Spanish property News

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The Latest Spanish Property News from Kyero.com - Home Updated : How Much Should I Pay for Spanish Property? Question: “I was in Denia this week to see what I can afford to buy in the North Costa Blanca, from Denia south to Albir and I found that property prices have fallen but not enough. Can you give me your opinion as to whether house prices will fall more or have they bottomed?” Answer: As you can see from our analysis of asking prices for property in Denia, prices still seem to be increasing slightly. If you look at a breakdown of asking prices by different sizes of property, you can also see that the increase is pretty uniform in all sizes of property. However, I don’t believe that houses are being sold at these prices – not in any significant quantity, anyway. Most sellers aren’t reducing their asking prices because they aren’t in any real hurry to sell. They’re happy to wait and see and are perfectly prepared to hang on to their property until the market bounces back. If, in the meantime, someone makes them a decent offer, they’ll consider it. They’re more fishing than selling. This is true throughout Spain, not just in Denia. The prices of many new-build properties are reducing, although, not all developers are advertising their discounted prices. In these cases, the best course of action is to demonstrate to the developer that you’re a serious buyers and negotiate hard. You should definitely be prepared to walk away if the developer can’t get close to your target price. For resale properties, you’re definitely looking for a motivated seller – someone on a timeline to sell, for whatever reason. The risk of paying too-higher-price at the moment is simply that. In time, the Spanish property market will bounce back and property prices will genuinely increase and any excess you paid for a property will be absorbed. The problem comes when circumstances change unexpectedly and you don’t have the luxury of choosing the timing of the sale of the property. What price is the right price to pay? Even though the asking prices on Kyero.com haven’t decreased much, you can still use them as a benchmark. For example, last year in Denia, the average three-bed house was being advertised at between €303K and €310K. Assuming these prices were already inflated by 10% to provide some haggling space, these properties were probably actually selling for between €273K and €280K. Now, factor in a 20-30% discount and you’ll be looking for 3 bed properties for sale in Denia between €191K and €224K. Now, just because properties are listed in this search, doesn’t make them a bargain. In most towns, there are good developments and areas and bad ones. This is where your own detailed research must take-over so that you can compile a reliable first-hand opinion of what prices should be in each area. There’s no real way of short-cutting this process – other than to take the risk of paying over the odds. Finally, don’t let the temptation of a bargain cause you to shortcut your common-sense. Always use an independent solicitor and get an independent structural survey completed. Even with a new-build property, a survey makes sense because a builders guarantee is worthless if they’re no longer in business to make good on their promises. Industry ‘experts’ believe that house prices will continue to be suppressed in Spain for a while yet. Some predict a turn-around in 2009, others say it won’t be until 2011. Either way, I think it’s safe to conclude that prices still have some way to move yet. However, this won’t dramatically change the need to continue looking for motivated sellers and developers. Martin Dell, Kyero.com Buyer Beware of Vicios Ocultos A further update on the Spanish Law of Vicios Ocultos, courtesy of Campbell Ferguson of Survey Spain There is no standard contract for selling and buying resale properties, and there could be different ways of trying to avoid the responsibilities of vicios ocultos. Wording of this kind could be added to a sales contract: El vendedor queda exonerado de los defectos/vicios ocultos que pudieran existir El comprador conoce y acepta los defectos/vicios ocultos Unfortunately, in either case, it’s not certain that these would be accepted by a consumer court. Also, when dealing with newly built properties, the responsibility of the developer/contractor/designer is for 10 years for structural defects, 3 years for installations and 1 year for finishes. The clock starts ticking from the date of the final completion certificate, CFO. This is important if a building has remained unsold for some time or if it is being sold again ‘as new’ by an investor. The date of the CFO, (which I understand to be the architect’s certificate and not the first occupation licence LPO), is therefore very important. Remember: this doesn’t constitute legal advice on the part of Campbell or Kyero.com because we’re not qualified to do so. Please use this information responsibly and seek professional legal advice. How Did My Friend Sell His House? Recently, a friend of mine returned to the UK to sell his house after having rented it out for a number of years. To his dismay, he found his house in a sorry state