DEAL OR NO DEAL

With so many having their say about what is going on in the Spanish property market we would like to join in. Perhaps our view may also be worth something more than those sitting in press offices or television studios in London or elsewhere. For a start we live here, and have done for nearly 40 years and we have a practical knowledge of the property market. We also have seen many fluctuations in the Spanish and UK markets which is a natural phenomenon (as nowhere remains static except perhaps Germany! And even there things are on the move, albeit slowly). What has been extraordinary have been the continuing high price surges of the last few years in Spain. Many properties ended up with a high price tag in relation to their location and quality of build.

So, now at last things are slowing down, or as some would have it – even come to a full stop, or heaven forbid, dare we say it, even dropping!!! We all know about the so called `overbuilding´ in Spain which could be a factor, as well as, the rise in mortgage rates, add to that the `drop´ in foreign buyers as they rush to buy in Estonia, Goa, etc. and there you have it.

Does this mean that those who have invested or who wish to invest here are doomed? Far from it! Since when has property investment abroad been such a short term policy? Yes, it is a shame that the people we saw on the TV the other night (Trevor McDonald Tonight) were upset that they were not going to get back 25%-50% profit on their properties that they had bought last year or the year before on the Costa del Sol that they would have done a couple of years ago. But as always it depends on where and what you buy.

With regard to `overbuilding´ we have all seen the cranes and new builds going up all over the place and we all wonder if they are needed, but bear the following in mind. That in certain parts of Spain there is actually a shortage of housing – Valencia city is one of these places. So, what about mortgage rates? I can remember quite a few years ago (showing my age!) when rates were 16% and people still bought, including foreigners! And as to people moving away from Spain, well that will always be. People come and go, but Spain will always remain the most accessible county for northern Europeans looking for the sun.

I heard today on the Spanish news that a luxury property in Madrid has just been sold for the record price of 17.000 € per square metre! But back to Valencia; on the 25th May, Coperfil a leader in logistics development announced that Valencia needed a 64% increase in commercial development within the next 4 years to keep up with the current needs. The company sees the new port of Valencia as the commercial gateway of the Levante coast. They went on to forecast that the current population of 2 million will reach 7 and a half million in 2015. With the newly spruced up city, and the glamour of the formula 1 set now confirmed, not to mention the soon to come fast train from Madrid, I would say that the future is rather bright for Valencia.

For those of us who are already here our advice is sit it out. If your property is in a good location and reasonably priced, and you can´t hang on to sell, then aim it more at the Spanish market as we have noticed they are still buying. And for anyone thinking of buying then now is the time; our tip would be, if you see a property you like, then go in with an offer and chances are you could be lucky and get the bargain of a lifetime!

Villas Valencia offers Title insurance on your Property purchases.

Through one of the Worlds largest Title insurance companies, we now offer buyers an insurance policy covering you on the ownership of your property.
Safeguard your property investment with a name you can trust.

Title Insurance
Since purchasing property is possibly one of the most significant investments you will ever make, you can now protect it. Insuring the ownership of your property (referred to as “title”) can be just as important as insuring your property and its contents from physical loss or damage.

Title insurance safeguards you against the loss or damages arising from matters such as:

• Someone else owns an interest in or has rights to your Property
• A document is not properly signed
• Forgery, fraud, duress, incompetence, incapacity or impersonation
• Defective stamping or registration of any document of Title
• You do not have legal pedestrian or vehicular access to and from your Property
• There are registered restrictive covenants which adversely affect your use and enjoyment of the Property
• Someone else has an easement over your Property
• Your Title is unmarketable which allows another person to refuse to perform a contract to purchase, to lease or to make a mortgage loan

Without a policy and in some of these cases, you would have to remedy the situation costing you time and possible legal expenses. Ultimately you may still suffer a loss if a court decision does not result to be in your favour. It is now more important than ever to obtain the peace of mind and protection that title insurance provides.

What is the value of the cover?
Title insurance is available for a one-time premium. The Policy is good for as long as you own your property. The amount of cover is normally equivalent to the purchase price paid for the property. Should any improvements be made to the property, The insurers can increase the cover to insure that you’re fully protected for the fair market value of your investment.

How does one apply for a policy?
The process to apply for a policy is simple. All you need to do is complete our online form. Please enquire here: http://www.villasvalencia.com/contactus.htm

How does one make a claim?
You need only provide in writing that you have suffered a loss as a result of a defect covered by the policy. The claims department will then propose the method best suited to resolve your claim. There is no deductible, and a title policy also provides cover for the costs, attorney’s fees and expenses incurred in defending title against a covered claim.

