Mortgage Rates Finally Going Down

Euribor - the rate normally used to calculate mortgage payments in Spain – has fallen rapidly to the lowest it’s ever been, but average mortgage interest rates used by banks and savings banks to calculate mortgage repayments were still rising as recently as January, new figures reveal.

The average mortgage interest rate in January was 5.64%, an increase in percentage terms of 10.2% compared to a year ago, and 1.1% higher than December 2008, according to data from the National Institute of Statistics (latest figures are for January).

In contrast, Euribor fell to 2.622% in January, a 24% fall from December, and 50% down from October. 12-month Euribor is expected to close March at around 1.9%, the lowest level in Euribor’s 10 year history.

The data shows that average mortgage interest rates charged by lenders have not fallen since October, despite Euribor falling more than 50% since then.

Savings banks are the worst culprits when it comes to hogging the benefits of a falling Euribor. Savings banks charged an average of 5.72% at 23 years, whilst ordinary banks charged 5.63% at 20 years.

Spreads between Euribor – the rate at which banks lend to each other - and mortgage interest rates are widening as banks try to rebuild their balance sheets after years of reckless lending on thin spreads.

These figures square with widespread complaints, especially amongst non-resident borrowers, that banks are not passing on any of the savings from a falling Euribor. The small print on many mortgage contracts is also starting to reveal nasty surprises for borrowers, such as interests rate ‘floors’ below which mortgage rates cannot fall.

Nevertheless, many borrowers on annually resetting mortgage should soon start to see some relief in their monthly payments. If the fall in interest rates is passed on payments on the average mortgage should fall by 25%.

Declining mortgage activity

The number of new mortgages approved fell 43.5% to 53,000 in January compared to a year before. The overall value of new loans fell 52% year on year, and the average mortgage value fell 14.5% to 122,000 Euros. New mortgage approvals have fallen for 19 consecutive months, and are now 20% lower than a year ago.

Sourge: http://www.spanishpropertyinsight.com/

Real Estate Agents Decimated by Spanish property Crash

Of the 80,000 real estate agents operating in Spain in the summer of 2006 just 25,000 are still in business, according to an article today in the Spanish daily La Vanguardia. That means that 70% of estate agents have closed in the property crash, destroying 180,000 jobs in the process.

The bloodletting is not over. Industry experts cited in the article forecast that another 5,000, or 20%, will close this year, leaving just 20,000 in business at the end of 2009.

Many of the estate agents that have closed were ‘chiringuitos’, or one-man bands with no qualifications working with nothing more than a car, a website and a mobile phone. “The great majority of Spain’s real estate association members (API) are still open,” claims Joan Ollé, president of Barcelona’s API association.

Estate agents in Catalonia are expected to have a rough year thanks to a new regional law obliging them to register with the government and take out professional indemnity insurance. Ollé expects the new regulations, which come into force after the summer, to drive half the agents in Catalonia out of business.

Estate agents are being hammered by an 80% fall in transactions since the peak of 2006, a fall in property prices, and the increasing number of developers going bust owing estate agents commissions.

The big chains of estate agents, where a franchise model is common, are suffering as much as any. Expofinques, MC, and Don Piso are all in administration, Fincas Corral was sold for just 1 Euro, and Coldwell Banker, the biggest real estate agency franchise in the world, has abandoned Spain after opening 60 shops. Tecnocasa, the biggest franchise real estate franchise operation in Spain, has gone from 1,400 offices in 2006 to 308 at the end of 2008.

In the meantime, Casamona has been here since 2004 and is still here today to help you find your ideal home. So maybe there is something special about us keeping us in the market today!

sourge:http://www.spanishpropertyinsight.com/

Second home sales to non-residents plunge 59% in 2008

The number of foreigners buying a second home in Spain collapsed in 2008, falling by 59% to a measly 3,691 sales, according to the latest statistics from the Ministry of Housing. Compared to 2006, when non-residents bought 17,212 second homes in Spain, sales were down by a whopping 79%, giving investors a chance to observe how risky the overseas property investment game really is.

Andalucia, home to the Costa del Sol, the Costa Tropical, and the Costa de Almeria, was still the most popular region for non-resident buyers, with 1,415 sales in 2008, down 52% (and 78% compared to 2006).


The Valencian Region was next, with a risible 778 sales in 2008, down 58% on 2007, and 83% on 2006. This latter figure shows how far Valencia’s holiday home industry has sunk in just 2 years. The Costa Blanca accounts for almost all holiday homes sales to foreigners: there were just 23 sales on the Costa Azahar in 2008.


The pain was spread fairly evenly around Spain’s popular southern coasts and islands, but Murcia was the hardest hit by the falling numbers of non-residents buying property in Spain. Sales in Murcia fell by 86% last year, to just 270 homes, whilst the supply of holiday properties built with foreigners in mind, typically on golf courses, continued to burgeon.


Sales fell in the Canaries by 39% to 475, in the Balearics by 51% to 221, and in Catalonia, home to the Costa Brava and Costa Dorada, by 49% to 193.