of disrepair and the whole street bristling with ‘For Sale’ signs. A lost cause? Within three weeks, he had a full-price offer and, within two months, the purchase completed without a hitch. Having visited the house a while ago, I know that it was nice – but no nicer than the other 20 identical houses for sale in the same street. Of course, I wrote to him and asked for details of his secret house-selling trick, and last week, I received his reply. I think it’s worth repeating here because it might help you to sell property in Spain – even at the moment. Are you ready to learn his secret? “No tricks, I’m afraid – just a bit of old-fashioned marketing (the real kind: thinking about the market). The estate agent thought that our likely purchasers would be either a first-time-buyer / young couple, or a recently separated woman with young-ish kids. We guessed that either of these would be busy types (couple both working, a singleton with kids to get to school, and a job).” “We also thought that we’d be selling to a woman so we: replaced the kitchen and all the appliances; repainted the inside and outside of the house; replaced all the carpets, reinstated the third bedroom and swept the chimneys. We figured that it would be essential that our buyer be able to complete on a Friday, move-in over the weekend and have the kids ready for school on Monday.” “We left the garden ‘to do’ other than planting some border flowers – which came out on the same day that our recently separated mother with her two kids, aged 7 and 10, moved in.” Technically, my friend didn’t stand a chance to sell his home quickly and at full price because there were so many other houses available (which weren’t selling) and the market was worsening by the day. However, by thinking like a buyer and thinking about the buyer, he was able to make his house the ‘one’ that got sold. If all his neighbours had taken the same approach, there’s every chance that he wouldn’t have made the sale – but they didn’t. My guess is that his neighbours reasoned something like this: “It’s a bad market so I don’t want to invest any more in this property than absolutely necessary. If I get a buyer who’s serious, I’ll take care of the bits and pieces which need tidying-up then.” If I’m right, their attitude of happy mediocrity made my friend’s house stand out like a beacon so that it was the only possibility. In fact, the others probably excluded themselves quite quickly for this particular buyer – under time pressure to complete and move in to a fully functional family home. Now, your ideal buyer will probably behave differently because they’re probably buying a second home. If you’re currently trying to sell a property in Spain, have a serious chat with your estate agent. Ask him or her who ‘normally’ buys properties like yours in your area and for what reason. Get a handle on your pool of potential purchasers – where do they come from, what concerns them, what’s important to them? If your estate agent can’t help you with this – find another estate agent and repeat the process until you’re confident you have a working profile of who might be in the market for your property. Now, that you know what’s important to potential buyers, look for the common themes in terms of what needs doing to distinguish your property from all the rest. It might be some basic decoration, or something to do with the outside space, or whatever. You’re looking for the handful of things that all of your potential purchasers will value. At this point, resist the thinking, “Hmm, I don’t really want to throw more money into this property, especially now when the market’s so bad”. You certainly don’t want to be splashing home improvement money about with abandon but if you’ve done your buyer analysis correctly, these are the tweaks which will allow your property to rise to the top of the pile. Houses ARE being bought and sold – and yours could be one of them. Once you’ve completed the home improvements, make sure that all of the marketing material is updated to reflect these new facts. Take new (and professional) photos, speak directly to the needs of the buyer you have identified. Shouldn’t your estate agent be doing all this FOR you? In my opinion, they should be doing this WITH you – but I’m confident that if you initiate this conversation, you’ll quickly find out whether or not you’re with the right estate agent. Either way, if you actually have a stab at thinking like a buyer, you can’t help but improve the odds that your property will be the one that’s purchased – because most sellers will do absolutely nothing at all – just like the neighbours of my friend – you know, the one who sold his house. One last thing: Reading the comments at the bottom of this article entitled 25 tips to sell your home in a downturn, clearly, the price must be right too. Martin Dell, Kyero.com Retiree Reprieve in Valencia European expatriates in Spain's Valencia region who were under threat of losing free access to healthcare have won a partial reprieve. Restrictions announced last month on the right to state healthcare provision were aimed primarily at non-working expats below pension age. From June 5, foreign nationals not contributing to the Spanish social security