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Overseas buyers who placed deposits on off-plan properties in Spain during the boom years of 1998 to 2008 now have an opportunity to recover some of their losses.

Finally, a ruling by the Spanish Supreme Court in 2015 is being acted upon and it means that financial institutions will have to refund deposits made for off-plan properties.

During the years 1995 – 2008, numerous foreign buyers, some 60,000 of them Irish citizens, put down large deposits on off-plan properties. However, as the property market took a dive in 2008, a majority of the developers were declared bankrupt.

When this happened, property developers, or builders, were required under law to place the deposits in a special bank account and provide a bank guarantee to buyers. The ‘special’ bank was supposedly obliged to ensure all this was in place. However, what actually happened was that the bankrupt developers couldn’t return deposits, and the banks declined to return the money as well.

The 60,000 Irish buyers, for example, lost their deposits and never took possession of the properties they had paid deposits on. But, the good news is that overseas buyers are now starting to force the banks to repay the deposits and follow the Supreme Court ruling.

Claims for refunds are being won

A number of Spanish law firms have already successfully won claims, but as yet the numbers are low, perhaps because few foreign buyers are aware that they can file a legal claim to have their deposit refunded. And, although the Courts ruled that deposits should be refunded, there is still no automatic right to reimbursement.

Therefore, legal counsel is required. Foreign buyers who lost deposits when the market went bust should find a Spanish lawyer who is expert in these types of claims, and at the moment, Spanish banks are facing something of  a tsunami of claims, as mortgage holders ask for ‘floor clause’ and mortgage set-up fee refunds.

In the spirit of “nothing ventured, nothing gained”, this could be the moment off-plan buyers of the boom period have been waiting for: they might get their deposits back and be able to reinvest in a market that is booming once again.

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Spanish Airports

If you go to a large department store there will most likely be a personal shopper service. It may be commonly thought that this service is only for the rich, but that is not necessarily true. Three Spanish airports are providing a free personal shopping service to travellers that will help them make the most of your waiting time before departure. The service is available to both domestic and international travellers, so nobody misses out.

The service started at Madrid and Barcelona airports, but it has now been extended to Málaga airport, the gateway to the Costa del Sol. The thinking behind the personal shopper concept is that airport shops are often crowded, customers aren’t sure where to find what they want and often miss out on the special offers.

Visitors to Málaga airport will be aware that it has considerably expanded its number of retail outlets since the new terminal opened. At the same time, it has increased the number of destinations bringing passengers directly from cities as diverse as New York and St. Petersburg.

According to Aena, the Spanish airport management company who introduced the personal shopper idea, the service is particularly popular with Scandinavians, British, Germans, Russians and Arabs, when looking on particular for jewellery, fashion and gourmet food products, which Spain is well known for.

The personal shoppers have all been chosen for the language skills and have been trained in the skills necessary to become an accomplished personal shopper, especially in the gift of understanding each customer’s personal needs.

Spanish airports, typically exclusive

So, now residents and visitors passing through these three airports in Spain have free access to what is typically an exclusive and expensive service. Alejandro Silva, who manages the personal shopping experience at Málaga airport, says that it has also been very successful with a number of the celebrities passing through the airport.

If would like to try the personal shopping service at Málaga airport here are some details.

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Portugal is on the overseas property news again. This time it is about the increase in property prices, as well as the rental income that owners can achieve. Overall growth is expected to be in the region of 4.5% in the coming year, and averaging 5.5% over the next five years.

Nationally, property prices rose by 12.8% in 2017, and by 21% in Lisbon. Real estate experts are also suggesting that buyers keep an eye on Porto for strong growth and the Algarve, always a popular destination, is also expected to perform extremely well. These are important points for overseas investors, and of course it suggests that getting into the Portuguese property market sooner rather than later is advisable.

Demand is outstripping supply in Portugal

This is the key reason to invest in Portugal – demand exceeds supply right now. So, property prices and rents are inevitably going up. Also, it seems that more owners are holding on to their properties here, clearly in anticipation that selling at a later date will give them a bigger profit. Therefore, more new build properties are needed to meet demand. An annual report by RICS/Ci Portugal, also revealed “that house price inflation picked up in the latest figures, with the price growth gauge displaying a net balance of +52%, of which is the second strongest reading since 2010, when the survey began.”

Ricardo Guimaraes of Ci said: ‘Top markets see new records every quarter and the most expensive prices previously have become just averages in the present. These quick changes have raised concerns for some respondents about developers and buyers operating in secondary locations, where prices might become unaffordable relative to local rationales.”

With Portugal’s economy also seeing positive growth compared with the past, it’s fast becoming one of Europe’s top property investment locations. Simon Rubinsohn, chief economist at RICS, said: “Indeed, employment and household incomes are rising, consumer confidence remains elevated, and credit conditions have eased further over recent months. Given this, the outlook for housing market activity appears solid as we move through 2018.”

