Welcome...It`s May already and our weather is at its finest: blue skies and sun every day! If you have been reading the last few editions of these emails, then you will already be aware of some of the things that set Tenerife apart from the mainland. But now it looks like the press have noticed too, and we look at what the Spanish daily, El Pais has to say about the property market here. And they are not alone, as the number of people settling in Tenerife continues unabated.
If you are coming to the island soon, don`t forget to tell us the dates. One lucky couple enjoyed a fantastic meal last month, and another will be dining out on us this month... make sure you get included in the draw!
If you`re a bargain hunter, then you will definitely be interested in our article about Parque Albatros properties, which have been selling for a song. We are offering some bargain homes here, offered so far below their valuation, that you can purchase with a 100% mortgage, and only pay the costs!
And if you are coming out to view properties, then why not visit our website to rent an apartment? No commissions, no fees and we`ll refund your stay when you find a property you want to buy!
And as usual we have the best of the properties on the market at the moment and some of the most interesting news cuttings. We hope you enjoy...
Some owners have reduced their property prices substantially...
Canary Islands - a unique property market
El Pais, the respected Spanish daily newspaper, graphically showed how the Canaries are a property market apart from the mainland. Using figures from the Spanish National Statistics Office, they charted the sale of property built since 2005. Mainland Spain`s housing glut is well known, but these figures show that the Canaries cannot be tarred with the same brush. The island group has outsold every other part of Spain by a considerable margin.
About a third of the 1.8 million homes built in Spain since 2005 have yet to find a buyer. Economists at the University of Alcalá de Henares cross referenced the total numbers of completed homes with numbers sold for each area, creating an accurate map of house purchase activity for Spain.
The situation is reversed in the Canary Islands, which show a figure of -1%: indicating that more properties have been sold than completed. This may seem an odd figure, but there are properties that have been sold on developments that have yet to complete.
The statistics clearly show just how unique the property market is in the Canaries, and pundits have been quick to cite the reasons why. The growing foreign population, unique climate and most importantly, the limited stock of new housing built during this period are the factors underlying this balance of demand and supply. "The Canary islands looks like the only place in Spain to have got the balance right," commented one influential expert.
For both property buyers and sellers in Tenerife, the news comes as no surprise. "We have seen a slowdown in demand in Tenerife, but much of this has been down to buyer confidence in the face of lots of bad news about the property market in mainland Spain. It is interesting to see that the major newspapers are now catching onto the story," comments Mary Spencer, a Director of Tenerife Property Shop. "People often forget that the Canaries are an autonomous community, thousands of miles away from mainland Spain. You might just as well compare property in London with Port Stanley in the Falkland Islands and expect there to be a similarity."
Demand continues for new developments in Tenerife as they near completion
Avoid the freeze
First it was freezing weather, now it is frozen credit: the number of people escaping to Tenerife from the UK continues unabated. The credit crunch has had a dire effect on the UK housing market, as it has in mainland Spain. It now transpires that the decade long housing boom was really a credit boom, driven by the greed of the banks with the complicity of the media. As the world teeters on the abyss of a global recession, more and more people are realising that Tenerife will be a safer place to sit it out, than almost anywhere else.
There were no bounds to the avarice of the banks and financiers. When the UK was already saturated with home ownership, Banks and their eager media accomplices sold the idea of second, third or even fourth properties... we could all become landlords and property barons. And the banks lent 100%, 110%, 120% of value and more over periods as long as fifty years, to virtually anyone who applied. The situation was little different in Spain, where developers threw planning permission to the wind and set about the mass destruction of the Costas. More properties were flipped than burgers... right up until the last owner who was left holding the baby.
During that time the Tenerife experience was very different. Developers were frustrated by pesky moratoriums on new building so the new supply of property was comparably tiny. 100% mortgages only started creeping into the system at the very end of the boom, as late as 2007. Even then, they did not apply to the tens of thousands of foreign buyers, who could only borrow about 60% of the value of their properties. Buyers in Tenerife had to spend their own cash, unlike elsewhere. The boom here, though less meteoric than elsewhere was built on a foundation of hard cash, not hopeful borrowing.