system lost their right to healthcare in the region unless they had one of two forms: • the E121, issued to British men at 65 and women at 60; or • the E106, extending access to state health services for up to 2½ years after an individual ceases working. However, the British Embassy in Madrid advised individuals affected to buy private medical insurance. Consternation was widespread because some expats would not have budgeted for health cover before moving to Spain. But greater concern was felt by those who could not get private cover because of an established chronic ­illness, such as heart trouble, diabetes or asthma. The situation broadly ­paralleled that in France last year, when President Nicolas Sarkozy made private insurance mandatory for expat early retirees. The move prompted an outcry from the expatriate community, threats of legal action and diplomatic exchanges between London and Paris. Mr Sarkozy got his way in the long term, but those already in the system were allowed to continue. Valencia too has moved to compromise. It is offering early retirees continued access to its hospitals and clinics in exchange for a monthly ­contribution. Crucially, there will be no discrimination against those with pre-existing­ conditions. In addition, Valencia has deferred implementing the plan until January 15 next year. Anyone holding a health card, or SIP, due to expire before the January deadline will have it extended. Valencia in essence will be running a premium-based state medical insurance scheme for certain expat ­categories, but without penalising sufferers with chronic diseases. The big unknown is the size of the monthly contribution, a premium by another name. However, the British Embassy said it had been assured that the sum would be "reasonable and affordable". The embassy emphasised that expats who had other means of accessing the health system would be excluded from the new arrangements. Its statement said: "Anyone who renewed their SIP card before June 6, 2008 will have the full 12 months' cover until the card expires - eg, if you renewed your card or joined the scheme in May, you will have cover until May 2009." The embassy said the regional government believed that about 1,600 Britons were affected. Chris Barkell, the marketing director of insurer Exeter Friendly Society, which is active in the region, was not surprised by the crackdown. He said many non-working expatriates under retirement age were not contributing to the health ­system and were gambling on using a European Health Insurance Card (Ehic). "They have been on a free ride," he said. "The Ehic is intended to cover emergency medicine only." Full story from telegraph.co.uk Spain Stops Reassurances as Crisis Deepens Spain's finance minister Pedro Solbes has stunned the markets with an admission that his country faces the worst economic crisis in its history as the full effects of the property crash spread through the economy. "This crisis is the most complex we have ever lived through given the plethora of factors on the table at the same time," he told Punto Radio in Madrid, breaking with past efforts to put a reassuring gloss on events. Mr Solbes said the Madrid bourse had suffered an "earthquake", crashing 27pc since the start of June. He blamed the toxic cocktail of high oil prices, the global credit crisis and the sharp slowdown in the key export markets of North America and Germany. The comments follow this week's bankruptcy of Martinsa-Fadesa, Spain's biggest corporate failure. The property developer - with an empire of housing estates, hotels, shopping malls and hotels - collapsed after failing to refinance €5.1bn (£4bn) of debts. The company's demise was a textbook story of aggressive over-expansion at the top of the cycle, driven by high debt gearing. It has €11bn of assets. Mr Solbes has pursued a rigorous "no bailout" policy, saying Martinsa-Fadesa took "excessive risks" and must now face the consequences. He has reportedly clashed with cabinet colleagues, who are now searching for any means to stop the downward spiral in the economy. El Pais reports that house prices crashed by 20pc in the second quarter compared with a year earlier, based on 183,000 completed transactions. The Martinsa-Fadesa collapse has sent tremors through the whole property and construction sector. The share price of giant developer Sacyr has halved over the past month. The two banks with most exposure to the Martinsa-Fadesa are Caja Madrid, at €900m, and Banco Popular, at €400m. Goldman Sachs has issued "sell" recommendations on a clutch of Spanish banks, including Bankinter, Banco Popular and Banco Sabadell, warning that the sharp turn in the credit cycle could prove worse than the recession in the early 1990s. "The consumer is more leveraged today than in any of the previous cycles," it said. The ratings agency Standard & Poor's has not yet taken a decision on whether to downgrade Banco Popular and Caja Madrid. In reality, this is unlikely to be the worst economic crisis in Spain's history. Philip II defaulted on his sovereign debts three times in the 16th century after he bankrupted the Spanish Empire to pay for his Counter-Reformation wars against Protestants. He crippled the Italian banking system in