A bank connected Estate Agency has reported that ‘due to administrative reasons we have to take these properties off the market until the process of incorporating the property portfolio of their Bank into “SAREB” has been completed. Unfortunately, we cannot give you an exact time estimation for this process’
The government body behind Spain’s so called ‘bad bank’, which was set up to remove negative assets from struggling financial institutions, have forecast that Spanish property prices will not begin to rise again until 2017. FROB (The Fund for the Orderly Bank Restructuring) estimate that house prices will fall for the next two years, then stagnate for two years, before starting to increase at an annual rate of 3% in 2017.
Specifically, the organisation believes that prices will fall by 2.8% in 2013 and 1.5% in 2014 before beginning to rise. They also predict that land prices will follow a similar trajectory, falling by 12.5% in 2013 and 5% in 2014, land then beginning to recover in 2016, but at a lower level than that seen by property, just 2.5% a year. Continue reading
A bank linked agent has been informed by Its troubled bank ‘parent’ that on the 30th of November the developments they were marketing, as many others, were passed over to SAREB (Sociedad de Gestión de Activos procedentes de la Reestructuración Bancaria – better known as the toxic bank).
During the next few weeks of integration and until they receive further notice from ‘their’ bank or SAREB there will not be any finance available or provided by the new owners of these properties.
So, the period of 100+% mortgages on bank property may be past and a large lump of the property overhang is now frozen until the integration is sorted out and new marketing strategies are in place. It’s going to be an interesting couple of months.
Campbell D. Ferguson, Survey Spain Network of Chartered Surveyors
On Monday the Bank of Spain said property loans would be moved into the bad bank at an average discount of 45.6 per cent in the hope of attracting investors. The figure would be 63.1 per cent for foreclosed assets and 79.5 per cent for empty land.
Madrid hopes private investors will own at least 55 per cent of SAREB, which was created as a condition of the European aid for the banks and is due to start operating by the end of November. About two-thirds of the assets transferred in an initial wave of 44 billion euros will be loans and the rest foreclosed properties.
“A large majority will be bad loans and a discount closer to the foreclosed asset price would have been more realistic. I wouldn’t expect more than 20 per cent of the loans to survive.” Continue reading
“In the last five years there has been virtually no value for land,” said Rafael Powley, a Madrid-based director of strategic consulting at JLL. “There are no buyers and if you want to sell it right now, there is no price for it.”
Investing in land or half-built developments means spending money to start, demolish or complete schemes without any guarantee of selling them or finding tenants. Investors are reluctant to do this due to the Spanish recession and excessive supplies of property built up during the boom years.
“The money you need to spend upfront takes you backwards,” said Justin O’Connor, chief executive of property fund manager Cordea Savills, which has about 7 billion euros of assets under management in Europe. Continue reading
London: Spain’s “bad bank” will struggle to find buyers for swathes of empty land, unfinished housing projects and doubtful loans left over from a property crash, hindering Madrid’s attempts to overcome the wider economic crisis.
Real estate consultants predict that almost two-thirds of assets that the government’s newly-created bad bank is due to take over from commercial banks will fail to attract investors, at least in the short term and possibly ever.
Spain is setting up the bad bank, known by the acronym SAREB, under a plan to cleanse the banking system of toxic property assets. SAREB aims eventually to buy up to 90 billion euros (Dh429,7410 billion) of the assets at deep discounts and then sell them to investors over 15 years. Continue reading
52.2%, 47.5% and a whacking 85% are the discounts on original book value that are being demanded by the Spanish ‘bad bank’* for the transfer of new build housing, second-hand housing and undeveloped land respectively, according to a recent Reuters report. These will bring the property prices down to the values that everyone knows are realistic, though perhaps are still not at true market level, as property prices have continued to fall largely due to the actions of the banks themselves as they desperately unload property and provide astonishing finance offers. With banks offering loans at 100+% of their property valuation, what can go wrong? If you’re intending to hold the property and know that you can afford the payments, it makes sense. However, if you’re wanting to sell again anytime soon, you’ll be competing against the banks without being able to offer such generous finance and therefore have to offer at a lower price. In addition, you’ll have the buying and selling costs, which can be up to 20%. Continue reading
In 2018, your property by the beach will be taken from you, demolished and the site left to nature. That was the effect of the original act of 1988 in the spirit of the 1978 constitution, which expressly declared coastline as public domain. It was then largely forgotten or ignored for 20 years until people began to realise that the end of the 30 year dispensation for occupation of the coastal land would be upon them very soon. Obviously, some people with influence were to be affected and so changes to the law are being considered to give the properties at least another 75 years; although they are going to have to pay a fee for that (the country needs the money!). Then it will be somebody else’s problem! Also some areas are less or not affected and, according to El Pais, about 10,000 properties are excluded altogether. The complaints of owners whose properties have already been demolished and neighbours who are being less laxly treated will no doubt carry on for years. Continue reading
It is advisable to make every effort to settle disputes and disagreements out of Court. If that can’t be achieved, it’s the Court that will decide on the basis of the information provided, so the next best step is to make sure that your professional team has a good record, attitude and experience.
With many couples and individuals now owning property all over Spain and it’s islands and prices having changed so much over the past 10 years, it’s not surprising that agreement can’t be reached on market values. So an independent expert has to be appointed. The Court Procedure Rules now encourage the use of a sole joint expert witness, to avoid the situation of multiple values being discussed in Court. Most Courts aren’t keen on discussing numbers! Continue reading
Buying a home in another country is tremendously exciting and there are so many things to consider, from the specific area that seems most appealing to the type of property that would best suit requirements.
Naturally, much must be done to ensure that the purchase is secure, such as checking the property’s legal status, making sure that no debts are associated with it, that the vendor really is the legal owner and that the building is sound, with no structural faults that could prove expensive in the future. Continue reading