Spanish Property Market Update 2010

According to Spain's national institute of Statistics (INE) the collapse in property sales may be coming to an end.
Based on the latest figures from July, there were a total of 37,079 property transactions in the month, of which 33,694 were standard sales and 3,345 were social housing (VPO).
Looking at non-VPO sales for a moment, that is a decrease of 19.6% year on year. Not necessarily a good figure, but compared to earlier in the year there has been a marked improvement in the level of sales with an increase month on month of 5.8%. Finally a positive bit of news!
On another interesting note looking at the figures for Spain, of the total properties sold 18,688 were for newly completed properties and 18,351 were for re-sales. This is the first time in recent years that both of these categories have reached parity. Generally new properties have made up a higher percentage of the total over the last year, due to the off-plan property boom in recent years. But with fewer and fewer off-plan sales from the 'boom' left to go to completion, this figure should continue to decrease and re-sales should once again make up the majority.
But this does not mean there will be no more new build sales. There are still many promotions on the market still looking for buyers. So, we can expect the figure to continue to decrease, as the best new build properties will sell first, and the less popular will continue to drop in price until there is demand. Although I could be wrong on this matter and the new build figure might suddenly plunge to next to nothing! Unlikely, but still a possibility.
Now for a bit of positive news for us here in Andalucia. Of the total 37,039 properties sold in Spain, 7,898 were in Andalucia. That 21.1% of the total. Or 1 in 5 of all properties sold in Spain!
So although the figures are better for July than for June, year on year, they are still down. And of course they are lower than the 2007 peeks. But if this trend continues we might soon see the end of this long dark tunnel
Regards
Andrew Belles
Andrew Belles is a real estate agent with years of experience on the Costa del Sol property market. Costa del Sol property
Article Source: http://EzineArticles.com/?expert=Andrew_Belles 2010


Spain today, is a very different Country from the Spain that many of us lived in, and visited in the last decade. In reality experts foresaw the current collapse of an economy based on unsustainable credit, real estate speculation, and pulled out of Spain before the collapse of 2008. But what is the reality, and future of a once dubbed European Union success story?
Spain always had potential, a low population compared to the nations large land mass, and the warmest all year round weather in Europe. This fuelled the massive growth of what once was considered a rural backwater, into a dynamic new economy in the late 1990's.
What fuelled this "boom" was real estate speculation, the stability of Spain's economy as it adopted the Euro, and the relative low labor costs of Spanish workers before Central Europe fully joined the European Union.
During this property boom, building and home ownership fuelled a never ending development of Spain's famous coastline, creating what many saw as a never ending concrete jungle by the beach. Property prices rocketed, as did the ease of loans, often unsecured, and as risky as the "sub prime" mortgage game in the United States.
Few speculators eager to cash in on the profitable business of selling the "Spanish Dream" of a first and second home, noticed that as property prices rose, as the market was in reality flooded with new, empty properties. Banks started to give home loans to anyone with an income, even contemplating "generational property loans."
Andalusia was one example. Many local people earned no more than 600 euro a month, in fact the majority of people working in Spain, earned the lowest salaries in former Western Europe. But were encouraged to buy a "home", and a new car,- when they could barely afford to rent a room on their salary.
Rising living costs, and low salaries killed the Spanish dream for many expatriates as was the shortage of any available work. Before the current unemployment crisis, young Spaniards demonstrated in Madrid, citing the fact they could not live on 600 euro a month. Expatriates cashing on this boom, sold on often buying properties in Bulgaria and South Africa, Spanish-based real estate agents promoted.
Corruption also helped kill the economy. Before the 2008 collapse Spain had the unenviable reputation of having three former Majors in jail at the same time, and the local police chief. All helped create a mini-boom in Marbella, at the expense of "selling" public land to favored speculators, and awarding illegal ownership papers. This corruption killed the faith in Spanish property ownership.
After the property boom burst, Spaniards who work earn just enough to pay a monthly rent, or cover the mortgage cost particularly on a sub prime mortgage. Almost 50% of young Spaniards are unemployed, many now dependent on their families for support. Spain gas the highest:official unemployment rate in Europe.
Economists knew Spain's development was unsustainable, and ready to burst. Once European union business grants ran out, many small businesses, the mainstay of the Spanish economy closed, leaving Town and City centers full of vacant properties-Adding to Spain's employment woes.
Real Estate agents surviving this current crisis still insist, Spain has a future, but a business that depends on commissions, will always need to be positive to sell a product. And that was what really went wrong with Spain.
Too many Banks, local governments and businesses were dependent on selling the dream, despite the fact the economic fundamentals were wrong. A credit economy, were 100% mortgages were given to people whose salaries barely covered their basic living costs, is not sustainable.
And there are those who still sell the myth of Spain, despite the nations dependence on selling the thousands of empty properties, in a nation facing a population decline with no natural resources and a declining industrial sector.
Spains future lays in tourism, but it competes against cheaper destinations like Bulgaria, Thailand and even Turkey. The National Tourist board want to attract Asian tourists, but forget that Asia also has beaches, and most Asians prefer to visit Cities or places like Bali or Phuket- areas Spain cannot compete with.
Spain's debt ridden economy was a result of corruption, greedy speculators, developers looking for a quick buck, and consumers that believed in the fallacy. An economy were a waiter earning a minimal wage could own two houses, and a new car, is over.
One rosy development in Spain is the nations agricultural sector, which can produce naturally grown citrus fruits, and in colder regions vegetables. But a modern country facing a debt crisis in 2010, faces deflated property prices, and may have to restructure its debts, and re-model its basic economic strategy to survive.
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Article Source: http://EzineArticles.com/?expert=Markus_Taylor