the process - much to the benefit of London and Amsterdam. Full story from telegraph.co.uk Speculation and Spain’s Property Boom A recent article in the Spanish daily ‘El Pais’ illustrates the excesses of Spain’s recent property boom. Using the example of Seseña, a massive new urbanisation of 13,500 apartments in the province of Toledo (Castilla-La Mancha) south of Madrid, the article shows that much of Spain’s recent property boom has been driven by speculation. The developer of Seseña, Francisco Hernando (also known as El Pocero, or Mr. Drains), is now struggling to sell in competition with his previous investor clients, many of whom are offering big discounts to dump their investments. So far only 2,500 of the properties at Seseña have a first occupation licence, and only 750 people live on the urbanisation. But Seseña is just the tip of the iceberg. In the Castilla-La Mancha region as a whole, 123,000 new properties have been built in the last 3 years, of which only 39,000 have been sold, implying an overhang of around 84,000 surplus new properties. That is 2 out of 3 of all new properties built in Castilla-La Mancha since 2005. The number of housing starts in the region has risen dramatically in recent years: 31,000 in 2005, 37,500 in 2006, and 47,500 last year. But during that time, demand kept stable, at around 12,000 sales a year. According to Gonzalo Bernardos, a professor and property sector specialist at the University of Barcelona, speculative developers were banking on rising property prices in Madrid driving buyers further and further away from the capital. “They thought that rising prices in the capital would drive out buyers,” the article quotes Bernardos as saying. “They bought land on the cheap planning to sell expensive flats, thinking that demand would be infinite. Now the excess of supply is enormous.” It’s a similar story on the Spanish coast, where hundreds of thousands of holiday homes have been built for a supposedly bottomless supply of northern European buyers. But this article shows that the problem is not limited to the coast. Full story from www.spanishpropertyinsight.com Investment Banks Look to Spain for Bargains Lehman Brothers and other investment banks, private equity firms and hedge funds are lining up to buy distressed Spanish assets as the steep economic slowdown offers investors big discounts. Lehman has purchased stakes in distressed senior bank debt, the law firm Ashurst said recently, providing a rare glimpse of insight into the normally secretive world of such transactions. The U.S. bank also bought stakes in a defaulted senior bank debt agreement, Ashurst said in a brochure on distressed transactions, in which investors take on parts of troubled companies at a discount. Such deals - not normally disclosed by banks wary of showing their positions - also include the purchase by the U.S. private equity firm Apollo of a portfolio of receivables from two Spanish banks, Caixa Galicia and Banco Popular, according to Ashurst. "We expect more nonperforming loan sales to follow," José Christian Bertram, a partner at Ashurst, said at a presentation to investors about Spain's distressed market in London last week. Lehman, Apollo and Carval all declined to comment. Spain has become the center of focus for Europe's restructuring bankers, such as Rothschild, Lazard, Houlihan Lokey, Goldman Sachs and Cyrus, eager for business after years of dearth in distressed deals. "We think Spain is going to be a very interesting market for opportunistic players," said Antoine de Cockborne, an associate at City Property Investors. "This is the start of a very difficult situation. It will hit the bottom. We're looking for discounted assets." The Spanish economy is faltering after a decade-long boom that saw house prices almost triple. Spaniards who borrowed against the rising value of their homes to buy cars and second homes are struggling to pay their bills. The global credit crunch and record oil and food prices are squeezing Spanish consumers and forcing local shops to close down. Empty stores with "for sale" signs have become a common sight around the country. Investors in distressed debt are also looking at firms such as Cortefiel, a clothing retailer bought by the private equity firms PAI Partners, CVC and Permira in 2005. Its debt trades at about 50 cents per dollar. Retailers and service providers face tough times as customers leave unpaid bills. Investors may buy the bills for as little as 10 percent of face value, offering those who risk it an attractive yield. Bank of America and WestLB bought a portfolio of receivables from Vodafone in Spain worth €190 million, according to Ashurst. But chasing assets in Spain can be harder than investors think, because servicers - agents in charge of recovering debts - are not as sophisticated as in other countries, said Juan Hormaechea, a partner at Ashurst. "The services market in Spain is underdeveloped; they are slow and not used to mortgages," Hormaechea said. "Some buyers buy portfolios without knowing that the servicer will become the bottleneck." Prices are another barrier, as distressed assets may have to fall still further to attract investors. "At the moment, we have more sellers than