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Wednesday, 29 June 17:37 (GMT -05:00)



Business And Politics News

Spanish Housing Market Outlook


 

Spain is one of those countries who suffered most from the global financial crisis. It is one of those southern eurozone economies that are on the verge of a major recession. At this point, Spain is the country with the highest rate of unemployment in Europe – almost 25%. As a result, thousands of people start losing their homes as they cannot pay off their mortgage loans anymore. 
 
The Spanish government is trying to restore the economic growth by all means. They are even ready to grant residence permits to those foreigners who will purchase residential property in Spain to the amount of €250 000 or more.  They also bet on the tourist sector. It was decided to extend the working hours for those shops that are popular with tourists.
 
What are the prospects of the Spanish housing market? Let’s have a closer look at the issue.

 

 

 

 
Expert Opinion: Spanish Housing Market
 
Eugene Olkhovsky, Masterforex-V Academy’s leading expert in financial markets, reports that since 2007 (the highest level), the Spanish housing market has dropped by some 30%. Since thousands of people failed to pay off their mortgage loans, their homes were expropriated and put for sale. Therefore, a sharp increase in the supply resulted in lower prices. The average cost of 1 square meter of residential property (apartments) was around €1500.
 
As for today’s situation in the Spanish housing market, experts are at variance. Some of them assume that the weakness is about to be over while other do not agree with them.
 
Foreigners are actively buying Spanish fixed property while the local population is still waiting for better times. Over the last 3 years, foreign purchases have reached the highest level.
 
In 2011, foreigners invested some €4.67bn in Spanish fixed property, which is a 27% increase. In Q1 2012, there was a 21% increase s well.
 
The biggest buyers are citizens of North-European states like Sweden and Norway as well as Russians.
 
 
Another category of foreign buyers include retired people from Australia, France, Cyprus , Ireland.
 
Moreover, the Spanish government is determined to turn Spanish into a heaven for tourists and immigrants thanks to affordable food prices.
 
Crisis Trends: Consequences and Prospects
 
 Since 2007, Spanish financial institutions have expropriated some 300 000 homes from those who defaulted on their mortgage loans.
 
Since, January 1st 2013, anyone who would like to purchase residential property in Spain will have to pay a 10% value added tax.
At the same time, experts say that construction companies will face more difficulties next year.
 
Spanish banks offer mortgage loans up to 25 years at 60%, with a possibility of advanced repayment.
 
In Q2 2012, the investment inflow in the industry increased by 2.55 (y/y).
 
Since the housing bubble burst, the aggregate value of Spanish fixed property has declined by €360bn, which is equal to 35% of Spain ’s GDP.
 
The aggregate amount of transactions in the Spanish housing market has dropped 33% since 2007.
 
The amount of British buyers of Spanish residential property has declined by 64%.
 
Is Spanish Residential Property Worth Investing Today?
 
At this point, the Spanish infrastructure is being developed and reconstructed. In particular, there is a direct train from Alicante to Madrid. Therefore, those who live on the Eastern coast of Spain can reach the capital within several hours. Experts say that this factor may stimulate higher demand for residential property in the region.
 
Still, they discourage foreigners from investing in Spanish residential property in the near future as they expect housing prices do drop 6% more in 2013, even though the situation on the local housing market seems to be improving.
 
They also expect the total amount of unsold housing units to drop down to 500 000 by late 2014. Today’s amount varies between 850K and 900K units. 250K of those units belong to banks.
 
According to Masterforex-V Academy experts, now is a favorable period for purchasing residential property in Spain as the demand is still low and banks need to sell out the expropriated housing assets.
 
Moreover, the eurozone crisis is still underway. It keeps affecting the economies of Greece, Italy and Spain . At the same time, EURUSD has become more volatile.

 

 

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London Officially: 75 Percent for European Union

Results of the referendum held in the business center of London have been processed.

 

City men are against Great Britain’s exit from the EU. This is demonstrated by vote in London City, where 75 percent of voters have said a firm “no” to Brexit.

