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The Marbella Property Market Report – the Rebirth of Marbella ? Perspectives for 2008

One of the oldest and best-known rules of economics is the law of supply and demand: that supply and demand are constantly seeking equilibrium, but when demand exceeds supply, prices rise and when supply outstrips demand, prices fall.

This law also applies, of course, to real estate and partly explains the cyclical nature of our industry. However, in the medium-term, the scales are almost always in favour of purchasers who buy with intelligent criteria, location being one of the key factors: urban land is usually in limited supply and even more so in the “best areas” within municipal boundaries. Cities grow, and those that are popular with higher income purchasers, who identify with a level of quality such as that offered by Marbella, grow even faster.

This is precisely why real estate investment, carefully made with respect to location, price, quality and timing, is and will continue to be among the most reliable and consistent sources of wealth creation. And at the same time, with respect to residential property, such investment can offer a life style that is highly attractive to the purchaser, thereby combining the best of two worlds.

Buyers, nevertheless, should always exercise caution. Newspaper articles may be misleading and should of course not constitute the sole basis for investment decisions.

For example, those who write “market information” articles equating what is happening in the real estate market on a national scale in Spain with that of residential tourism on the Spanish coasts, (particularly the Costa del Sol and Marbella), have ignored one critical, fundamental fact: that what is clearly a bubble and excess in construction nationally (the Spanish national newspaper El Mundo stated last year that up to 60% of the homes built nationally were sold to speculators) is not fully representative of the market on the coasts, which adheres to substantially different market criteria and sources of demand.

Multi-source demand

The critical factor differentiating the Marbella area market from the national market is that the former is comprised not only of national buyers but also, and especially, of international buyers. It is a multi-source market, fed from all European countries and from others even further afield. Thus, when one country’s demand for foreign property starts to drop (which might soon be the case for the British market), it will be replaced by another source of demand (which currently is represented by Eastern European countries and possibly Germany, which is finally beginning what has already been called its “second economic miracle”, after years of economic problems).

Such multi-source demand creates deeper and longer-lasting market stability than would be found in any single-source market, anywhere.

Property speculators

Unlike property speculators on a national basis, most foreign as well as Spanish speculators for coastal investments stopped investing for all practical purposes when the off-plan purchases, inevitably and predictably, ground to a halt in the year 2004, when prices of land and construction reached unacceptable levels, preventing buyers from selling on their speculative purchases to an end-user or another speculator.

The consequent oversupply on the coast of new two and three-bedroom tourist apartments and townhouses under the €600.000 to €700.000 price range, especially in areas which are not consolidated or fully developed, has resulted in a price drop in real terms of maybe 20% to 30% for these types of property in the last three to four years. The same types of property in consolidated areas have seen a smaller drop in price, approximately between 15% and 20%. It is indeed a buyers’ market for this category of property in some parts of Marbella and surrounding areas and, one should note carefully, there are some real bargains now appearing at price levels that may not repeat themselves in future years.

As a result of those off-plan investments cooling down in 2004, many of the original speculators have consequently moved their investments to other countries such as Bulgaria, Croatia, Morocco, Egypt, Brazil, Cabo Verde, Mexico, the Dominican Republic and others that are starting out as second-home destinations. They may well, however, be in for an unpleasant surprise when they find that the construction, in many cases, will far outstrip the supporting infrastructure and necessary services around it, and prices may often be inflated by unscrupulous “get-rich-quick” agents. Those who choose this type of investment should be careful to use agents known for their integrity and long market experience.

Market consolidation

So, what does all the above mean? It means that the end-user is the dominant player in the market today. The pure speculator for lower-priced, off-plan properties has all but disappeared, leading to a market which is presently, in general terms, consolidating and maturing.

The “in-and-out” speculator buyer to a great extent distorts any property market, and the fact that the off-plan purchaser is influencing the market to a far lesser extent today than in the past is a very healthy indicator of a return to more normal conditions than those experienced from 1996 to 2004.

The speculator, however, hasn’t totally left the scene. Instead, he is more cautious and more demanding. The product he seeks has to fulfill key criteria which include: a well located development, good facilities and security, closeness to amenities, quality in design and specifications, etc. And the timing is important: he seeks to invest right at the start of construction, when he can get the best choice at the best price and, today, he might take a more medium-term view of the market rather than a short-term one.

In addition, the last three to four years have seen a general leveling of prices, an integral part of the consolidation process, and there is less volume of sales than in years past. A great part of this lesser volume is a result of less speculation, as indicated above. Another reason, particularly in Marbella, is that there is now much less zoned building land available for new construction due to the delay in the approval of the new General Plan, which has provided a strong cushion of support for the resale market. And, as the market returns to normal after the “boom” years, properties are taking a longer time to sell today than two or three years ago.

The real estate agencies that have made fortunes in years gone by through exhibitions abroad and “inspection flights”, selling new or off-plan properties especially in the lower price ranges, are having a much tougher time today, and some of the smaller and even larger agencies have closed, especially those without great experience in the resale sector of the market. This is a perfectly normal part of a market adjustment witnessed many times over the past four decades.

Higher priced properties still very much in demand

It is worth noting that properties between the €800,000/€1,000,000 to the multiple million range, which are located in the more consolidated areas closer to services, etc. have been maintaining their value extremely well. They are still in good demand by the classic, end-user client and continue increasing, albeit at normal levels, but sometimes even reaching record prices.