buyers," Bertram said. Full story from www.iht.com Bin Ladens Retreats as Spain’s Property Slump Bites The number of 500 Euro notes in circulation in Spain, known locally as ‘Bin Ladens’, has declined in line with the Spanish property market, suggesting a quirky gauge for measuring activity in the Spanish property market. Locals call 500 Euro notes ‘Bin Ladens’ because, when the Euro was first introduced, everyone had heard of them, but nobody had actually seen one. That didn’t last long. At the height of Spain’s property boom, you were far more likely to see a ‘Bin Laden’ in Spain than in any cave on the Afghan-Pakistan border. By last July one quarter of all 500 Euro notes were circulating in Spain, despite Spain issuing fewer of them than any other Eurozone member when the currency was first introduced. Nor does the size of Spain’s economy justify the presence of such a large proportion of the Eurozone’s highest denomination note. So why so many ‘Bin Ladens’ in Spain? Because corruption in the property sector, along with a popular practise of paying for property with cash under the table, creates a lot of demand for high-denomination notes. ‘Bin Ladens’ make it easier to handle large quantities of cash, converting them into the currency of choice for bent town hall officials, money launderers, organised criminals, and fast buck property speculators, all of whom piled into Spain’s property boom. But since last July, 4 million ‘Bin Ladens’ have dropped out of circulation in Spain, according to a recent article in the Spanish press. This has coincided with an alarming slump in the Spanish property market, and a government clampdown on town hall corruption. In the absence of reliable Spanish housing market statistics in Spain, you could do worse than look at the number of ‘Bin Ladens’ knocking about. Call it the Spanish property market ‘Bin Laden’ index. Full story from www.spanishpropertyinsight.com The Wisdom of Four Years of Spanish Property News This week, I received another comment on my original Vicios Cultos article. Just as I mangled the 'ocultos' part, it seems I also corrupted the translation of ‘vicios’. Thanks to Roger Cooper who kindly set me straight (again) with these words: “Vicio does, of course, have the same primary sense as English/French ‘vice’. But, in context, the meaning can be quite different. Just as our ‘vicious’ has moved away from any strict link with ‘vice’, so, in modern Spanish, ‘vicio’ can mean simply ‘defect’, ‘fault’, with no suggestion of moral turpitude." "A speech defect, for example, is ‘un vicio de diccion’, without any suggestion that, say, a stammerer is immoral. It even has an ironic slang meaning, so that ‘de vicio’ usually means ’’brilliant’, ‘phenomenal’, just as ‘wicked’ does in our young people’s slang, without any suggestion of evil” Phew, it’s good to finally get that moral turpitude out in the open. With this 190th newsletter, we’re getting close to the 200th issue of Property Pulse – hard to believe I’ve been sending this out for almost four years now. The actual 200th issue is scheduled for October 21st – due to the summer holiday break. It’s interesting to take a quick look back on four years of news articles. For example, there were very clear signals a long time ago that the Spanish property market was all set to change. As early as the middle of 2005, we had good cause to suspect the hype around the property market boom. Also in mid 2005, the Valencian Land Grab Law was all set to disappear. To be fair, the name of the law has changed but we’re still suffering from some underhanded behaviour in that region of Spain as this long list of articles demonstrates. It was in early 2006 that corruption in Marbella first hit the news. Even though that particular location seems to be addressing its issues, it is, of course, still coping with the fallout from that spate of publicity. Just last month, a similar set of circumstances hit the news concerning Estepona – just 20 minutes down the coast from Marbella. Still on the subject of illegal building and corruption – this time in Catral, it’s easy to see how today’s story is linked to similar articles stretching back to the middle of 2006. The perspective I gain from this quick excursion down memory lane is that it will take a while yet for Spain to clean up it’s image – at least as far as property is concerned. Despite moves to operate more transparently, Spain’s system of funding local councils via the process of granting building licences is doomed to perpetuate the current cycle of corruption. Similarly, the election process in Spain often places opposing political parties in power at regional and local levels. When a regional government instigates a witch-hunt into corruption at the local level, it’s a safe bet they won’t be concentrating on towns where their own political party is in office. Long term, I am optimistic that Spain will get the better of these vices and defects in their political and legal machinery – because they are doing more than simply paying lip-service to the ideals of transparency. Now that its property market is taking a beating, this would be an ideal time to push through new legislation to systematically eradicate corruption and inefficiency in