NEWS || Solymar Golf Properties S.L. ||

NEWS

NUMBER OF TOURISTS FOR MAY UP 20 % ON 2006

July 12th, 2007

The number of tourists entering the region for the month of May was up by 20 % compared to 2006, but the same data from the Estudio de Movimientos Turísticos
en Frontera (FRONTUR) shows the national average fell by 1.4 % for the same period.

So far this year, from January to May 2007, the number of visitors to the region was 237,332, above the 205,000 for last year. This increase in numbers puts Murcia amongst the top provinces in the national rankings.

The Minister for Turism, Commerce and Consumers, José Pablo Ruiz Abellán, also reported steady trade in the hotel sector, with room occupancy for the month of May up 8.3 % compared to a slight increase in the national average of only 0.4 %. Again trade figures are good for the first 5 months of the year, the figure for hotel stays up 7.4 % vs
the same period last year. For the rest of Spain, the average increase was 2.7 %, proving that our region is the place to visit!

THE REPORTER (No. 72)

SPAIN STILL FAVOURITE FOR HOLIDAYS

May 17th, 2007

Good news for the Spanish tourist industry as Spain ist still the main holday destination for people in the EU according to figures released by the European Office of Statistics (Eurostat).

Spain had 210 million overnight foreign visitors in tourist accommodation in 2005 which generated 38,494 million Euros for this sector of the economy. In comparison, Italy had 141 million and France 108 million.
Spain, Italy and France had over 50% of the 880 million overnight visitors from the 25 countries of the EU who visited abroad. Most of the foreign tourists who come to Spain come from the UK (33%) and Germany (26.1%). Spain has the biggest share of longer stays of four or more nights with 16.7% of the total with Italy on 9.8% and France 8.3%. In Spain hotels are the most popular form of accommodation with 138 million overnight stays in 2005 and 71 million in apartments and hotels.

According to the data Spanniards spent 12,125 million Euros abroad and Spain earned 38,494 million Euros from tourism leaving a healthy balnce of 26,370 million Euros overall.

THE REPORTER

News provided by www.reporternewspaper.com

OVERVIEW OF THE SPANISH REAL ESTATE MARKET

May 15th, 2007

Some alarming things have been written about the Spanish property market in recent articles like ‘Survive the Costa property crash’ (Sunday Times, April 29), ‘Costas house price crash’ (Times, April 27), ‘Euro helps topple Spanish property’ (Telegraph 25 April), and ‘Spanish property boom ends’ (Financial Times, April 24). Based on the headlines would think that the Spanish property market was in an advanced state of collapse. This is not actually the case.

The event that inspired all these gloomy articles was a share price correction of property companies quoted on the Madrid stock exchange, as jittery investors dumped construction stocks in April. At the time of writing shares of property companies are some 25% below their February highs. One company – Astroc – is down over 80%, though that still leaves it 120% up over 12 months – a great annual investment return by any measure.

The fall in property share prices was overdue and somewhat expected after speculation had pushed up prices too far. Much of the press reporting glossed over the stock market context, giving the misleading impression that it was the Spanish property market in trouble. Of course trouble in the stock market is not good news for the property market, as it reveals increasing pessimism about Spain’s housing market. But falling stock market confidence and property share prices it is not the same as a housing market crash.

In fact, the reality of Spain’s property market’s performance in the last quarter is not as bad as you might think from recent articles, but not as good as the official housing price figures from the Government imply. Spain’s decade long real estate boom is over, and it is a buyer’s market, but it is also a complex situation of regional markets performing in different ways.

Latest figures on the Spanish property market

Average national Spanish property prices rose by 7.2% to 2,024 euros/m2 over 12 months to the end of March 2007, according to figures from the Spanish housing ministry.

The story these figures tell is one of Spanish property inflation slowing down from 18.5% in 2003, 17.2% in 2004, 12.8% in 2005, and 9.1% by the end of 2006. This is the lowest rate of property price inflation since 1998, when Spain’s property boom started. Based on the Spanish government’s figures, it looks like the Spanish property market is on course for a soft landing, in which property prices rise in line with general inflation. At the same time, all areas are still experiencing annual property price growth, and the national average is double the general inflation rate, providing a reasonable return on investment.

By autonomous region property prices rose the most in Ceuta and Melilla (13.8%), followed by Galicia (12.3%), and the least in Madrid (4.5%) and La Rioja (2.6%). Price increases in all of Spain’s Mediterranean provinces were below 10% for the first time in 10 years.

The problem is that the government’s figures have to be taken with a pinch of salt. They can be unreliable, and sometimes show property prices as increasing when they are falling. It is difficult to gather reliable housing price statistics in a country like Spain where under-the-table cash payments are still widespread. When cash payments start to fall, as it appears they might be, property prices recorded on deeds go up, even if transaction prices are falling.