The reason for the continued strength in the higher priced properties is that there are very wealthy buyers out there looking for quality homes in quality areas. According to the 2007 Merrill Lynch and Capgemini World Wealth Report, there are 9.5 million high net-worth individuals in the world, up from 7.2 million in early 2003, many of whom are only a short direct flight away from the Costa del Sol and who either already own or wish to acquire a second or third home here. Not only are the wealthy becoming more numerous, but the already-wealthy are also becoming increasingly more so, and there are only a limited number of outstanding, appropriately priced properties in the best areas.

With these clients, as well as the tens of thousands of others who are free of economic worries but do not consider themselves jet-set material (nor do many of them want to), Marbella is very much the place to be, with direct and easy flights from most major cities in Europe, a vastly improved infrastructure compared with years past which far surpasses that of other newer resort areas in the world, a 12-month season with activity of all types in the winter months, and the best climate in Europe, even though it is not as cheap as it was in times gone by.

Moreover, there are sales every single day of properties priced between €2,000,000 and €5,000,000 or more, a market which was virtually non-existent before 1996, as most of these luxurious properties have been built since then. Properties on the beach side of the Golden Mile and in the most consolidated and best areas are very difficult to find, and when they come on the market, at intelligent asking prices, they sell very quickly. Once again, all this goes to show that the age-old rule of “Location, Location, Location” being the three most important words when purchasing property, still holds true.

Recent bad press, already a factor of the past

During the past three years, up until mid 2007, the national and international press have had an orgy of exaggeration and prediction of doom and gloom, deriding Marbella, its surrounding areas and its people due to the unfortunate events and disorder of the recent past, caused by urban planning issues and corruption. The corruption which has been brought to light in Marbella, thanks to “Operación Malaya”, is unique in its magnitude, stemming directly from the enormous demand for properties in this very special part of Spain and the consequent amount of new property development from which this corruption was born and fed.

Corruption linked with politics and city development is not unique to Marbella, but rampant in many Town Halls throughout Spain, as observed in countless articles in the national press: in Valencia province, for example, 31.3% of citizens recently ranked corruption as their most serious problem. Part of this problem is the system for financing Town Halls, which derive between 40 and 60% of their income from different levels of urban development activities, a system devised by the political parties themselves, of course, and a system which must be modified on a national level as an essential first step to reducing and eliminating corruption throughout the country.

Unfortunately, corruption has not been the only issue affecting the image of Marbella. In 1997, then Mayor Jesús Gil made an incredibly unwise decision in raising his political aspirations from a municipal to a regional level. The immediate result was a decision by all of the political parties and their accompanying press of all categories, to destroy him and his party, and Marbella itself fell victim to these politics. Although consensus had already been reached in principle between Gil and the Regional Government with respect to the General Plan of 1998 before Gil’s political expansion, one of the first main steps taken by the Regional Government as part of its anti-Gil strategy was to reject this plan. Had this not happened, the 1998 plan would be in effect today, and most of the building permit problems of the last few years, would have already been resolved.

Very unjust, politically motivated discrimination and maneuvering against Marbella, with the collaboration of the media, has therefore been one of the principle factors negatively affecting the city in the past decade, a fact which many of the resident and non-resident owners have not yet fully perceived in its real light. Fortunately, there is every indication that this attitude has changed with the election of Ángeles Muñoz as new Mayoress of the City, and a new spirit of collaboration has commenced between the City Hall and the Regional Government.

Only 752 units cannot be legalized in accordance with the proposed General Plan for Marbella

Much of the press has clearly enjoyed publishing articles stating that there were over 30,000 illegal homes constructed in Marbella and that many of these would probably be demolished, spawning totally unnecessary public fear and insecurity. The real number is around 19,000. Almost all of the owners of these living units bought their properties with a valid building license issued by the maximum authority, the City Council, almost all are inscribed in the land registry which is the last word with respect to ownership, and many also have valid first occupancy permits.

The press conveniently ignored that third-party end-users who bought properties such as these in good faith, would always be protected by Spanish law, except in the most extreme cases where a solution could not be reached to legalize the property.

Coming as no surprise for many who understand the planning procedures, and the amazingly ill conceived politics promoting public fear and insecurity, it was announced (El Pais, 15/07/07) that the initially approved New General Plan for Marbella, only anticipates that 752 living units will not have the potential of becoming legalized. And of these, one can rest assured that for those which have already been occupied by end-users (377 in all) there is very little question that there will be some fair solution reached protecting those who have purchased in good faith, as already announced recently by our new Mayoress.

What happened to the 30,000 living units which were going to be bulldozed into oblivion? Well, solutions have been found to accommodate them and legalize their situation within the context of the New Municipal General Plan, so urgently required by Marbella, as everyone in the know had anticipated.

New political leadership resulting in the “Rebirth of Marbella”

The new Mayoress has campaigned with great energy for many years to lead Marbella out of its recent political and financial quagmire into a new era. She has met with virtually everyone in the city. She has carefully and meticulously organized and prepared herself and her team, as no other candidate ever before her. She has surrounded herself by top-notch Town Council members of her party and advisors. She has proven herself to be qualified to do the job and easily convinced the people, resulting in sweeping the elections in May 2007, winning 16 of the 27 seats on the City Council.

Muñoz has pledged a policy of total transparency and of cordial relations with her political opponents, which for the moment has produced a very favourable reaction from all parties, and a return to a normal political situation. She has already started cleaning up the city and re-organizing the financial situation she inherited. She will make transparent efforts to safeguard our municipal patrimony and to recover that which was illegally taken away. She is taking many steps to counter-measure the negative public press Marbella has received in recent years. She has welcomed the opinions of both residents and non-residents alike, to help her to do a better and more effective job, and created the organisms to do so with the appointing of one of Marbella’s original founders, Count Rudi von Schönburg as the head of the Tourist Consortium of Marbella.