the housing system. I’d increase tax revenue with a massive clamp-down on black money deals. This would also produce a core of believable data about the actual value of housing in Spain. With less money changing hands illegally and an official handle on house prices, my guess is that the market would recover more quickly and more predictably. In the meantime, don’t think of Spain as the accident black spot of Europe – it’s not, not by a long stretch. The issues Spain is tackling are the same in all ‘developing’ countries – they take years to solve and move beyond. If you’re thinking about buying property in Spain, use an independent lawyer and an independent surveyor, take your time and do your own homework. This approach was true 4 years ago – and it will probably still be true in another 4 or 40 years from now. Let’s hope by that time I’ve found something new to write about in Issue 2,000 of the Kyero.com Property Pulse Newsletter. Martin Dell, Kyero.com Catral Illegal Homes Remain The municipality of Catral, in the Vega Baja region of the Valencian Community (South Costa Blanca) is infamous for its problem with illegally-built homes, 1,300 of which were built and sold to Britons and other foreign buyers between 2000 and 2007. The problem was so bad that 2 years ago Valencia’s regional government suspended Catral’s urban plan as a first step towards sorting out the town’s urban planning chaos. But now, almost 2 years later, the Spanish press reports that no further progress has been made, and owners of illegally built homes remain trapped in legal limbo. The town hall, now run by the right of centre Popular Party (like the Valencian Government), can at least point to some evidence of an effort to address the problem. Over the last couple of years it has drafted 4 urban plans, 3 of which were rejected, and the latest of which will be considered by the Valencian government this month. The Valencian government, on the other hand, has done nothing other than issue 217 charges for urban planning infractions. Aurelio David Albero, Catral’s Mayor, is confident that the latest plan will be approved, but has no idea what it will cost. “Whatever it costs [to legalise homes], our objective is that builders, developers and owners will foot the bill, but not the owners of legal properties, nor the farmers that have kept out of the urbanisation business,” Albero told the Spanish press. Albero also admits that illegally built homes are a burden on the local economy. “They are owned by residents who don’t pay any taxes, but who enjoy services such as rubbish collection, postal services, health and education, all of which has pushed the town hall into debt of 1.8 million Euros.” Whatever the final cost of legalising homes in Catral, that end appears as far away today’s as it did 2 years ago. Full story from www.spanishpropertyinsight.com Expats Hit With New Demolition Orders in Almeria Expats are facing the demolition of their homes in the latest town planning scandal to hit Almería province. Around 19 properties, all lacking building licences and first habitation certificates, are facing the bulldozers in the El Fas district of Cantoria. Although the case has been going through the courts for almost two years residents only got to hear of the news late last month when they were served with a summons to attend the Justice of the Peace and were asked if they wanted to take part in proceedings against the accused. The public prosecutor says the builders sold the properties to third parties despite knowing they had been built on non-urban land and without permits. He also reminded the judge that a court had ordered a halt to construction work in June 2006. Acting on behalf of the government, he asked for the houses to be demolished and for the expat home owners to be compensated. Expats are claiming the local mayor, Pedro Llamas García from the right-wing Partido Popular (PP) party, and the solicitors who initially represented them, repeatedly assured them that the properties were all legal. An expat spokesman for the Cantoria Residents’ Association, who wished to remain anonymous, said they had been “led up the garden path” by builders, solicitors and the council, and suggested the latest scandal could be the tip of the ice-berg. He said: “Around 200 other properties in Cantoria are going to be in the same position. We bought in good faith and it turns out we were lied to and defrauded by everyone.”He added bitterly: “We were viewed as sheep ready to be fleeced.” At the centre of the case are two individuals accused of fraud. Defendants Karen Smit and Julio Piñeiro, who are named as the developers of the El Fas complex, have been charged with selling illegal properties. If found guilty the two could face up to two years in prison and fines of up to 22,000 euros each. The charges are the result of an investigation in 2005 by the Guardia Civil’s environment protection branch, Seprona. Costa Almería News has had access to court documents related to the case dating as far back as 2006. Giving evidence at a preliminary hearing, Ms Smit admitted the homes in El Fas had been built without a licence. Sr Piñeiro, also giving evidence, said he spoke to “some people at the council who verbally