Whilst the government’s figures show reasonable, if cooling, price increases, figures from Spain’s land register show a clear slowdown in transactions during 2006.

The total number of property transactions recorded in Spain’s property register – the Spanish equivalent of the UK’s land register – fell from 989.341 in 2005 to 916.103 in 2006, an annual drop of 7.4% in unit terms.

Resale property transactions fell by 4.97% to 526,509 units (57% of the total), whilst completed transactions on newly-built properties fell by 10.11% to 389,594 units (43% of the total). Transactions fell in Andalusia by 7.3% to 178,189, in Catalonia by 8.8% to 152,802, and by 8% in the Valencian Region to 136,720. These figures show a market contracting against a background of an increasing supply of new properties. The notaries association has announced reported that property transactions in March of this year were 30% down on the year before.

On the question of property asking prices, which say something about the confidence of vendors, figures from Kyero.com show big variations in changes of regional asking prices over 12 months to the end of April. For instance asking prices appear to have increased by 10.7% in Malaga province, to an average of €304,355, but fallen by 12.5% in Mallorca, to an average of €515,000. This would imply that vendors are in the ascendancy in Malaga, but losing power in Mallorca. What is certainly true is that buyers and vendors have to adapt to the conditions of local markets, and negotiate accordingly.

Spanish property market feedback

The government’s figures may not be the most accurate, but they do at least capture the slowdown in the Spanish property market. Information from other sources tells the same story. Real estate consultants Knight Frank report that sales times on the Spanish coast have doubled to between 24 and 30 months over the last 3 years. A study by property consultants Aguirre Newman finds that property prices on the Costa del Sol have fallen by 4.7% over 12 months, though part of this fall can be explained by a trend towards smaller properties. And a report from consultants Grupo I estimates that demand for newly built holiday homes on the Spanish coast will fall by 18.3% to 90,000 properties this year, with the market shedding 26,000 transactions – a drop of 22.4%- of newly built property in 3 years.

To understand what is really going on you have to break it down by region.

COSTA DEL SOL......

MURCIA
Murcia is an ambitious latecomer to the property game. There has been an explosion in the region’s property supply, with 10 times as many properties now being built than 10 years ago, much of it on golf course developments intended for foreign buyers.

In recent years relatively high prices on the coasts to the north and south drove property buyers, especially investors, into the arms of Murcia’s developers, with their easy-to-sell off-plan investments. But Murcia’s prices increased too far too fast, and resale prices on many projects have been coming down in search of demand for the last couple of years.

“Some developers don’t seem to build what British buyers want,” comments Gordon of Blue Med Properties. “When prices rise, buyers expect more in return, so there is now a glut of properties on new developments that don’t match buyer requirements at the price. That’s going to stop prices rising anytime soon.”

There are fewer British buyers around than in past years, though the ones that there are seem well informed, looking for value, and serious about buying if they can find it. Overall, the number of transactions is down, and given the amount of new property coming onto the market, expect prices to remain in the doldrums for some years. The few outstanding developments in the region, such as Hacienda del Alamo, which tick all the right boxes for British buyers, should benefit from buyers who like the region, and don’t mind paying for quality.

Example property price changes over last 2 years:
+ Typical 2-bed flat on coast, fully furnished, in complex with communal garden, pool, private parking now costs was around 150,000 a couple of years ago, now 135,000 Euros
+ Typical villa on a golf course (not front line) 3-bed, 3-bath, 200m2 plot (no pool), was 380,000, now 350,000 Euros

SOUTH COSTA BLANCA.....

NORTH COSTA BLANCA......

COSTA BRAVA.......

MALLORCA.......

Other factors

Interest rates and debt levels

Euribor - the interest rate used to calculate repayments for most mortgages in Spain – now stands at 4.249% after rising for 19 consecutive months. Euribor has risen by 32% in a year, and by over 100% since June 2004. Over 96% of mortgages in Spain are variable rate, which means that rising interest rates have an almost immediate impact on household budgets. At the same time, Spanish household debt has risen from 75pc of disposable income in 1999 to133pc at the end of 2006. Spaniards are up to their ears in debt, and the cost of debt is rising fast. This is bound to reduce local demand for holiday homes on the Spanish coasts, once again at a time when the supply of such properties is increasing.

Spanish housing starts

In 2006 there were 915,745 planning approvals according to Spain’s college of architects. According to the government there were 664,924 housing starts, and 597,632 building completions. In comparison there were 235,360 housing starts and 213,717 building completions in the UK, so Spain is building almost 3 times as many new properties as the UK. For several years now the supply of new properties in Spain has overshot demand for housing, and some 50% of these new properties are located in provinces along the Spanish Mediterranean coast.