Marbella is quickly returning to normal, with exceptionally qualified and transparent leadership, which was the necessary prerequisite to do so. What can we predict for the near future?

The new General Plan, at the top of the priority list, should be definitively approved by the end of 2008 or the beginning of 2009. This Plan will protect Marbella from future overbuilding, provide new green zones and service zones, and even the mere anticipation of the new Plan is already bringing the situation back to normal, with a sigh of relief from everyone that we are well on the way to resolving the urbanistic insecurity of the past few years.

There are already new protection laws for our environment, with the POT (Plan de Ordenación Territorial) which coordinates the services and growth along the whole stretch of coast between Mijas and Manilva, in addition to those measures taken in the proposed new General Plan.

Financial order and discipline, already strictly imposed by our new Mayoress, will be the order of the day and, well before the end of her four-year term, solid foundations of financial good health will return to our beloved city. A part of the municipal assets sold in the past in a manner to enrich a few, against the interests of the local community, will be recovered. We will see the city cleaned up, services and infrastructure improved and our city cared for like never before.

The new airport terminal and runway, well under construction, will almost double the airport’s capacity to 20,000,000 passengers a year.

In a few short years, the new planned coastal railroad, with an estimated budget of three billion euros, linking Nerja, to the east of Málaga, and Estepona in the west, will become a reality.

The completion of the tunnel (finally now begun) under the bottleneck of San Pedro, will ease the congestion on the Coastal Road west of Puerto Banús.

The new AVE fast train from Madrid to Málaga will reduce travel time between the two cities to only 2 hours 30 minutes, opening a very viable and very comfortable alternative route of travel to the province.

The oversupply of lower budget apartments in Marbella and the Greater Marbella area will be absorbed little by little between 2008 and mid-2009, and in the meantime, important opportunities will exist in this price range.

The more expensive properties €800,000, €1,000,000 and substantially more in the most consolidated residential areas, will continue to be in demand by those buyers wanting “the best” areas, and for those sellers who price their properties realistically.

Quality will be the key word for the developers of the future of real estate in this area: quality in location, concept, construction and finishing materials, architecture, and special features, with added value given to low-density developments, security, and high-tech living units. The “caring developer” who puts his experience and heart into his project will be the winner. The model of the developer of the past, whose creed was “build them quickly, cheaply, sell them and move swiftly on to the next project” is dead and buried.

There are of course alternative residential resort locations in the world, some of them mentioned at the beginning of this article. However, the important questions one should reflect upon before purchasing property, especially to use part or full time, are as follows:

· Is there a 12-month season with a great winter and summer climate, with sporting and cultural activities of all types, nightlife, superb restaurants, or is it a resort, as most, which is highly seasonal in nature and “rolls up the side walks” from October to May?

· Do quality public and private services exist?

· How about the infrastructure – roads, airports, sewage, rubbish collection, water supply, etc?

· And how about the educational system? Are there international English, German and French schools close by? And are there prestigious universities in the country?

· Are there quality hospitals and health care services available?

· What about cleanliness?

· Are you surrounded by poverty?

· How about one’s physical security? Can one walk around during the day and at night feeling safe?

· Is there a “police state” where sometimes policemen are looking for “tips” or might make problems for you, or do the police respond to civil government norms which protect citizens and tourists alike?

· Is there legal security, or can “rights” given today be taken away tomorrow by the next government in office?

· Is there respect for human and civil rights? Is there discrimination against women, children and workers?

· Is it easy and safe to drive to different destinations nearby as it is here with Gib, Sevilla, Puerto de Santa María, Ronda, Granada, Cordoba and the Andalusian white villages?

· How many direct flights are there from the capitals and other major cities of Europe, and how long does it take to get there?

· Is there any social life, public and private events, concerts, parties, glamour and excitement available, if you want it?

· Are there over 30 easily accessed golf courses in the area?

· Does it offer the protection of the European Union?

Think about it. Marbella offers all the correct answers to the above questions, and much more. Think about the special and relaxed life style here! How many places in the world can match the Marbella of today with respect to the above criteria?

With the closing of the Gil era, and the arrival of Ángeles Muñoz, we are in the process of witnessing the “Rebirth of Marbella”, and exciting times lie ahead for the city and its people. A sharp and clear improvement of its image, finances, infrastructure and public services is well underway. Marbella is now reaching out to realize its true potential, and to consolidate its place as the world class, quality resort destination of the 21st century.

By Christopher Clover

Why is it a Good Idea to Settle for Tenerife Property?

Conduct a simple online search for the keyword Tenerife property and there will be pages full of information about the various properties for sale in Tenerife. Seemingly there are thousands of sellers or estate agents all desperate to attract buyers and thus sell one of their properties in Tenerife. But while there are these many options available and if you’re contemplating an overseas property purchase, is it not important to be clear on the expectations on what a prospective location can offer? The below mentioned details present information about Tenerife, from the property buying prospective, and can thereby help you with the Tenerife property purchase decision.

Tenerife, also referred to as the island of eternal spring, is the largest of the Canary Islands. A four hour flight is all it takes from the UK to reach Tenerife. The region, among various other pleasing facets, offers excellent climatic conditions. With Tenerife weather, there are negligible uncertainties or extremities. Average range is 73OF – 82OF. Summers are not very hot and winters are not very cold. While this fact tempts many overseas investors, Britons are categorically attracted; thanks to the harsh winters and wet summers of UK. Perhaps this is the central explanation for trends which indicate that a considerable proportion of the tourist inflow to Tenerife is from the UK and likewise a reasonable chunk of overseas homeowners of Tenerife property are of British origin. Among the stated, retired citizens are particularly interested in Tenerife property. Call it accessibility, or ease of living, or insignificant language barriers, Tenerife easily pulls attention. But this does not imply that it is just British buyers; with more direct flights operational, Tenerife is gaining attention from buyers and tourists from Ireland, Scandinavia, Germany, Holland and Belgium.