As a UK insurance company, the insurers are regulated by the Financial Services Authority.

For a small one-time premium, wouldn’t you rather obtain peace of mind than pay large sums of money to correct covered title defects?

Young people more cautious property purchasers

It takes the under 30´s on average a total of 130 days to view and finally occupy their property - one month more than the over 40´s! On average the under 30´s will visit 4.3 new constructions before purchase and their priorities are; location, followed by distribution of living space, orientation of the property, conditions of payment, services in the area (published by Observatorio Edival). The over 40´s act more on the spur of the moment and with less consideration of the above. Who said that the young are impetuous!

FOR LOWER PROPERTY PRICES PRACTICE BIRTH CONTROL!

Sr. Eugenio Rodriguez Cepeda (President of the Colegio of Registradores de España) said this week that that the latest tendency to see less first time buyers for properties in large cities in Spain´s interior such as Madrid is due to the effect of the low birth rate of the 1980´s/90´s. It did indeed surprise many that Spain with its once large families of 30-40 years ago went on to be the country with the lowest birth rate in 1980.

Tourist exhibition in Madrid

VALENCIA – FITUR – Europe´s largest world tourist exhibition was opened in Madrid by King Juan Carlos of Spain on 31st January. With 187 countries taking stands in an area covering 89.000m2 there is a lot to see, and judging by the TV news reports it all looks great fun with a real holiday atmosphere. Obviously Spain has a large presence in the exhibition which is not surprising as last year a total of 58.8 million tourists visited Spain, 4.5% more than in 2005 which has broken all previous records with Brits at the top of the list. Valencia has gone all out and put on quite a show with stands taking up 5.500m2 (more than one acre of space)! It was good to hear the King make a special reference to Valencia in his speech regarding how wonderful it is that the America´s Cup will be held here. Of course, we have to remember that sailing is his main hobby!

Multiple property owners escape extra taxes

EAS (Estate Agent Speak): Those of you who have come to settle in Spain and have got to know some of the local people may find it strange to find, as we did many years ago, that most of them are the owners of more than one property. One of our workers had four properties but the others mostly just two! Alot of these properties are inherited or bought for investment and many are not rented out but just left and used on occasion by the owner´s family and friends. This of course means that for much of the time these dwellings are vacant. You also must have noticed the vast amount of building that continues going on and scratch your head in wonderment when the newspapers tell us that there is a shortage of accommodation!
For some time the government has been pondering on how to address this situation and then came up with a tentative solution: There should be an extra tax on every property which is not occupied. This tax could be added to the IBI receipt. What a great solution! All those unable or unwilling to pay the extra tax will release these properties onto the market and therefore put a halt to the excessive amount of building work.
But just a minute, isn´t this political suicide? To make it work the tax would have to bite. And if it did the market could be flooded, and for a left wing government who has a lot of supporters in the building trades those in construction would be none too pleased to be out of work. Also, don´t forget that many of those on the lowest income have a second home!
It therefore came as no great surprise when Sr Solbes speaking of behalf of the government on the 24th January decided against adding any tax onto the IBI receipt for an unoccupied residence as it would be in his opinion too `legally complex´ to decide when a dwelling is unoccupied or not ie. `As in the case of when the occupants are temporarily away for reasons of work etc.´. He went on to state that in his opinion a vacant property is `a legally inconclusive concept´. Sr. Solbes stressed that this was the central government´s decision and that every autonomous region could take their own!

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Valencia Property Prices 2007

The official Spanish property news bulletin stated the other day that Valencia remains the second favourite city for investors in the property market despite the continuing price rises. And while those price rises have been spectacular in 2005 and 2006 we should bear in mind a few of the following facts:

For those who think that Valencia is now an expensive city – think again. The average price per sq. metre in Barcelona is 4.192 €, Madrid 3.870€, San Sebastian 3.807€, and Bilbao at 3,076€. Yet, with all its increases Valencia now comes in as Spain´s 3rd largest city at 2.211€.

The thing is that the above cities also saw price rises, not such spectacular ones as Valencia it´s true but then they started at a higher base level. If the much talked about America´s Cup has been the catalyst for the city´s make-over (and what a make-over, few cities could afford the cost of 500 million euros to secure the cup!) then all well and good as the effect will last long after the Cup eventually sails away and we - the residents – all benefit from a much more glamorous and cleaner city which has finally been put on the map.