Property prices to go up 10% this year

With Spain having the best economy in the Eurozone last year, property prices are set to increase a further 10% over 2006.
The Spanish economy grew 3,4% last year, while the Gross National Product of the Eurozone increased by 1,3% while the European Union (25 members) was 1,6%.

According to the bank La Caixa, property prices are still set to increase by almost 10% this year due to the relative good value of the Euribor which is the rate by which mortgages are worked out.
With new mortgages coming out all the time this market is becoming very competitive and with more and more people buying in Spain prices are set to continue rising.

Valencia, still being relatively undervalued in comparison to the rest of Spain and the other main cities, has the most to gain. Add to this the improvements being made to the city in terms of culture, infrastructure and the America`s cup and Valencia is now presenting itself as the next Barcelona.

LRAU and LUV: What`s the difference?

After so much debate last year over the Lrau landlaw, we welcome the year with a new law called "LUV". With the new LUV, Townhalls will have to modify their existing general plans to approve any new urban project. Some of the new requirements which the LUV will have to take into account include a landscape study, affordable housing, guarantees of a large enough water supply and allow 10 m2 of green area per resident.

With the main problems with the old law being a lack of information, no fixed costs, short objection times and the unclear plans of what was in place, the new law promises to clarify these points. The solutions proposed by the new law include the following;

PUBLIC INFORMATION

• It is obligatory to warn the official owners of any plans to update any area according to the new law.
• New means of publishing any information have been incorporated.
• Minimum amount of information given out by the builder has been set. ( A clear guideline on what information has to be available to the public )

COSTS and PAYMENT MEANS

• Any benefits to the builder are limited.
• The highest valuation of the land or the lowest cost of the build become the new selection criteria for any building programme.
• Any building work will be auctioned off to ensure the lowest price is achieved.
• Improvements in the form of payments.

IMPROVEMENT IN THE OBJECTION TIMES

• The presentation of alternatives is extended by 1 month
• To opt to pay by land or money changes from 10 days to 2 months

DIFFERENCE IF THERE IS A BUILDING ON THE LAND

• Any land which already has a building on it will be treated differently.

The changes in the law are already in place and so far as we can see there is a marked improvement. It will clearly not be a sigh of relief to many owners (specially in the Costa Blanca) but if you are planning on buying in the Valencia area, contact www.villasvalencia.com to know how best to avoid these issues.

We´ll be happy to hear any comments or questions.