 

Publication date: 25 June 03:24 PM

Most British Citizens Support Brexit

According to The Independent, with reference to the recent survey conducted by the ORB, 55% of the U.K. citizens support the idea of quitting the European Union, which is also known as the so-called Brexit. Apparently, the remaining 45% still want to stay in the European Union. It is interesting to note that 12 months ago, the entire picture was the opposite.

Publication date: 14 June 09:33 AM

U.K. Counts Possible Financial Losses In Case Of Brexit

More and more experts and observers start speculating on the possible fate of the United Kingdom in case of the so-called Brexit, which stands for the British exit from the European Union. They keep on trying to predict the financial losses awaiting the U.K. people down the road if they dare quit.

 

 
Publication date: 26 May 09:56 AM

U.S. Energy Sector Sees More Defaults

According to several online sources specializing in the U.S. energy sector, the amount of businesses in the U.S. energy sector that went bankrupt in 2015 increased all the way up to 13%. The sources rely on the results of the resent research conducted by Fitch. Back in 2014, the similar figures used to be under 2%. On top of that, the experts are sure that by the end of 2016, the amount of bankruptcies among U.S. energy companies is going to reach 20%.

Publication date: 26 May 07:32 AM

Another Interest Rate Hike by the Fed Expected In June

Some representatives of the international expert community remind us that the Fed is going to go back to discussing the possibility of another interest rate hike in the near future. This discussion is going to take place during the forthcoming FOMC meeting in June. They say that the markets are wrong when expecting the same interest rate for the 4th month in a row.

Publication date: 17 May 05:42 PM

Saudi Arabia Wants Less Dependence On Crude Oil

Not so long ago, a representative of the Saudi King’s was reported to have introduced a new development plan for Saudi Arabia until the year of 2030. It is named Vision 2030. The plan reveals the local authorities’ intention to introduced some fundamental changes to the country’s economy and financial system. They are aware of the serious dependence on crude oil exports, which is why they want to reduce this exposure to the international market of crude oil by making the local economy more diverse and less dependent on the local oil industry, especially amid still low oil prices and great uncertainty dominating today’s financial markets in general and the global oil market in particular.

Publication date: 04 May 11:12 AM

Fed Leaves Interest Rate Unchanged

The members of the Fed’s FOMC left the key interest rate unchanged at 0,25%-0,5% during the latest meeting last week. This is confirmed by the FOMC meeting minutes. To be more specific, the minutes read that the information received since the March meeting clearly indicates that the contemporary labor market is definitely improving and recovering despite the likelihood of another economic slowdown in the USA.

Publication date: 03 May 05:07 PM

Saudi Arabia Ready to Reduce Oil Dependence

Not so long ago, a representative of the Saudi King’s was reported to have introduced a new development plan for Saudi Arabia until the year of 2030. It is named Vision 2030. The plan reveals the local authorities’ intention to introduced some fundamental changes to the country’s economy and financial system. They are aware of the serious dependence on crude oil exports, which is why they want to reduce this exposure to the international market of crude oil by making the local economy more diverse and less dependent on the local oil industry, especially amid still low oil prices and great uncertainty dominating today’s financial markets in general and the global oil market in particular.

 

Publication date: 03 May 10:03 AM

Saudi Arabia’s Oil Games May Be Dangerous to Both Russia and USA

According to Andrey Gudkov, an observer for Deutsche Welle, the oil games played by Saudi Arabia may present danger to Russia and the USA. The be more specific, the observer says that the Saudis are playing dangerous oil games. They have been playing similar games in security and politics. Now they are playing those in macroeconomics. For instance, it was Saudi Arabia who intentionally disrupted the recent oil summit in Doha. On top of that, the Saudis announced their intention to sell tons of U.S. bonds to a stunning amount of $750 billion. Such unexpected steps may undermine financial markets worldwide and eventually affect a number of major and emerging economies, including Russia and the USA.

Publication date: 22 April 09:26 AM

Brexit May Cost EU 5% GDP

As you probably know, it is still unclear whether the UK is going to stay an EU member. The local officials seem to be against the so-called Brexit. However, the plain folks are going to make the final decision. The thing is that the authorities are going to conduct a Brexit referendum to let the people decide whether to stay in the European Union or quit it.
 
Publication date: 07 April 12:11 PM