From the charming weather, let’s now shift focus to more materialistic aspects i.e. the business possibilities. Buying Tenerife property implies investing in one of the safest options. Tenerife attracts more than five million tourists every year, which leaves little concern on the possibilities of earning rental income from Tenerife property. The island is well developed and offers many recreational options for visitors including golf, water activities, beach related pursuits and thus for years to come, this aspect is taken care of. Short term or long term letting is also not an issue with the matured Tenerife rental market.

Additionally, Tenerife is presenting a strong case for the property buyers, with infrastructural developments taking place across the island, especially covering the left out regions and areas around golf courses. The government is now interested in presenting Tenerife as the preferred holiday destination. Shopping complexes, hotels, eateries, retails shops, are all are being focused. And thus, the number of tourists to this beautiful island is expected to further increase. No wonder the island secured top slot in the property searches domain on Google.

Another reason to consider a Tenerife property is provided by the falling prices, especially towards the South. Spanish property market has busted and though there are not as significant repercussions of the same on the Tenerife property market, due to oversupply and currency woes, Tenerife property is now available at a cheaper tag. Various independent surveys and group studies have released statistical reports which confirm that the property prices in Tenerife have fallen. The percentage varies with areas, but the range is typically 3% – 6%, and the South has suffered the maximum fall. Therefore a suitable Tenerife property, especially outside the more popular tourist regions, would now ensure a profitable bargain. However, if the idea is to make the most of rental opportunities from Tenerife property, sticking closer to the popular choices would eventually make sense.

Lasalle Say UK Commerial Property is a Buy in 2009

The UK commercial property market has become best value in the world for investment, according to the annual strategy review by global property fund manager LaSalle Investment Management.

LaSalle, believes that so-called “fair value” – prices offering good rates of return compared with long-term bond rates – has been reached.
2008 has been one of the worst years on record for the sector in the UK which has fallen first and hardest across global property markets, making it now one of the most attractive areas for investment, although further modest price falls, are expected. This view contrasts with RICS which has forecast a further 25% fall in commercial property in 2009.

It thinks 2009 and 2010 will be “great years for an offensive strategy because there will be many attractive deals for those with equity and the skills to identify good value”. Australia, Germany and Korea are also recommended.

In the UK they may be right if void rates do not rise above 10%. But if the UK government policy initiatives fail to arrest the deflation of the economy, and more occupiers collapse then all bets are off. Those investors who do come back to the market will have to be equity investors, because it does not look like the banks will be in a position to fund the market, and given that HSBC has completely ruled itself out, there is little incentive for others to provide capital.

About UK Business Property

Whilst there are more than 20 portals covering residential property in the UK the commercial property market remains relatively unserved, with no site having a majority share of the total available commercial property listed. The internet has taken a significantly greater share of all advertising spend each year as it continues to prove that it is the most effective medium for advertisers to reach their audience.

Traditional estate agency methods remain quite successful in reaching the local market around a property, but do not capture leads from the national and international markets at all well. With increasing mobility of populations and business in the global village, it makes sense to expose commercial properties as efficiently as possible to the whole market. In 2006 there were 6 million searches (based on figures from Yahoo Search) made on the internet in the UK for commercial property of all types. Many of these searches will be fruitless as major search engines do not expose many of the available properties at present.

UK Business Property aims to change this by offering commercial agents important incentives to bring all their properties to the whole market. By linking to UKBP agents will bring more traffic to their websites. For agents who do not yet have a fully featured search on their website UKBP offers it’s advanced search functions free of charge, in an easy to implement solution. The advantage is that you keep your visitors on your site and build your brand in your local market, while receiving leads from a national and international audience.

UKBP is committed to supporting agents, with advantageous Agency Terms and a profitable opening offer to it’s Founder Members, who Register and upload their properties before 28th February 2007.

Berlin Residential Property Market – Why Invest in 2008?

The economic environment

The outlook for the German economy is positive and the economic upturn is continuing. 2008 will see a change from purely export driven growth to more growth support through domestic demand. For the first time in years significant raises in salaries are currently negotiated and the consumer climate can be seen as friendly. This will be associated with further reduction in unemployment, as companies are prepared to take on staff. Growth in the economy can be expected to stimulate the German property market.

The Local Aspect

In 2006 the Berlin economy grew by 1.9 % and 7,000 new jobs were created. While the growth is below the German average the increase in jobs and decrease in unemployment is well above the average. These figures reflect that numerous businesses have decided to grow their business in Berlin or set up new offices and branches here. The focus is on media and innovative technology.

The population is stable at 3.4 million after a period of migration in the 1990’s into the newly available suburbs after the fall of the wall.

The German Property Market

Germany has seen a major influx of international capital to its property market over the last 2-3 years with record year 2006 which was considered a record year still being outranked by 2007. The year 2008 is seen by most market players as a year of consolidation. Increasing numbers of institutional investors will become sellers which should offer interesting opportunities for smaller and private investors as it is unlikely that all sales will be in large packages.

The Berlin Property Market

After years of stagnation the Berlin property market started a boom phase in 2006 which has carried on into 2007. Especially international investors have absorbed record numbers of undervalued properties. The turnover in 2006 went up by 50% to a record value of 15.8 billion Euro;. Naturally this has led to a price increase the initial yields of 8 to 10% are no longer achievable in acceptable locations. The yields in top locations are below 6% whereas good locations like Steglitz still produce offers between 6.5 and 7%, many of them with short term development potential (upside).