At the time we felt a little hard done by. Tenerife seemed behind the times as credit seemed to be available in such abundance every where else. Estate Agents cast envious glances at places like Marbella, where easy credit made everyone a potential buyer. Right now, in Tenerife, we are breathing a sigh of relief. The low rate of borrowing on Tenerife`s property provides a bedrock of stability.
The stability of Tenerife`s property market was not built on the speculative whims of investors seeking mega returns on borrowed money. Our growth was slight compared to so many other places, like Bulgaria and Dubai. So that`s where the speculators went. Those who invested in Tenerife did so because they liked the island, the weather and wanted to enjoy it either as a holiday destination or as a permanent home.
People bought on Tenerife because they liked the island and the weather
So as Bulgarian property prices plummet, and Dubai fills up with unoccupied wastelands of luxury apartments, those destinations have ceased to be the darlings of the speculators. The credit crunch has left many with mountainous debts to service. Yet in Tenerife, there is still demand. People still want to come to a sunny place with a good infrastructure that`s not too hot for life in the summer, nor cold in the winter. The property market is quieter than it was only a short while ago, but this is more an indication of the state of the rest of the world. The world of finance has meant that some of these people have to put off their dreams, but they are still planning to own their piece of paradise. Our stable property prices won`t achieve the 25% return that the salesmen in shiny suits elsewhere will promise. But they won`t crash either.
The escape from the credit crunch has become a new reason to move to Tenerife. After riding the roller coaster of boom and bust fortunes, Tenerife`s stability is exactly what so many of us are looking for. It doesn`t get too hot. It doesn`t get too cold. It`s the middle ground that provides the safest path.
Dine for free in Tenerife!
Our newsletter prize draw winners thoroughly enjoyed a free meal at Bianco II recently:
"We took my mother-in-law and son and had a cocktail in the Amber bar beforehand. The food was excellent and so was the service at Biancos. We shall be going again at Christmas when we are over in Tenerife. Thanks again."
- Dr Venitia Walters winner of the April´s newsletter draw.
Have you told us when you are coming to Tenerife? Every month we draw subscriber`s names out of a hat and they get a meal for two at one of the island`s nicer restaurants!
All you have to tell us is the dates that you are visiting Tenerife, so we know which month`s hat to put you in.
Just press reply to this email with the dates you are staying on the island and your contact details and we`ll include you in that month`s draw!
The draw will take place during the month before you come out, so also include your phone number, so we can let you know if you have won, and tell you how to claim your prize!
Winners for May are: Mr Monger of Dover, United Kingdom
Official Valuations: Tenerife is a ´Bargain`!
At a time when almost the whole world is experiencing a quietening down in property sales, bargains in Tenerife are being snapped up almost as soon as the hit the market. Buying at low prices, investors are creating substantial property portfolios from vendors who have been panicked into selling at knock down prices - far below official valuations.
"Of course it won`t last, and we`re looking at a small window of opportunity," said one investor. "But as long as the press in the UK and Ireland continue damning the property industry in mainland Spain, spooked buyers are making Tenerife look like a goldfield."
Some of these investors have been accused of being sharks, cruising the reef and picking off the juiciest titbits. "Yes, people like me are going to look for the best bargains on the market, but that`s how investment works." another investor defended his actions.
We took a look at just one example, where the sharks have been circling: Parque Albatros in Golf del Sur.
The Turkish government has temporarily suspended the issuing of title deeds, or Tapus, to foreigners until it rectifies the current law concerning ownership of foreign property and land in the country. Thousands of property owners are looking on, concerned.
About 500 hectares of forest in la Gomera, the neighbouring island to Tenerife, may have been destroyed in forest fires. Luckily none of the ancient laurel forests, a UNESCO protected area, were affected.
