Spanish Property Market News
Half of all mortages are for more than 100% of the property price El Periodico de Catalunya reported that nearly half of all property buyers in Spain who request a loan, need to finance more than 100% of the value of the property, according to the fifth annual study of National Property Agents, undertaken in 2005.
In 2002, when the last study was undertaken, only 28% of all buyers needed to borrow more than 100% of the value of the property. On average, financing is calculated at about 92.9% of the property value, clearly higher than the figure cited in the last report, at 87.3%. The Bank of Spain recommends that lending institutions restrict their mortgages to only 80% of the property value, in order to avoid placing these families in a position of excessive debt if interest rates rise.
Spanish Housing Minister insists on Property Market regulation According to El Pais, Maria Antonia Trujillo stated 'In Spain it's more difficult to sell a lettuce than a home.' Hence her push to introduce stronger regulations for those buying and selling property, who currently are not subject to sufficient controls which would limit the abuse which takes place in the market (for example, charging excessive commission).
Despite there now being in existence some 8,000 registered and qualified professionals, in 2000 the PP in power in Government then decided to deregulate the market. Subsequently, there has been no need for a qualification or title to enable someone to deal in property. Amongst the measures announced by the Minister, agents will be required to obtain an official title in order to practise in the industry and there will also be a policing of fraudulent charges to clients. So far there is no date in place for these changes and Trujillo commented that they will probably be introduced in the long term.
The BCE delays interest rate increases until JuneExpansion.com reported that the Bank of Spain (BCE) has delayed the next interest rate hikes until June. Likely to be 2.75%, the intention is to correct the market, which awaited the tightening of lending during April. Jean Claude Trichet, President of the BCE, reassured that anticipated interest rate movements in May 'does not reflect the sentiment of the executive council of the BCE', a statement that just about eliminates the chance of changes next month.
Given the lack of haste that the BCE has expressed in changing the rate, it could mean that by the end of the year interest rates will stand at 3% instead of the 3.25% anticipated by the market. Nevertheless, Trichet insisted that interest rates will continue to rise now that there is a high risk of inflation and that for the first time in a number of years, economic growth here could be challenged.
Discovered for you by HOMES & FINCAS, Ayamonte, Costa de la Luz, Spain
Half of all mortages are for more than 100% of the property price El Periodico de Catalunya reported that nearly half of all property buyers in Spain who request a loan, need to finance more than 100% of the value of the property, according to the fifth annual study of National Property Agents, undertaken in 2005.
In 2002, when the last study was undertaken, only 28% of all buyers needed to borrow more than 100% of the value of the property. On average, financing is calculated at about 92.9% of the property value, clearly higher than the figure cited in the last report, at 87.3%. The Bank of Spain recommends that lending institutions restrict their mortgages to only 80% of the property value, in order to avoid placing these families in a position of excessive debt if interest rates rise.
Spanish Housing Minister insists on Property Market regulation According to El Pais, Maria Antonia Trujillo stated 'In Spain it's more difficult to sell a lettuce than a home.' Hence her push to introduce stronger regulations for those buying and selling property, who currently are not subject to sufficient controls which would limit the abuse which takes place in the market (for example, charging excessive commission).
Despite there now being in existence some 8,000 registered and qualified professionals, in 2000 the PP in power in Government then decided to deregulate the market. Subsequently, there has been no need for a qualification or title to enable someone to deal in property. Amongst the measures announced by the Minister, agents will be required to obtain an official title in order to practise in the industry and there will also be a policing of fraudulent charges to clients. So far there is no date in place for these changes and Trujillo commented that they will probably be introduced in the long term.
The BCE delays interest rate increases until JuneExpansion.com reported that the Bank of Spain (BCE) has delayed the next interest rate hikes until June. Likely to be 2.75%, the intention is to correct the market, which awaited the tightening of lending during April. Jean Claude Trichet, President of the BCE, reassured that anticipated interest rate movements in May 'does not reflect the sentiment of the executive council of the BCE', a statement that just about eliminates the chance of changes next month.
Given the lack of haste that the BCE has expressed in changing the rate, it could mean that by the end of the year interest rates will stand at 3% instead of the 3.25% anticipated by the market. Nevertheless, Trichet insisted that interest rates will continue to rise now that there is a high risk of inflation and that for the first time in a number of years, economic growth here could be challenged.
Discovered for you by HOMES & FINCAS, Ayamonte, Costa de la Luz, Spain
posted by HOMES & FINCAS at 5:35 AM
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