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A year in Spanish property: An expert's view 13/12/2006 00:00
Our property expert Mark Stucklin gives his view on how the Spanish market is fairing as the year closes.
Latest rotten apple: TE Majorcan town of Andratx, scene of property corruption s
COMMENT
The mother of all construction booms is one way to describe the situation in Spain. Construction fever is raging all over the country, but particularly on the Mediterranean coast, the entire length of which seems to be bristling with cranes.
Where is this all heading? It is a disturbing question, because the way in which this construction boom ends could have serious consequences for the Spanish economy.
The Spanish government is frantically talking up a soft landing, and given Spain's healthy level of economic growth this is still on the cards. But it seems obvious to me that the property market in many popular coastal areas will struggle to absorb all the new properties being built.
It's no secret that demand is down, and you don't have to be a Nobel prize winning economist to work out that increasing supply now is unhelpful, to put it mildly.
I expect a market shakeout in 2007 (already underway in some places), and some bitter medicine for all the corruption and speculation that has blighted the market. But at the same time I see some powerful, positive forces at work, which will ultimately restore the Spanish property market to rude health. I also have a hypothesis that quality locations and developments will sail through 2007 relatively unscathed, as overseas buyers get better at identifying quality in the market.
NEWS
New European bank transfer regulations
From the 1st of January 2007 you have to provide a full International Bank Account Number (IBAN) and Bank Identifier Code (BIC/SWIFT) along with the beneficiary name for any bank transfers to EU member countries (and Iceland, Liechtenstein, Norway, Switzerland, Bulgaria and Romania). Failure to do so will result in penalty charges, or your transfer being rejected.
Tourist apartment rip off
In parts of Spain, for example Murcia, foreign buyers are being miss-sold properties that have a special 'tourist apartment' classification. Tourist apartments cannot be used as residential properties, and should be cheaper than ordinary apartments.
The European Commission (EC) has once again warned of the risks to the Spanish economy of a property bubble.
See:
http://www.spanishpropertyinsight.com
Corruption
The wave of real estate corruption scandals in Spain rolls on, with Andratx, in Mallorca, the latest town hall with a corruption scandal on its hands. See:
http://www.spanishpropertyinsight.com/
This topic is also discussed in the forum
'Zero growth' forecast for Spanish property prices
According to Miguel Sebastian, director of the economic affairs in the office of the President, the rising spiral of Spanish property prices has burnt out, and Spanish property inflation will soon hit zero.
See:
http://www.spanishpropertyinsight.com/
For more news:
http://www.spanishpropertyinsight.com/
Mark Stucklin runs the independent website www.spanishpropertyinsight.com and writes on Spanish property for the Sunday Times.
[Copyright Expatica]
[December 2006]
Subject: Spain, Property update
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