agreed to the construction of the homes” and that ‘taxes’ had been paid. In a further twist, Ms Smit is also the partner of Daniel Poetsema, who appeared seventh in the list of candidates for the PP at the last local elections and who is allegedly behind the sale of the properties. Controversially, Mr Poetsema signs himself as deputy mayor in all correspondence to expat residents, even though he is not a member of the ruling council. Mr Poetsema has led an intense campaign to try to reassure the troubled expat community that “there are no illegal buildings in Cantoria”, claiming the area is exempt from town planning restrictions imposed by the Junta because of a local by-law. However, a legal source consulted over this matter dismissed Mr Poetsema’s claims as “rubbish”. In another development, PP mayors and councillors from 18 municipalities, including Cantoria and Partaloa, meeting this week to discuss town planning scandals in Almería claimed they were being targeted by the socialist-led Junta for belonging to an opposition party. In a statement released after the meeting, the PP said the Junta “only applied the law strictly if the council had a different colour to the Socialist party (PSOE)”.Neither Mr Poetsema nor Sr Llamas García were available for comment. Full story from Costa Almeria News Eco-Friendly Homes Popular in Spain Mass urbanisations and high-rises are becoming less popular as buyers search for environmentally conscious homes. The maturing of the Spanish real estate market and movements made away from mass urbanisation and high-rise property development may well be impacting negatively on the rate at which such formerly constructed accommodation is being sold, but in direct parallel it is having a positive effect on the quality of homes being constructed for the lifestyle market. The Spanish property development frenzy of the last decade that resulted in massive resort-style developments being constructed for those who wanted an accessible holiday apartment in the sun, or an affordable fly-to-let investment purchase, are proving less popular these days as other property markets open up and offer a more affordable choice buyers. Meanwhile, the evergreen and enduring appeal of Spain as a stunning, tried and tested lifestyle destination for retirees, relocating expatriates and those in search of the good life means there is now an emerging trend in those wanting to buy quality Spanish property. There has been a sharp and direct increase in consumer demand for homes in Spain constructed in an environmentally conscious way, for property for sale away from resort developments and for properties that allow buyers to truly realise their dream of living an idyllic lifestyle in a fantastic overseas destination where the natural landscape, fabulous climate and excellent quality of life that they are buying into are enhanced by a spacious, well-constructed home, located in an appealing destination. This in turn has led to new areas of Spain becoming popular with those who want to buy into unspoiled regions where local government laws and policies have protected the natural landscape. One such area of Spain especially popular with buyers seeking the good life is Murcia. Planning laws define different zones in order to protect the pine forested mountain ranges and the vast majority of areas around them. If developers are looking to build urbanisations there is an abundance of land which is designated for this purpose. This land is typically near to towns, cities and motorways. As you head towards the stunning national parks the zoning changes to extremely low density so you can only build one property per five acres of land. The idea behind this intelligent approach to planning is to avoid the mistakes made in other parts of Spain, maintain the natural appeal of the region, and preserve the beauty and attraction of Murcia for generations to come. Mike Hamilton, managing director of local real estate agency Casas de Lorca comments: "Many developers are missing the very real point that increasingly consumers require environmentally-conscious homes with such things as solar power, eco-friendly water conservation methods and where the environment into which they are moving will remain unchanged and unspoiled. "They want spacious properties with large gardens, they want these properties to be built in areas of outstanding natural beauty and they are not willing to compromise. "For the developer astute enough to recognise this demand and sympathetic and intelligent enough to embrace government policies rather than try to avoid them, there is great opportunity to be had in terms of constructing fabulous real estate in an ethical manner that is hugely sought after.” Some properties in the region come with a five-acre plot of land, allowing purchasers to become virtually self-sufficient if they want to. Additionally they have almond trees or vineyards which reduce CO2 and also enhance the natural habitat for flora and fauna. Solar energy hot water is becoming increasing popular, as is solar pool heating. Full story from www.homesworldwide.co.uk Spain Property Market More Transparent A bit of good news for once. The Spanish property sector has made some progress