In Teruel province, once tipped on British TV as one of the top 10 overseas property investment destinations, sales exploded by 150%, rising to a mind-boggling 5 sales in 2008, up from 2 in 2007 (but down from 8 in 2006). Once again the lucky few who bet the house based on what they saw on the telly must have really hit the jackpot.

Sourge: Spanish Property News

Casamona Holiday

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Our new short term rental service helps you spend your summer sunbathing and sightseeing in these beautiful locations. You will have plenty of choice from our high quality flats located in prime residential areas and close to all the attractions of the city centre. Fancy a sunny Sunday walk on Barcelona’s Paseo de Gracia or a coffee by the Coliseum in Rome?

Find all the information you need for that special summer on our website www.casamona.com .

Prices Are falling

Prices for both new and resale properties have already fallen by 40% thanks to a collapse in sales, according to Santiago Baena, President of the Spanish Real Estate Agents’ industry body (API).

Speaking at the start of the annual API conference in Logroño, Baena also said that 50,000 estate agents have had to shut up shop as a consequence of Spain’s property market downturn.
“It’s now a time for buyers, not vendors,” said Baena, in reference to the fact that, in this market, buyers hold all the cards.

An official from the Ministry of Housing reminded participants that property transactions fell by 32% in 2008, whilst forecasting that “the numbers will start to recover in the coming months.”

Source: http://www.spanishpropertyinsight.com/

Interview with Eva

Hi Eva! Who are you? Tell a little story about yourself...

Hi, well, I was born in Slovakia, but I had the feeling to change something in my life so I went to study Marketing Management in Denmark. After being there for a year and a half, I wanted to change country again and I decided to try to find a internship in Spain, when I found Casamona, then I met Tine in Copenhagen and I really liked her enthusiasm when talking about Casamona....And here I am!

What is your Job @ Casamona?

I have been here for several weeks now. I am taking care of short-term and some long-term rentals. I love to communicate with clients therefore I try to organise as many visits as possible. But on the other hand, there are some days that I have to work in the office and it's not too bad. There is always a nice atmosphere.

Why did you choose to come to Barcelona?

Honestly, I was just searching for some Internship in Spain and I had never been to Barcelona...And it was nice change everything what I needed Sun, Sea, the beach and many different people. I really like the spirit of the city.

How do you enjoy your stay in Barcelona and at Casamona?

It is very different compared to coming here as a tourist. I am happy to know Barcelona from the perspective of a resident. All the tourist attractions around the city hide the real Barcelona. I love all the small hidden streets and areas where tourists usually don’t go.

Come on Eva, please... Can you give us a little Insider tip about Barcelona?

Barceloneta. This neighbourhood is so different and is super close to the centre. If you want to see some good bars one springs to mind, there is one in El Born called La Fianna where you can lie and enjoy beer, cocktails and tasty food. One final tip, in the market on Las Ramblas you can find the best cocktail ever, made from fresh fruit in lots of different combinations.

Barceloneta: Living by the Seaside

Barceloneta is an old fishing neighbourhood in Barcelona, revitalized since the Olympic games of 1992 retaining its old and charming character. Walking through the backstreets and small allies of this quaint barrio you have the feeling you are in a small village in the south of Spain. Some parts of this neighbourhood are some of Barcelona's well kept tourist secrets. It has the best beaches, the best windsurfing and the finest fish restaurants. Set away from the hustle and bustle of the city, this quieter part of town hasn't changed much. Women still hang their laundry from the lines, men play board games and swap stories.Barceloneta is the perfect place to.

We at Casamona have some great apartments in Barceloneta. For example we have a fantastically renovated quality flat with two double bedrooms. This modern flat has a "private" terrace with beautiful views over the sea (community owned by three flats). To own this flat so close to the beach and cute cafes is a truly unique opportunity.

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Beautiful Furnished 3 Bedroom/2 Bathroom Apartment in Ciutat Vella

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Residential rents in Barcelona start to fall

After rising 63% between 2002 and 2007, residential rents in Barcelona stagnated, and even fell slightly in the last 6 months of 2008, according to figures from Barcelona’s town hall.

In 2003, the average flat for rent in Barcelona had 92m2 and cost 884 Euros/month. Today, the average flat has 75m2, and costs 1,096 Euros a month to rent. Having broken the 1,000 Euro/month mark in the first half of 2008, rents then fell slightly in the second half of the year.

“Rental prices are falling more than 1%,” says José García Montalvo, professor of economics at the Pompeu Fabra University, quoted in the Spanish press. “Furthermore, in the last quarter we have started to see tenants renegotiating rents with landlords, which doesn’t show up in the statistics.”


García Montalvo says that rents will continue to fall this year, as many people who can’t sell are opting to rent instead.
Juan José Aguilera, head of Comprarcasa, a network of certified estate agents, agrees. “Now everything that doesn’t get sold is put up for rent. The supply of flats for rent exceeds demand, and prices are falling.”


The fall in rents coincides with a wider collapse in the Spanish property market, as Spain goes into a recession of alarming proportions. Property sales in Barcelona province fell close to 45% last year, but the number of new constructions completions fell by only 5% (to 39,964), implying that the inventory of new homes on the market looking for a buyer is still growing. New housing starts, on the other hand, fell by 72%.

Source: Spanish Property Insight