price for the same flat compared to the price in 2003.

Source: Lavanguardia

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