The new rent table 2007 (“Mietspiegel 2007″) has already shown increases in residential rents. The picture is variable though between stable and increases.

Is it not too late to jump on the train?

No, it is not too late! Attractive property, even at entry level is still coming into the market, with positive cash flow and a realistic expectation for capital appreciation. Careful research is required to make sure the information provided is met by the reality after the purchase. Market knowledge is required or local support is recommended.

Conclusions

The economic situation in Germany is positive with the prospect of a longer period of prosperity. The Berlin property market has three main value drivers:

# Stable population development accompanied by new jobs.

# Long term commitment to the location by the government and international business.

# Still low prices compared to other European capitals with yields that allow a positive cash flow after financing.

With a follow-up article I will provide information about the rent in different parts of Berlin and different types of buildings. You will find this article on the authors website below.

Investing in Property

In real estate, investment is money used to purchase properties for the sole purpose of holding or leasing for income and where there is an element of capital risk. Successful property investment is no longer the preserve of the privileged or wealthy. Anyone can build a property portfolio, as long as they have the necessary skills and understanding. Sourcing out properties that are income producing in high growth areas in different parts of the world is our expertise.

People choose to invest in property for many reasons. It may be to have a regular and steady income stream, to take advantage of the associated tax benefits, or that other investment options are not as attractive. Whatever the reason, property investment is a sound way to secure your financial future in the long term.

We are aware of great value commercial and residential properties for investors in Spain and Portugal. With Europe opening its doors to Eastern countries, there has become an enormous demand for investment property, and http://www.investment-property-uk.org.uk” target=_blank>investment property for sale in Spain is in demand.

Commercial real estate is the owning of a building, be it office, factory or warehouse that is rented at a viable rent. The German commercial property market looks incredibly cheap, particularly compared with the UK.

One of New Star International Property’s first investments was an office block in Berlin’s equivalent of Knightsbridge, where the rent is £9 per square foot. That compares with the £65 per square foot you would have to pay in Knightsbridge itself. Prime Berlin warehouses achieve a typical rental yield of 6.8%, says property consultant Jones Lang LaSalle. In London, comparable properties yield 5%, so investment property for sale in Germany looks to be a valuable alternative for professional investors.

Property Abroad – What’s it All About

What’s it all about?

The past 4 – 8 years have seen a tremendous increase in the interest, purchase and hype of buying a property abroad. The late 90’s and early part of the 21st century has seen house prices surge in the UK to record heights, this together with the ever increasing coverage of the low cost airline destinations has given the average man in the street the excess equity in their existing homes and easier access to be able to think about buying and perhaps living overseas.

We’ve probably all been on a foreign holiday to some exciting destination, be it Europe, The Americas or even further afield and admit it whenever we’ve seen a local estate agent we always make a beeline for their shop window if not to compare the prices to back in the UK then certainly to see how and what we could afford – we’ve been doing it for years without really considering the possibilities.

4 years ago the number of properties owned by people from the UK hovered at around 170,000. Now there are over 1million Brits owning second homes in Spain and France alone, and figures from the Office for National Statistics recently revealed that around 200,000 Britons travel abroad every year in search of buying a property with the intention of staying for a minimum of 12 months.

The main question we at property-abroad.com are asked by investors and holiday home seekers is “where should we buy”? A difficult question to answer because every person’s idea of owning an overseas investment or holiday property is completely different. We have a selection of questions that we ask client to consider when thinking of buying abroad which include:

•Budget – how much do you want to or can you spend. Do you need a mortgage or finance?

•Location – is location important for you? Beach, countryside or town?

•Use – personal for holidays or purely investment or a bit of both?

•Access – is getting to your property easily and cheaply important to you?

•Employment – will you need to work what is the employment situation?

•Schooling – do you need to consider such things as schooling for your children?

•Size – will a one bed apartment be big enough or do you need to consider a 4 bed town house or villa?

•Rentability – is it going to be a necessity to rent your property out to help with mortgage payments?

Although we have over 300 different websites and feature over 50,000 properties for sale in over 45 different countries abroad no two enquiries are ever the same and as such we treat each enquiry on a personal basis. We feature properties for sale directly from local estate agents and developers in every country.

What about the legalities

Buying a property abroad can be relatively straightforward – there’s nothing really complicated as long as you follow instructions and use a reliable legal representative – whether they are from the country concerned or from the UK – it will make you feel more at ease and will help things to run smoothly. We feature various guides and books on buying property abroad on our website and apart from various little peculiarities in certain countries most overseas property purchases can run smoothly.

Mortgages

Financing your overseas property is a lot easier now than it was a couple of years ago. Mortgages for buying property abroad can be arranged through high street banks like the Abbey National, Nat West and Barclays. However, you may need to look at specialist lenders for new and emerging countries like Turkey, Bulgaria, and Croatia etc. Consideration should also be given to obtaining a mortgage in the country that you are buying in – things like euro mortgages can often work out cheaper than UK lenders but be aware of the changing exchange rate. Typical loan to value %’s can range from 60 – 80% depending on the country.

Insurance

As with all major purchases insurance must play a part in your overall budget plan. We would strongly recommend that adequate property and contents insurance is taken out to cover your investment as it grows. Although you don’t anticipate any problems arising with your new home you certainly want to ensure that your investment is covered against loss and damage. Although there are a number of UK based companies that will offer Overseas Property Insurance – you will also find that there are local companies able to offer similar coverage in each country.

Most of us here in the UK are already home owners and there exists a continuing strong demand for our little piece of England. However, there exists a growing sector of young people who are unable to climb on the UK property ladder because of the high cost of entry property prices and as such are entering the overseas property market as a means to secure some foot holding on an emerging property market.