towards cleaning up its act, according to the latest bi-annual report on real estate sector transparency published by Jones Lang LaSalle, an international property consultancy. In the 2008 edition of Jones Lang LaSalle’s Global Real Estate Transparency Index, which measures corruption in real estate sectors worldwide, Spain has risen two place from 18th in 2006 to 16th today. As a result, Spain is now rated 10th in Europe, and 16th in a world ranking of 82 real estate markets. Corruption is not the only variable measured by the index, which also takes into account other factors such as legal frameworks, respect for private property, levels of professionalism, and the availability of reliable market statistics. The improved availability of information, plus greater professionalism in the Spanish property sector lie behind Spain’s rise in the rankings. The Index, which Jones Lang LaSalle says provides a rigorous framework for comparing the level of real estate transparency across world markets, shows that nearly half of the countries surveyed in 2006 demonstrated a significant improvement in their transparency score two years later. “Transparency levels globally are improving as governments seek to streamline regulatory and legal hurdles to aid cross-border movement of capital and corporate facilities,” says a press release from Jones Lang LaSalle. “Only Venezuela posted a lower transparency score this year compared with 2006, principally due to changes in government regulations and new taxation policies targeting foreign investors.” In keeping with historical results, Anglo-Saxon real estate markets remain the most transparent in the world. Top of the ranking are Canada, Australia, the US, New Zealand, and the UK, in that order. Full story from www.spanishpropertyinsight.com Do Brits Still Want Property in Spain? British consumers are still keen to buy property in Spain, even if the current market conditions are forcing them to delay their purchase, an industry expert has said. Mark Stucklin of Spanish Property Insight explained that there was still demand for property in Spain from people in the UK and some were even using the current market conditions to their advantage. He explained that the recent reports about the failure of the investment market in some parts of Spain had put an end to the phenomenon of "speculative herd buying". Instead, people who genuinely wanted to own a holiday home in the country were "doing their research". "There are still people with money who want to buy in Spain for their own reasons, and if they’re going to buy they’re going to use this market to get better quality and they can now buy at a better price than in the last few years, so in a way they are already getting better value," Mr Stucklin added. In particular, the expert suggested that people were still considering "the posh part of the Costa Brava, the northern Costa Brava, [and] the Balearics in general" as places to buy in Spain. Full story from www.moneyhighstreet.com Vicios Ocultos - Part 2 Last week, I mentioned the Spanish law of Vicios Cultos – and got a fair bit of feedback about it. Embarrassingly, I mangled the real title of the law “Vicios Ocultos” – meaning “hidden vices”, with my “Vicios Cultos” – meaning “cultured vices” – a rather different meaning. Thanks to those who set me straight. I also heard from a property buyer for whom the law could be extremely useful: “I have just bought a small Spanish house which could be described as a ruin. I was told by the agent that the cracks in the wall were nothing and could easily be fixed. The day I purchased the property, a renovator caught up with me and said there were urgent repairs needed in the basement and also the roof required propping up and fixing. I paid him €2000 to do so. I then sent a man who took a structural engineer with him and yesterday I was told it is positively dangerous and should be pulled down. The so called work done was just a patchup job.” Clearly, in this case, the buyer should examine the contract of sale to see if the “sold as seen” clause was included – something for a lawyer to decide. If not, and if the purchase was made less than 6 months ago, they may have a claim under the “Vicios Ocultos” law against the seller for compensation or a full refund. With the benefit of hindsight, a safer course of action would have been to engage the services of a structural engineer before completing on the purchase. This advice seems so obvious yet most people skip this step when purchasing property in Spain (I did too). Jeff Greensmith of Fincas Direct emailed me to say that he always advises buyers to have an independent survey done. Every town or village has at least one municipal aparejador/arquitecto tecnico who will do so for a relatively low fee. Just as it makes sense to use an independent lawyer to represent your interests in a property transaction, it also makes sense to use an independent surveyor. The cost of being diligent in selecting and engaging these professionals before completing the sale will vastly outweigh the time, expense and hassle of attempting to rectify a problem afterwards – even if the law of “Vicios Ocultos” is applicable. Martin Dell, Kyero.com Blogging Software asdfasfd