Work begins on 30 million Euro house near Marbella

Soon to be the most expensive property in Spian

The credit crunch, apparently, never happened. Petro-dollar billionaires still want to flash the cash in the most conspicuous fashion. And the Bolt Property Group has just broken ground on a 30 million Euro house in the exclusive La Zagaleta estate in the hills outside Marbella.

La Roca del Rey (The King’s Rock), as the property will be known, will be built in one of the most desirable locations in La Zagaleta, says the developer, on an elevated 18,000m² plot (four and a half acres) complete with striking rocky outcrop, looking over the Mayor of Moscow’s pad. The home will be visible from kilometres away.

“We’ve been developing in the five million euro plus price bracket in La Zagaleta for five years and although the estate is head-and-shoulders above any European competition in terms of services, facilities and security – some prospective purchasers have been remarking that the houses just aren’t ‘good enough’,” says the developer Hadleigh Bolt, owner of the Bolt Property Group. “If you have a budget upwards of 20 million Euros, a 10 million euro mansion is sadly going to just feel average. Bolt Property Group has listened to these concerns and conceived La Roca del Rey. This will be the ultimate home in the ultimate location and I guarantee there will be no shortage of people wanting to buy.”

Hadleigh continues, “This residence is for the truly discerning buyer after unique perfection. Doors of the finest Madagascar ebony, a lofty atrium with Frank Lloyd Wright-inspired stained glass and a pristine ten-car museum to admire those top marque toys are just some of the elements which indicate the level of luxury aimed for at La Roca del Rey. And all of this in the balmy southern Spanish climate. Nearby Málaga Airport is less than three hours flying time from Europe’s major cities, has direct flights to Moscow and America’s JFK not to mention a terminal dedicated to private aircraft. You can even land the helicopter on La Zagaleta’s oft-used pad. Everything from the location to the materials used points to La Roca del Rey ranking amongst Europe’s finest homes.”

Arranged over three floors with 4,400m² plus of living accommodation interspersed with bright patio-style courtyards, ten bedroom La Roca del Rey will have many inspired features from a formal piano bar to a double-height wood-panelled library. The lower storey houses a generous 15m x 6m heated swimming pool with separate Jacuzzi and fully-equipped Spa with fitness facility whilst a home cinema sits alongside a wine cellar with a contemporary twist complete with its own champagne bar.

Outside Bolt will build extensive covered and open terraces, multi-levelled landscaped gardens and a substantial infinity-edged swimming pool with floating wooden sundecks. High-tech domotics and parking for 22 cars including that secure ten-car museum layout complete this landmark residence.

Sourge: Spanish Property News

Bank will start lending when property prices stop falling

The president of the Spanish banking association, Miguel Martin, said recently that banks will start lending again when “the fear of a property price collapse” has passed. When that happens, the solvency of buyers will improve as a result, he argued.

Speaking at the recent property sector trade fair in Madrid, Martin explained that “with greater demand and stable prices, or without the fear that prices will collapse, borrowers will see their solvency and collateral improve, and credit will start flowing again.”

At the same event, José Manuel Galindo, president of the APCE developers’ association, drew attention to the role played by banks in causing Spain’s property market slump. He called on banks not to discriminate against clients buying property from developers, accusing them of unfair competition for offering better mortgage financing terms to clients who buy property from the banks.

Sourge: Spanish Property News

Spanish property prices set to fall another 20pc says leading bank

Spanish property crash is far from over, argues BBVA, Spain’s second biggest bank. According to BBVA’s latest report on the Spanish property sector, house prices will fall 10% this year, and 12% next year, leading to overall price falls from peak to trough of 30% by 2012, the year in which the bank expects the market to start its recovery.

According to the eggheads at BBVA who wrote the report, “the adjustment in prices has taken place quicker than expected.” The same cannot be said for the country’s glut of new homes, which the bank estimates at 1.2 million properties, and expects to reach 1.5 million by the start of next year. BBVA’s estimates are significantly higher than the governments; a new report from the Ministry of Housing estimates there are just 1 million new homes in Spain in search of a buyer.

The problem is that, when it comes to prices, the bank’s figures will look to many people in the property business as lagging behind reality. BBVA seems to agree with the government that prices have fallen so far by around 8% in nominal terms, whereas anyone working in Spanish property sales, and lucky enough to still have a job, can tell you it is more like 20% to 30%. Developer associations have also stated that prices have already fallen by 20% (and so don’t need to fall any further).

