Euribor still going up, mortgages getting
dearer
Euribor - the rate used to
calculate interest payments for most mortgages
in Spain – has finished the month at 3.313%,
down fractionally from 3.318% at the start of May.
However, the monthly average – the rate used
to calculate mortgage repayments – rose from
3.221% in April to 3.308% in May (to be confirmed
by the Bank of Spain). This implies that borrowers
with variable-rate mortgages will be facing higher
mortgage payments.
Meanwhile the National Institute of Statistics has
released figures showing that the average Spanish
mortgage value granted in February was 134,612 Euros,
up 11.66% in a year. The most expensive mortgages
are sold in Madrid, Catalonia and the Basque Country,
whilst the cheapest are found in Extremadura, Asturias
and Galicia.
Also in May the European Central Bank (ECB) released
figures showing that the average interest rate paid
on mortgages in the Euro Zone rose from 4.16% in
February to 4.23% in March (mortgage of 5 years or
more).
President of Andalusia announces demolition of
illegal hotel
Manual Chaves – President of the Regional
Government of Andalusia – has announced that
a hotel built illegally in the natural park of
Cabo de Gata, Carboneras, will be demolished and
the land returned to its original state. Also in
May, the administrators of Marbella’s local
government sealed off another illegal new development
of 181 properties and garages in the area of Elviria
Sur, developed by the company Moleón. The
courts ordered the developer to stop building as
far back as 2004.
One third of tourist prefer private accommodation
over hotels
The Spanish daily ‘El País’ reports
that almost one third of the 50 million tourists
who visited Spain in 2005 stayed in private accommodation
such as holiday homes or rented properties rather
than hotels. This represents an increase of almost
double on a decade ago. Of the 770,000 properties
started last year, 110,000, or 20%, are expected
to become holiday homes, rising to 150,000 by the
year 2010, half of which are expected to be bought
by foreigners, principally British and Irish buyers.
Foreigners buy 70% of properties on the Spanish
coast
A new study by property consultants Aguirre
Newman finds that foreigners now account for 70%
of demand for properties on the Costa del Sol,
with the remainder bought by Spaniards. The report
also identifies increasing competition from ‘emerging’ Spanish
regions such as Almeria and Murcia, not to mention
other countries such as Bulgaria and Croatia, which
enjoy significant price advantages over to the
Costa del Sol. The report reveals that, whilst
the growth in the number of new properties on the
Costa del Sol has fallen to the lowest level in
5 years, sales have also stagnated, especially
in Marbella and its surroundings, where high prices
and corruption scandals are driving buyers away.
Spain’s real estate boom leading the pack
The Spanish financial daily “Expansión” reports
that Spain’s real estate boom is now the
most intense in Europe, and higher than even in
the US. A new report from the Bank of Spain reveals
that Spanish property prices have increased by
150% since Spain’s property boom started
in 1998, fuelled by low interest rates, demographic
forces and rapid growth in Spanish household incomes.
© Mark Stucklin of Spanish
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