A Place in the Sun – Channel 4’s property programme recently compiled their list of the 20 best places to buy a property abroad for investment purposes. To refresh your memory we have included those destinations below in ascending order from the best to the least projected returns on investments.

Romania – Poland – Portugal – The Baltic States (Latvia, Lithuania, Estonia) – Sweden – Belgium – Slovakia – Sweden – Finland – Hungary – Luxembourg – Germany – Czech Republic – Ireland – Austria Netherlands – France – Italy – Spain – Cyprus

With over 45 countries covered in our overseas property database prices of properties for sale in the areas above can range from a plot of land in the Bahamas from £2000 right up to a country holiday complex in Tuscany for over £33 million. Typical property prices in the likes of Romania stand at around the £10-15,000 mark for a decent property in the outlining areas whereas £5,000 + will get you a rural property requiring renovation and upwards of £30,000 will buy you something very near to the city of Bucharest.

Our Tip

The property market in Poland is our tip for rapid future growth as we consider the country to have the best prospects of all current EU members. There are a huge number of international companies, such as Tesco’s and GSK, beginning to set up offices, shops and warehousing in the country – this together with over EUR70 billion of European funding earmarked for the country over the next 8 years or so can only indicate the anticipated growth in employment, housing and infrastructure. Together with our Polish partners we are currently busy identifying new opportunities within the country and will soon be marketing off-plan developments in Poland throughout our massive infrastructure of websites.

As we become more and more daring in our ventures of overseas holidays then the great British public will continue to conquer new and exciting areas of the globe in which to lay their foundations of a holiday home or indeed a permanent residence abroad. Whatever your reasons are for considering a move abroad then remember there’s only one company out there that can offer access to over 50,000 properties for sale worldwide .

Why Buy Property in Tenerife?

Why buy property in Tenerife?

About Tenerife

Tenerife, the largest of the Canary Islands evolved several million years ago as a volcanic land mass not far from the African Coast. It is the third largest volcanic land on the planet and it boasts the highest mountain in the Spanish domain.

The island, often referred to as the island of eternal spring is a tropical paradise with one of the best temperate climates in the world. It was actually NASA that confirmed this using space observation technique. Temperatures in the low twenties are the norm at that time and even during the summer months the temperatures rarely exceed the high twenties.

The island has beautiful forests packed with exotic wildlife and unique plant life and the scenery is stunning. There are giant cliffs, rugged gorges, and huge mountains including Mount Teide, (3718 metres) which towers high above the most amazing volcanic landscape. Mount Teide was justifiably declared a World Heritage Site by UNESCO during 2007. Sadly many tourists miss out on seeing the most breathtaking scenery because they do not venture far from the coastal resorts.

Tenerife welcomes over five million tourists every year from all over the world, about a third of which come from the UK, the remainder mostly from other parts of northern Europe and Scandinavia. Not surprisingly it is also a very popular tourist destination for the Spanish. The most popular months for visitors are January to March when the weather on the Island is probably the best in the world.

For the many tourists the range of activities is extremely diverse and caters for all ages. There are a number of theme parks and no shortage of things to do, for example, golf, diving, fishing, sailing, submarine safaris, swimming or simply lazing on the wonderful beaches. The new exotic Siam Park will be opening shortly where visitors will be able to undertake a thrilling range of water based activities in an oriental setting.

Despite being around for millions of years Tenerife has only evolved as a tourist destination during the past 40 years. The older ones among you may remember when along with the Spanish Costas it was a major jet set destination. In those days the focus was on budget holidays, mass tourism and like many other holiday places, the image of Tenerife inevitably suffered from the consequences of rapid tourist growth.

Much has been written about Tenerife in the past and there is a wealth of content, although some of it may be a little dated.

Tenerife is changing

In recent years, the Canary Islands Government have concentrated on elevating the image of Tenerife as a tourist destination. Tourist building development has been restricted to new 5* hotels since 2001 and rural tourism has also been encouraged in recent years.

Apart from major infrastructure improvements, the island has been made over with luscious tropical planting in the main resorts, and many new 5 star resort hotels have sprung up focussing on attracting tourism from the higher spending sectors.

Las Americas is not all what it used to be, the plan to attract affluent tourists appears to have be successful with an upsurge of classy shopping complexes with a plethora of designer retail outlets and upmarket restaurants flourishing everywhere. The emphasis seems to have been on excluding the traditional cheap bars and restaurants, the new breed of tourists are after all more discerning.

The new exclusive 5* Gran Hotel Bahia del Duque Resort in Fanabe and the Deluxe 5* Abama Golf Resort, also near Adeje, are attracting well heeled tourists to Island who might otherwise have flown to other exotic destinations. These resorts are of the finest available anywhere in the world.

Tenerife may have managed to attract tourism from the elite spending sector but the clever part is, the enhanced image has increased tourism in all sectors. The new beach in Playa San Juan has just been completed and the older resorts like Los Cristianos have also been given a makeover, so that they are even more popular with the traditional beach holiday maker. The range of activity holidays available now is an added bonus the Island.

The number of low cost flights to the Island has increased dramatically and with just over 4 hours flying time from Northern Europe it has now become one of the most popular tourist destinations for Europeans and Scandinavians.

Tenerife has the advantage of being an all year round holiday island and it offers perhaps the shortest flight to any winter destination offering almost guaranteed sun.

Who invests in Tenerife Property Market?

Current reports suggest there are close on a million inhabitants on the Island and that this has risen dramatically by more than 17% during the past five years. Property ownership has always been popular with the many residents.

