Would you ask a wolf to look alter your sheep?
An article in a recent edition of a known newspaper stated that new legislation has been brought about which will compel lawyers and public notaries to a more active role in the authorities fight against money laundering. Lawyers and notaries are now required to send periodical reports and keep all documents related to transactions that could involve money laundering.
There is no reference as to what legislation this might be, however it does seem ludicrous when in fact the major scam in money laundering, the so called ballena blanca, would seem to have been masterminded by lawyers and notaries.
Euribor, the main reference index used to set the mortgage interest rate, increased by 0242% in March, to 2,335%. As a result it is estimated that mortgages will increase by an average of 16 euros per month more than March last year. The increase is calculated on the repayment of an average mortgage of 120,000 euros over 20 year, which is an extra 192 euros per year.
Apartments are overvalued by some 20%
The Bank of Spain has warned that the price of residential properties continues to rise over and above justification and that the overpricing of apartments could well be in excess of 20%.
The Banco of Spain is confident that an orderly and smooth correction of prices will take place, however it status that the longer that correction takes, the greater is the risk of a sudden and abrupt correction taking place. The bank believes that the Spanish economy survives on stages of booming economy, however it does warn that there are other dangers to be faced: the loss of competitiveness and the icreased level of borrowing due to the property explosion.
Residential properties have increased by some 150% since he end of 1997, the start of the current boom, and in the last two years prices have gone up by an average of 17% per year, in the meantime, there have been built more apartments than ever (some 700,000 last year alone).
It is forecast that over 1 million holiday homes will be sold in the next 5 years.
According to the Federación de Promotores Inmobiliarios de la Comunidad Valenciana, the building of new urbanizations with added value such as golf courses, near the coast but not necessarily first line, represents the objective to be achieved by Spanish developers in order to attract the million foreign nationals that in the next five years will purchase a property in Spain.
In the opinion of Francisco Murcia Puchades, president of the Valencian Developers, residential tourism remains the most promising market niche in the future. However, in order to attract the buyers from central and northern Europe one has to offer something extra and the building sector must understand that if they want to sell abroad they must offer more than just a building.
Reference is made to aspects such as security, integral maintenance of the development, catering services,. In order to offer such facilities, F. Murcia Puchades points to the development of resorts with golf courses inland from the Valencian coast, as they are doing in Andalucia.
It is a fact that Malaga and Alicante are the two provinces in Spain with the greatest number of foreign residents. However in order to be able to materialise these investments it is essential to have a good infrastructure that permits access to the coastal areas.
The provision of better access and the increase in water demand for future developments must reflect in a better infrastructure (Alicante has constant problems with supplies, especially during summer). These are two pre-requisites demanded by Murcia Puchades and he assures developers that the right infrastructure for a high number of urbanization projects is appreciated by potential buyers from Germany and Britain as well as other northern countries.