Check out properties for sale in Portugal at Umuzee.com

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The demand for holiday homes in Spain is definitely on the rise, according ot an article in El Pais. Tinsa-supplied data shows that Areas with clear signs of recovery in the holiday home market are the Balearics, Canaries, Costa del Sol, North Alicante and the Costa Maresme.”

This growth is primarily driven by overseas buyers, with the Nordic countries, plus buyers from Britain and Belgium constituting the major countries of origin. According to Tinsa’s commercial director, Pedro Soria, the price of Spanish holiday homes is rising and keeping pace with demand and Málaga is among the regions with the highest price hikes. Others include Mallorca, Ibiza and parts of Huelva and Alicante. On average, the prices in these areas are up by around the 9% mark, which is in contrast to places like the Costa de Almeria and Costa Tropical, where prices have fallen. The Costa de la Luz has also seen a price decrease of just over 3%. The average for all of Spain is a plus 3.25%.

Some people are concerned about the increase in prices, because they don’t want to see a return to the pre-global recession situation, which proved unsustainable once the crisis hit the construction industry and particularly buyers’ bank balances. Undoubtedly, property valuations were excessive back in 2007, but in the interests of keeping some perspective, it is worth remembering that generally Spanish property prices are still 46% lower than in 2007, according to Tinsa.

Another factor that has boosted holiday home sales in Spain is the re-entry of developers into the market with a swathe of new build projects catering to the lifestyle tastes of international buyers. Until this time, the majority of properties available were resales and as a number of real estate agents have been heard to comment, these didn’t always fulfil buyers’ expectations, with the majority of them looking for residences in the contemporary style.

The local market for holiday homes on the Costas, or in the Balearics is still somewhat depressed due to worries about economic stability and salaries. On the other hand, a number of Spanish investors have returned to the scene and are buying up holiday homes for short-term rentals. This may be affected in the future by the current trend of restricting holiday lets in Spain’s main tourist cities in particular may curb that market sooner rather than later.

If you’re looking for a holiday home in Spain – check out our growing selection of properties all over the country.

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The latest figures for the Euribor, the base rate used to calculate Spanish mortgages was at -0.188 in May 2018, putting it at 48% lower than in May 2017. Although the May rate is slightly higher than that in April, it still represents a saving for those who reset their Spanish mortgages annually and mortgage holders will reduce their monthly payments by approximately €3 on a €120,000 loan with a 20-year term.

According to Mark Stücklin of Spanish Property Insight, who has been tracking Spanish mortgages for many years, it looks like the Euribor’s downward trend is more or less over, which means this is a good time to get a mortgage for a Spanish property.

Two elements are likely to affect the interest rates in the coming months: one is the political upheaval in Italy, with its untried and untested coalition government that is dominated by populist policies and Eurosceptic politicians. This has raised concerns about Italy’s place in the Eurozone, with some fearing that this new government will try to do a ‘Brexit’.

And, in Spain, the PSOE party introduced a successful vote of ‘No Confidence’ against the Spanish prime minister, Mariano Rajoy who was forced out of government by a cross-party vote. With Pedro Sanchez of PSOE now installed as prime minister there are concerns about Spain’s economic stability given that PSOE has no majority in parliament and is dependent on other parties for support.

AHowever, both these countries have large public deficits, which means that the European Central Bank (ECB) is unlikely to raise interest rates any time soon. Furthermore, they still have a long way to rise before they get out of negative territory.

ll this means that Spanish mortgages are still good value and this is an excellent time to take out a long-term, fixed-interest rate mortgage and avail yourself of today’s cheap cost of borrowing. As Stücklin says: “If interest rates, inflation, and Spanish property prices rise (as they are), buying a Spanish home today with a fixed-rate mortgage could turn out to be a good investment.”

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The Euribor rate continues to fall this year, albeit not quite as dramatically as in previous years, and it means that property owners will reduce their monthly mortgage interest repayments.

Most Spanish mortgages are based on the base rate of the 12-month Euribor. In April 2018 this stood at -0.191, which is a 59.7% fall on the same month in 2017. The April figure is important because this is the month when mortgages are reset annually.

The Euribor has been on a downward spiral since the global financial crisis in 2008. It got a short-lived, shot in the arm in 2011, but since then it has been remarkably low. In recent months it has been more static with no notable further decline.

What does this mean for Spanish mortgage payers?

If you have a Spanish mortgage that is reset annually, you can expect to see the monthly payment fall by round €3.6 on a €120,000 mortgage repayable over 20 years, according to Spanish Property Insight. It also suggests that articles in the Spanish press are quoting financial analysts as saying that they do not expect the Euribor will not fall any further and that “some monetary sanity has return to the Eurozone soon.” It looks like that days is approaching.

When you look at a 10-year chart for the Eurozone, you can see that money has never been so cheap here. Mark Stücklin, who is an expert on Spanish property prices, claims that now is the time to look for a long-term, fixed interest rate mortgage, because it will never be this good again, at least not in the next 20 – 30 years.

It is also the case that Spanish property prices are rising again, which is another reason to look for that dream property now and to get the mortgage arranged while the Euribor remains at this low level.

Search Umuzee.com for your Spanish property and mortgage advice.

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