There as many as 20,000 UK residents and around 40,000 properties owned by Brits. These figures are not exact and the latter is a conservative estimate based on a number of varied sources. There are also many property owners from other countries such as Holland, Belgium Germany, Italy, Norway and now Russia.

Many people who own property on the Island visit frequently especially the retired who mostly come to Tenerife to escape harsh winters in northern Europe; they are locally referred to as the swallows.

There is a huge rental market in Tenerife, many property owners let out their properties to the tourist market when they are not using them and Tenerife has always been a popular choice for buy to let investors because of the holiday market. There is also a good opportunity for long term letting, perhaps with the advantage of sustaining a little less wear and tear on the property.

Why invest in the Tenerife Property Market now?

Tenerife has been successfully re-invented as an affluent tourist destination and inevitably this has lead to an upsurge of high quality developments being constructed, especially around the lush new golf courses.

There are many off plan developments in Tenerife both in and around the major resorts but now also in less urbanised areas. Many of the older style properties are being refurbished which is a natural progression because there is so much emphasis on quality in the property market.

The resident population is increasing and there is little doubt that Tenerife will become even more popular with retirees, not only from the UK, but also from so many other countries. The numbers of tourists visiting the Island is also set to increase so undoubtedly Tenerife is safe bet for property investors.

Property buyers in Tenerife are not always British or Spanish. The current market has buyers from Ireland, Scandinavia, Germany, Holland, Belgium and now Russia since there are now direct flights.

A recent well known house price index publisher is showing an average annual price increase of 3.2% for the whole of Tenerife. The figures for 2007 show that prices of one and two bed units have increased whereas the price of larger units has actually fallen during the past twelve months, which overall is the reason for low growth.

In southern resorts, notably Los Cristianos, the reality is that prices have fallen to suit the market conditions and anyone who is keen to sell will probably accept a low offer, which is a new trend. The reason why this is happening is because of the less favourable exchange rates for the British investors.

Another reason for the poor property market at the moment is the over-supply of property, particularly in the main resorts in the south, which is leading to falling prices, and this is more obvious at the lower end of the market.

It is fair to say to say that the property market is suffering in Tenerife at the moment, especially with the lack of buyers from the UK, mostly due to the strong Euro exchange rate against the pound. Exchange rates are definitely affecting the property market in Tenerife, especially in the South which is most popular with British buyers.

On the flip side though, most sellers are British anyway and when they convert their Euros back to Pounds they are getting about 17% more than they would have done six months ago anyway, so in real terms they can afford to accept a lower offer. Some sellers are even accepting payment in Sterling to avoid the exchange rate problem, this way most of your money does not have to leave the UK.

In conclusion of all of these factors, we would say that there has never been a better time to invest in a property in the South of Tenerife. There are many bargains around and the sellers if they are British will more often than not try and compensate prospective buyers to assist with the exchange rate problem.

If you need help with raising funds, a variety of options are available. Many people can raise funds against equity which may have accrued on their UK property but we can offer assistance with Spanish Mortgages from a variety of different sources including Abbey (Santander Group) and Halifax Hispania.

As you will see we are offering generous incentives to buyers and we genuinely promise we will help you to pay less. We will also help you with a generous after sales service because we recognise that clients need support with rentals, furnishings, remedial works etc.

We have a larger range of properties available and we can steer you in the right direction. Why not visit our website.

Expedia Property Tenerife

Property Investment in Germany Now!

Economic developments

A robust development in the global economy, strong growth in the Eurozone are indicative of the current macro environment and are the driving forces behind a boom situation that Germany’s economy has been waiting for years. Towards the end of 2006, the German economy experienced its strongest upturn since the New Economy boom in 1999/2000. All significant economic indicators point to a positive growth outlook for 2007 and suggest a sustained economic revival that will not lose its impetus during the following year.

In 2006, the German economy regained its role as the power behind growth in the Eurozone, the vitality of this upturn exceeded all expectations.

The German Property Market is Europe’s biggest with record transactions in 2006. Figures for the first half of 2007 show no slackening in volume.

Despite the high demand prices are still low in comparison to international markets, even the Eastern European ones. The potential for property appreciation is strong.

The rent level is still low and trailing behind the economic development. So buying now offers an upside on the cash flow as a good management can capitalise on the catch-up to follow.

Germany is still currently one of the few major economies where an investor can expect a positive cash flow from property investments.

Why now?

Global property players have been in the market for over two years now and have tied a great deal of their equity. This is where the chance lies for new arrivals in the market. Good investment opportunities require speedy decisions and ready available equity. These factors create a competitive advantage in the market. Equity is the easy part for a new arrival in the market but speedy decisions require market information and knowledge if they are not to turn out as risky or maybe wrong.

There is only one solution to this situation – alliances with trustworthy partners already present in the market with access to off market properties and know-how in their purchase and operation.

What is the best strategy?

Developing the right strategy for the way in and the way out again is key to any investment. The properties need to be selected for the investment period envisaged. The exit strategy has to be clear and the business plan developed accordingly. Whether sale as condominiums or a block of rented apartments, market knowledge of the respective markets is vital for the right purchase decision and the business plan. With the right partners at the starting point a successful and profitable exit after 3 to 7 years, depending on the strategy, is easily achievable.

For more detailed information please visit the website of Berlin Portfolio Ltd or contact the author by clicking on this link: E-Mail

London and Monaco are Europe’s Most Expensive Cities for Residential Property Buyers

London and Monaco are Europeâs most expensive cities for residential property buyers. Prices in the Baltics have risen to the same level as capitals such as Copenhagen, Berlin, Munich, Stockholm, Vienna, and Frankfurt.