If housing starts continue at present levels, the chances of a price crash in the Spanish property market will increase significantly. Both the Pedro Solbes (Minister of Finance) and José Luis Malo de Molina (Bank of Spain’s head of research) have suggested 450,000 to 500,000 annual housing starts as appropriate to meet demand for new housing in Spain, which in theory is driven by demographics, life style changes, holiday home buyers from northern Europe, and immigrants from the developing world. At present price levels, and with interest rates on the rise, it is difficult to see how demand will cope with even the reduced levels of supply suggested by Solbes and Malo de Molina.

Conclusions

The Spanish property market was incorrectly portrayed as melting down after the share price correction on the Spanish stock market. In reality, the overall market is not falling, though some regional markets are faring better than others. But the stock market jolt has help focus people’s attention on the serious imbalances affecting Spain’s housing market.

The big risk to the market comes from over-provision, as Spanish developers build several hundred thousand more properties per year than the market needs. This oversupply is partly due to years of inappropriately low interest rates for Spain once in the EUM.

With the Spanish economy now over-dependent upon the housing sector for economic growth and employment, there is a risk that a much-needed fall in housing starts will bring about a construction-lead recession in Spain. If this happens, demand for holiday homes will be hit hard, and house prices will fall in many areas. But even in this worst-case scenario, attractive properties in desirable locations with foreign appeal should hold their value, and recover quickly as economic conditions improve.

With the Spanish economy growing at close to 4% - one of the highest rates in the developed world – and with forecast growth of 3.7% in 2007, and 3.4% in 2008, it is difficult to imagine a construction-lead recession at present. Without a recession, the Spanish housing market is more likely to stagnate over the next few years than fall.

Having said that, there are many areas up and down the Spanish coast that suffer from a serious glut of over-priced, poor quality, unattractive properties in mediocre overdeveloped locations. Property prices in some areas are starting to fall, and are likely to continue doing so.

Buyers and sellers who wish to take advantage of the situation will need to do their research, keep a close eye on the market, and study local market conditions carefully.

© Mark Stucklin (Spanish Property Insight)
News provided by www.spanishpropertyinsight.com

NEWS FROM THE HACIENDA DEL ALAMO GOLF RESORT

May 12th, 2007

AGREEMENT FOR THE MANAGEMENT OF THE “HOTEL MELIÁ HACIENDA DEL ALAMO”
Hacienda del Alamo takes great pleasure in announcing the beginning of construction on the five star hotel, which will have 154 rooms in total. We eagerly await the laying of the first stone which is planned for the 10th of May.
Armilar Procam has decided to drive the expansion and development of its hotel operation and is entrusting the management to Sol Meliá, a group with recognised prestige and which will be able to use, amongst other factors, their vast knowledge and
appropriate resources to manage the hotel.
Within the scope of Sol Meliá´s management role, they will also manage a building adjacent to the hotel which is going to be a “spa” and which will be approximately 2,000m2.
Sol Meliá was founded in 1956 in Mallorca and at the moment is present in more than 30 countries, with more than 350 hotels. In fact, it is the third largest hotel chain in Europe, and the twelfth largest in the world.

CARTAGENA-VERA MOTORWAY OPENS
The new motorway, an extension of the A-7 motorway, running from Cartagena in Murcia to Vera in Almeria is now open. This new, much awaited motorway runs for 115 kms and reduces considerably the travelling time between Cartagena and Vera, in Almería. Previously this would have taken up to three hours, however with the new motorway it takes approximately an hour. The road is well engineered and you can enjoy the spectacular views of the surrounding mountains and hills. It is estimated that the investment in the new road reaches approximately 600 million euros.
All of the 115km stretch from Cartagena to Vera is subject to tolls and the cost of travelling the whole route from Cartagena to Vera is, at the time of going to print, €11.50. However, there are no service stations yet on the new motorway, so people using it need to bear this in mind, obviously it is possible to leave the motorway at various points if refuelling is required, but this will add a slight increase to the toll fee along with adding to the journey time.
News provided by HDA MAGAZINE, Aprila 2007

BUYERS FLOCK TO HACIENDA DEL ALAMO

May 02nd, 2007

The Oasis pool area

The upmarket resort sold 100 luxury apartments in just 10 days as buyers went on a 27 million euro spending spree. The apartments were the first to be released in The Oasis part of the development. This is a gated community with prices starting at just 185,000 euros. The apartments were launched with prices held for 90 days but they sold out after only 10 days. "It's a sensational success story," said Rafael Ruiz, the resort's commercial director. "We believe this is the fastest sell-out in the history of resort golf property in this area. It was down to customers recognising that this is a fantastic investment at a price that offers true value for money on a resort that is on target to be the very best in Spain. "There may be predictions of a slow down in the property market nationally in Spain but we have bucked the trend and shown that quality, exclusivity and price are the most important factors for purchasers. The Oasis is a ten-hectare development of one, two and three bedroomed homes with its own security entrance and extensive sports and leisure facilities. There will be 352 luxury apartments in total, each with their own private plunge pools as well as access to larger communal pools.