BBVA isn’t the only bank talking about price falls of 30%. In a new report on European property markets the American bank Citigroup says that it is “only a matter of time” before price falls of between 20% and 30% hit Spain, begging the question ‘but haven’t they already fallen by that much?’ Citigroup expects the European property market slump to last 5 to 6 years, and to hit Spain harder than most, thanks to excesses of Spain’s boom.

The report from BBVA also reveals that the Spanish government is spending 2% of GDP on a stimulus package for the real estate sector, compared to 0.5% in the USA, and less than 0.3% in the UK, Italy and France.

The report points out that falling interest rates and inflation mean households will have more disposable income, which should stimulate demand for housing. However, whilst people are fearful of losing their jobs, and expect property prices to keep falling, demand will remain depressed. Which is why the market will remain in the doldrums until 2012.

Sourge: Spanish Property Insight Blog

Feast or famine for Spanish property market, now glut is biggest problem

A local business school recently estimated Spain’s glut of newly built homes at around 1 million, suggesting that this is the biggest problem facing the Spanish property market today. Now a new report from the Ministry of Housing confirms that Spain’s property glut is indeed monumental, even if it has not yet hit the 1 million mark by the Ministry’s count. But given the rate at which new homes are being finished that figure won’t take long to reach.

Developers, bankers, academics, and politicians all agree that the Spanish property market won’t recover until something is done about the glut of new homes. Unfortunately, that glut just keeps getting bigger.

According to the figures compiled by the Ministry of Housing, the stock of completed but not sold new homes stood at 400,000 units at the end of 2007. By the end of 2008, it had risen by more than 50% to 613,000, confirming 2008 as the year in which the Spanish property bubble well and truly burst.

To make matters worse, there pipeline is still bulging. A lot of the new homes started in the final years of the boom are now close to completion. The Ministry estimates that there are 385,000 homes in the final stages of construction with no buyer in waiting. The way that builders are running out of money some may never be finished, but most will be completed and then join the other 610,000 thousand odd properties languishing on the market in search of a buyer. That means that Spain’s glut of newly built homes will soon be 1 million strong.

How long will it take to liquidate the glut? Last year developers sold 285,000 homes, and if that rate continues it will take 3&1/2 years to get rid of the excess inventory. Some experts argue that a significant chunk of the inventory will never. “Some developments will not sell even in 15 or 20 years,” one real estate consultant told the Spanish daily El Pais. “They will have to be knocked down because maintaining them is too expensive.”

Another problem is that half of the stock of unsold new homes is located on the coast, and much of it was built as second homes, a market that will take longer to recover. Everyone needs a home, but nobody really needs a holiday home.

The report from the Ministry of Housing also identifies a potential problem for the future, perhaps unimaginable at this stage in the cycle. Last year there were just 210,000 housing starts, and this year there will be less than 150,000, largely due to the credit crunch cutting off funds to developers and home buyers. Spain is thought to have ‘normal’ demand for between 400,000 and 450,000 new homes a year, so once the glut has been digested Spain will have the opposite problem – a dearth of new housing.

Feast or famine seem to be the only alternatives for the Spanish property market.

Sourge: Spanish Property Insight Blog

Only 20pc of newly-built properties find a buyer

Standing empty, slowly depreciating, unloved, and unwanted. That seems to be the fate that awaits 4 out of every 5 newly-built properties finished this year, according to an article in the Spanish daily El Mundo, based on the latest housing market statistics.

The problem is that Spain is still building far too many homes. New construction completions may be falling fast compared to last year, down 32% to 107,890 in the first 3 months of the year, but not fast enough to stop Spain’s monumental housing glut from getting even bigger.

El Mundo compared construction completions in the first 3 months of the year with the number of newly-built properties sold during the same period. Whilst 107,890 new homes were finished, according to figures from the Ministry of Housing, just 19,620 new homes were sold, according to figures from Spain’s National Institute of Statistics. That means that, in the first quarter alone, Spain’s excess housing inventory grew by 88,270 homes.

How big is Spain’s new property glut? Nobody knows for sure, but estimates range from 700,000 to more than 1 million new properties. What is for certain is that Spain’s residential construction sector has no hope of recovery until the glut has been dealt with up.

Developer associations forecast that housing starts will fall below 150,000 this year, the lowest figure in decades, and a long way off the 800,000 plus homes started in 2006. In a normal year Spain is said to need between 400,000 and 450,000 new homes, taking into account demographics and immigration. At that rate it would take 3 to 4 years for the market to digest the glut, assuming credit starts to flow again.

Sourge: Spanish Property Insight Blog