Eastern Europe Property

13th Oct 2005

Three major Spanish banks have predicted annual house price inflation of 12 per cent in the first year following the launch of property investment Self Invested Pension Plans (Sipps). Major Spanish financial advisors and property experts are already preparing for a wave of new UK property investment after the Sipps April launch.

“Our research with pension providers indicates that Sipps holders will be happy with a return below that being forecast by the Spanish banks. Spain is able to combine economic security and unlimited tourism lettings potential for the Sipps homes with a better than average investment return,” spokesman for property investment group Sipps In Spain Alberto Linares told Property in Spain.

The most recent property investment forecast, provided by Bank Caixa Catalunya, reports that the underlying Spanish economy “remains sturdy” and that market activity remains strong. The prediction of 16 per cent house price inflation through to the end of the year and 12 or 13 per cent over the course of 2006 tallies with that given by banks CAM and Caja Murcia.

Both CAM and Caja Marcia are major players in the Spanish property investment and mortgage sectors, catering to both domestic and jet let demand, and members of the Sipps in Spain group alongside UK and Spanish trading partners.

“We plan to launch the first SIPPs friendly development shortly, at prices below the current forecast levels. Already there are many signed up buyers through the SIPPs in Spain grouping. If the SIPP pension is getting 12 per cent growth a year, this has got to be one of the best returns in many years,” said Jose Ivars of Sipps in Spain developers Blauverd.

Assetz recently launched the first overseas property tailored Sipp in response to the level of interest among their existing 50,000 strong property investment client database. While no Sipps plans are currently under the authority of regulator the Financial Service Authority, Assetz customers will be able to receive FSA approved advice.

“I would expect interest in Sipps to increase after A day once people cotton on to the opportunities and realise there are few catches buried in the small print,” said Assetz managing director Stuart Law.

“Making a success out of the potential property investment opportunities within SIPPs requires a greater focus on locking away personal assets and savings for the long term purpose of retirement income planning, which cannot be a bad thing in the current climate with most people having a poor pension provision.

“Having overseas pension assets that can be used a little as well as let out for income may well encourage more people to start saving for their pension,” he added.

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Friday, October 07, 2005

A well respected annual Spanish property report jointly published by estate agent Forcadell and the University of Barcelona has predicted a slow deflation and soft landing for the Spanish property investment market in the near future. According to the report, Spain’s current annualised property price inflation rate of 15 per cent will slow to eight per cent by the turn of the year and stay in single figures for the next four years.

Others disagree however, and the overall picture remains far from clear. The principal cause of the slowdown in property investment cited by the Forcadell report, slackening demand, is disputed with Jose Luis Marcos telling Spanish financial newspaper Cinco Dias that a fall in demand was tightly focussed on areas perceived as being overdeveloped, principally Marbella and Sotogrande on the Costa del Sol.

“The prices in those areas was excessive and an adjustment was needed,” he said, going on to add that demand has remained steady elsewhere. “Prices are continuing to rise, but at a much slower rate than in previous years,” agrees Chus de Miguel, managing director of the Spanish developer Lar Sol.

The Spanish economy remains sturdy and contrary to what is sometimes believed the Spanish remain the biggest buyers of property investment holiday homes in Spain, leading the Spanish bank Caixa Catalunya to predict a rise in house price inflation to 16 per cent by the end of the year followed by a fall to 12 or 13 per cent through 2006.

With Spain continuing to throw up more property every year than France, Germany and the UK combined however, it seems fairly certain that demand over the long term will not be keeping pace with supply to sustain the levels of price inflation seen in recent years.

With this in mind, Spanish housing minister Maria Antonia Trujillo has claimed that her department’s policies are successfully, and slowly, taking the edge of the property investment boom to ensure there is no sharp bump later on. The Spanish government is committed to building more social housing and stimulating the rental market to slow price inflation.

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