This is the seventh phase of development at the 550 hectare Hacienda del Alamo site. The next batch of 172 apartments at The Oasis is now being put on the market for a limited period with a new price tag. The final group of properties will then go on sale, with prices increased by a further 10 percent. "We believe our strategy has shown buyers great opportunities to invest at a competitive price and see the valuation of their properties rise before the ink is even dry on their contracts," said Hacienda del Alamo's Investment Manager, Aisling Brew. "We can offer purchasers unbeatable payment terms so their exposure for at least a couple of years is relatively low whilst they watch their money grow as the building is completed." Hacienda del Alamo is also to establish a sister resort at Los Altos de Las Palas which will be launched in a few weeks. This is set on the mountainside overlooking the village of Las Palas. "Villas and townhouses for country living will prove a great investment over the 20 month build time," said sales manager, Philip Brockbank.
Written by Sharon Bruce ROUND TOWN NEWS

News provided by www.roundtownnews.co.uk

LA MANGA WON'T DISAPPEAR BENEATH THE WAVES

April 27th, 2007

With increasing media hype and widespread concern about the forecast effects of global warming people in coastal areas may be getting a bit worried about rising sea levels.

According to the doomsayers, sea levels are going to increase substantially putting many coastal areas at risk and even literally wiping some countries on low-lying islands and in deltas off the map.The latest findings of the United Nations Intergovernmental Panel On Climate Change were recently presented in Madrid. The effects of climate change are
already being felt in Europe, said experts. Biophysical systems are changing in response to global warming. In southern Europe there are now more torrential rain storms producing damage and flooding in coastal areas. At the same time droughts are becoming more common and lasting longer. Forests are at high risk from fires. Heat waves have negative
health implications.

The most noticeable impact can be seen in episodes of serious drought. These used to occur about once a century but now it looks as if they will be experienced every 10 years. It seems as if 35 percent of the European continent will be at risk of drought, compared with 19 percent in the past. "Mediterranean type ecosystems are the lands most vulnerable to climate change and will experience the most severe impacts," said one expert. In view of statements like this, some people have been looking with worried eyes at the La Manga strip. This is a strip of sand that runs for some 22 kilometres and which encloses the Mar Menor, Europe's largest inland sea. The strip is covered with homes, hotels and other businesses and at the height of summer a million people can be enjoying the sea and sunshine there. In some places, bathers can take dips in both the Med and the inland sea as the strip is only a few dozen metres wide. Talk of relentless rises in sea levels has led to questions as to whether all or part of the strip might disappear in the future. However, it appears that there is nothing much to worry about, according to one expert. Luis Balairón, a top official at Spain's National Meteorological Service has said that there is no immediate cause for worry. "To talk of La Manga disappearing in 12 years is nonsense," he said.

So, the summer fun at La Manga looks like it will continue. However, Murcia's main environmental worry is likely to continue to be drought. More and more people are moving to the region and water supplies are limited. Already there is heated debate with other regions who don't want to see any more of 'their' water being sent to the thirsty province.
Contributed by Sharon Bruce

ROUND TOWN NEWS

News provided by www.roundtownnews.co.uk

MURCIA GETS A BAD PRESS

April 27th, 2007

Murcia´s image has been taking a hammering in the eyes of many Spaniards recently and the region´s president isn´t happy.

With numerous allegations and investigations going on into alleged development scandals, with accusations of wrongdoing and dirty dealings, Murcia´s press image leaves room for improvement.Things are not helped by the long running investigations into an alleged corruption ring in Marbella. This continues to receive massive media coverage, with tales of racehorses, lottery winnings, fabulous homes and artworks all entertaining readers. Journalists frequently point out that the alleged kingpin, Antonio Roca, comes from Cartagena in Murcia.Recently the regional president, Ramón Valcárcel said that he found it repugnant that the name of Roca should be constantly linked with Murcia.

Spanish TV also has a skewed view of Murcia. Thousands of people enjoyed the recent Bando de la Huerto celebrations in Murcia city with colourful floats and lots of good humour. However, a national TV station only showed broadcast footage of teenage drunks and bad behaviour. A popular TV soap opera has portrayed Murcia as being full of water
thieves, illegally stealing the scarce resource. Golf course developments in the province are regularly slated. President Valcárcel and other local leaders have protested loudly at this image of their region. "Fighting against these injustices is very difficult," he said. A negative image is being created in the rest of Spain and a distorted image of Murcia is being spread he claimed.
Contributed by Sharon Bruce

ROUND TOWN NEWS

News provided by www.roundtownnews.co.uk

back next NEWS

back next

NEWS