High rewards await property investors in some parts of Europe, according to the Global Property Guide, a residential real estate research organization (www.globalpropertyguide.com). Rental yields for apartments in several Eastern European capitals are above 10%.

Rental apartments in Moldovaâs capital city Chisinau can be expected to yield annual rental returns of around 14.13%; in Polandâs capital Warsaw, 13.28%; in Bulgariaâs capital Sofia, 10.56%; and in Slovakiaâs capital Bratislava, 10.06%. The higher risks of Eastern Europe may be a factor in these returns (corruption, political instability, etc).

But risks are not the only factor. The Global Property Guide believes that the relatively recent arrival of the market economy, high interest rates, and relatively undeveloped mortgage markets, largely explain the low prices in the east. To illustrate, it would surely be hard to label the historic city of Bratislava, Slovakia, as a high-risk location, yet the rental income returns are excellent.

Western Europe generally suffers from another, different disadvantage: High taxation. There are high rental income returns to be earned in Amsterdam and Paris (8.25% in both), in Munich (7.80%) and Brussels (7.53%). But all four cities are high tax environments (but so too is Poland).

Property in Prime Central London returns surprisingly high rental yields, at 7.13%. Note that this âPrimeâ category encompasses relatively a narrow group of super-luxury apartments in absolutely prime areas (Belgravia, Chelsea, and Knightsbridge). The high returns in these select super-central locations contrast with the significantly lower rental yields (5.79%) available in Central Londonâs other luxury areas (Kensington, Bayswater, Notting Hill Gate, St Johns Wood, Highgate, Islington, Highbury, and Primrose Hill).

Europeâs most expensive cities

The tiny principality of Monaco is the most expensive location to buy an apartment in Europe at around â¬24,900 per square metre (sq. m.).

Closely on its tail is Prime Central London, where 120 sq. m. super-luxury apartments can cost Â£1,170,000 (â¬1,742,656) or Â£9,750 (â¬14,522) per sq. m. Apartments of 120 sq. m. in other luxury areas of Central London are likely to cost Â£580,000 or Â£4,833 per sq. m. (â¬863,880 or â¬7,199). The large difference is explained by Londonâs highly segmented top-end market, with super-luxury apartments in absolutely prime areas commanding considerable premiums.

Paris and Amsterdam follow London. A 120 sq. m. apartment in either of these cities has an average purchase price of â¬800,000 (â¬6,667 per sq. m.).

Moscow is Europeâs sixth most expensive capital for buyers of residential property. And though apartments in Moscow can be rather rewarding for buyers in terms of rental income returns, investors should be aware of the high risks (purchases are cash-based, and the authorities can suddenly turn hostile).

Dublin makes an appearance among Europeâs most expensive cities in 10th place, with a high end 120 sq. m. apartment on average costing around â¬600,000.

The Baltics, till recently Europeâs hottest residential investment destination, are now expensive. A high-end apartment in Central Vilnius, Lithuania will cost on average around â¬3,792 per sq. m (â¬455,000 for 120 sq. m.).

Latvia follows closely with high-end apartments in Central Riga costing an average of â¬3,020 pr sq. m. Rental yields in the Baltics have also dropped to very low levels.

There are still some very inexpensive capitals in Europe. Berlin, in particular (â¬3,167 per sq. m.), is now experiencing inflows of foreign money in response to its relatively low prices.

Even less expensive are:

Slovakiaâs Bratislava (â¬1,292 per sq. m.)

Polandâs Warsaw (â¬1,175 per sq. m.)

Macedoniaâs Skopje (â¬1,125 per sq. m.)

Moldovaâs Chisinau (â¬917 per sq. m.)

Rental returns cannot fall forever

As 2007 dawns, rental returns are lower in most locations than they have been for 20 or more years.

Nowhere in Europe are rents keeping pace with the continued strong rise in property prices. Residential real estate prices are at historical peaks in almost all countries in Europe, except Germany and Switzerland.

This is cause for concern. At the Global Property Guide, we informally consider a danger signal to be rental returns of around 4% or below.

Several European capitals offer rental income yields around or below this 4% level. In example is Madrid, where rental returns are now at only 3.15%. Rental yields in Monaco are the lowest in Europe at around 2.43%.

See tables at:

http://globalpropertyguide.com//articleread.php?article_id=82&cid=

Property for Sale in Berlin Germany

The German Property Market is Europes biggest with record transactions in recent years. Figures for 2008 show no decrease in volume. Except for the mega portfolio deals the German market has seen property developments in that period, the focus points were Berlin followed by Dresden and Leipzig. Germany could be a good place to invest: you will be buying close to the bottom of a market, which is expected to increase. We have many houses and properties in the German capital including great value http://www.germanyinvestor.co.uk” target=_blank>apartments for sale in Potsdamer Platz Berlin Germany and also in Aldershof and Schoneberg. As only 14% of residents of Berlin own their own home, the rental market for letting condos is extremely high. Berlin the capital of Germany is dynamic, cosmopolitan and creative, allowing for every kind of lifestyle. East meets west in the metropolis at the heart of a changing Europe. Germany’s largest city is a city of opportunities just waiting to be seized in all areas, like entertainment, recreation, economy, science and academic life.

The change that Berlin has gone through during the last decade not only created new city areas, but much needed housing and we have a considerable number of excellent apartments for sale in central Berlin in various districts. Berlin is the largest city in Germany and has a population of 4.3 million within its metropolitan area and 3.4 million within the city limits. Berlin is best known for its historical associations as the German capital, for its lively nightlife, for its many cafes, clubs, and bars, and for its numerous museums, palaces, and other sites of historic interest.

life-in-germany.info

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