In our February newsletter we stuck our neck on the line and said that the brand new high-speed AVE train connection between Málaga and Madrid would bring Madrileños down to the Costa del Sol with more regularity. A couple of months later and consultancy Aguirre Newman agrees saying, “it seems that hopes of Málaga City Hall have been met with an increase in interest among Madrileños in obtaining property in the city”. As the pound ebbs against the euro it’s good to know that the Costa del Sol property market can rely on some strength from within its borders! Lady luck hasn’t been too kind with a weakening pound impacting our soft property market, but it’s not all doom and gloom. In this newsletter we give tips on how to make the exchange rate work in your favour and explain how Spain is actually far more ‘business as usual’ than people imagined – with the facts to prove it. Adam Gale, Managing Director, Duchy Estates. Click the headlines to read more... Spain - Business as Usual - A candid look at recent news headlines How to Outwit the Weakening Pound - Sellers now have even more room for manoevure on price Gibraltar – Costa del Sol’s Rock Solid Book-End - Cross-border living creates Spanish property hotspots The Renovation Game - Do a 'Beeny' and reap the benefits when the market returns Los Arrayanes Golf - Tiered apartments giving open views in Benahavís' golf valley Contact Duchy Estates on spain@duchyspain.com, visit www.duchyestates.co.uk or telephone UK freephone 0800 849 8089 or call the Spanish office on 00 34 952 906 944. Spain - Business as Usual At Duchy Estates we’ve been delving beyond the sensationalist stories to take a look at some professional insights into the Spanish property market that perhaps haven’t grabbed the front page headlines because they’re well, to be frank, too positive. We began by asking the MD of Kyero.com, Martin Dell, for some hard facts on traffic to his award-winning Spanish property website. Comparing Q1 2007 to Q1 2008 enquiries on Kyero.com were up 66% for Spain resales and 47% for Andalucia resales. Enquiries for Spain long-term lets were up 249% and Andalucia long-term lets by 210%. The good news didn’t stop there. Follows a selection of excerpts from recent news reports which blow the whistle at those intent on planning Spain’s demise... From OPP.org.uk, the UK’s leading trade publication for the overseas property industry, posted on 10 April 2008, “Spain has beaten Italy to the top of the MoveChannel.com’s Top of the Props chart for March, attracting 8.52% of all enquiries on the portal. Last month’s number one, Italy (8.02%), dropped to second place on the chart which tracks the number or property enquiries recorded by the portal on a monthly basis. France continues its slide down the table dropping a further two place in March, finishing at fifth spot.” From Assetz.co.uk, a focused property investment news site, posted on 25 March 2008, “The survival of Spain's property market against all the supposed odds may turn out to be one of the major stories of the industry in our time. No matter how much it has been predicted that the country will see its market wither and crash, the investment keeps coming… The popularity of Spain continues to underpin the market despite the doommongers' forecasts… It may just be that Spain turns out to be far more "business as usual" than some may have imagined.” From AIPP, the Association of International Property Professionals, posted on 3 March 2008, “The Association’s annual market report reveals that there were around 242,000 completed overseas property purchases made by British buyers, up 21% on 2006. Spain was the most popular destination; figures show that 25.4% of all Brits buying property abroad last year bought a home in Spain. France came second (17%), followed by USA (9.7%)… "Some may be surprised to hear that Spain is still at number one as the primary destination for Britons buying property abroad as there has been some negative media coverage over the Spanish property market", Paul Owen, CEO of AIPP said. "However, our figures show it is still the favourite destination for the British buyer; even a six per cent decrease in purchases did not manage to knock it from top spot." And from the global information and news service, Reuters, posted on 18 April 2008, “Spain faces the twin shocks of a property slump and the global credit crisis but is supported by a solid banking system and latent housing demand after the arrival of nearly 5 million immigrants this decade. Spanish house price figures published on Friday showed the property market was in a gradual slowdown rather than the abrupt shock suffered in the United States. Veteran Economy Minister Pedro Solbes said Spain could afford tax cuts, despite Bank of Spain warnings they could stoke inflation and send public accounts into deficit. "We know we're in a slowdown, and we know we've got room to manoeuvre," Solbes told a press conference.” Halt the obituaries, Spain’s property market could already be putting the USA’s, and dare we say the UK’s, to shame. Contact Duchy Estates by phone 00 34 952 906 944 or email spain@duchyspain.com or visit our website www.duchyestates.co.uk for further information. How to Outwit the Weakening Pound A weakening pound has made what feels like a bad day in the office for honest Spanish real estate agents feel even worse. At the time of writing a property priced at €200,000 has become £22,324.88 more expensive than this time last year. Quite some leap. But remember this means that sellers now have even more room for manoevure on price. Those bringing the proceeds back to Britain can console themselves with the fact they are repatriating many more pounds than they thought. So if you couple the exchange rate with a softer property market - now is definitely the time to bargain hard. Duchy Estates asked Mark Bodega, Director of currency specialists HiFX, to give his professional stance, “Most buyers work to a budget and changes in the eurosterling exchange rate have therefore led to people reviewing what properties they can afford. Rather than assuming that because costs have gone up, preferred properties are out of reach, buyers should remember that a drop in demand will mean vendors are also feeling the pinch. This leaves buyers in a position to negotiate prices. If buying a European property from a Brit use the rate fluctuations to renegotiate the price of the property. For example if a British vendor first put their Spanish property up for sale in October 2007 for €200,000, they would have been expecting to receive £137,931. If the vendor had managed to sell the property this month, April, due to the exchange rate they would receive an unexpected windfall (additional money from the sale) of £20,346.91. However canny buyers are now holding off buying as the prices have risen too high due to the exchange rate and so demand has dropped. In order to try to do a deal, buyers should therefore point out that the seller can afford to drop the asking price to €174,290 and still receive £137,931. Alternatively in the spirit of negotiation, the buyer could split the difference with the vendor and pay £187,143 for the property to do the deal.” Duchy Estates would also advocate using the services of a company such as HiFX to take the sting out of a purchase if transferring funds from the UK by obtaining ‘wholesale’ rates rather than ‘retail’ bank rates from a high street branch, not to mention avoiding those bank charges. Mark continues, “Using a currency broker to transfer the money to buy the property and not a high street bank will save consumers thousands of pounds. On average, mystery shops show that using a high street bank will cost up to 4% more on the exchange rate alone. 4% may not sound like a lot but this means if an individual is changing £100,000 into euros for example, they’d pay around £4,000 more than if they'd used a company like HiFX. Using a high street bank also means being subject to a number of additional bank charges which include commission fees (up to another 2% of the amount transferred) and transfer charges (usually £25 for each and every transfer) and finally depending on where the money is being sent, up to another half a percent bank receiving fees. Currency specialists like HiFX will transfer money abroad completely free of charge.” Unsuitable as the phrase is when applied to a Costa boasting over 320 days of warm sunshine each year, it would however seem that every cloud has a silver lining. To contact HIFX call +44 (0)1753 859159, visit www.hifx.co.uk, email info@hifx.co.uk or contact Duchy Estates by phone 00 34 952 906 944 or email spain@duchyspain.com or visit our website www.duchyestates.co.uk for further information. Gibraltar – Costa del Sol’s Rock Solid Book-End Gibraltar is a special case, less than 7km² in area with a population of just 29,000, but one of the most affluent communities on the planet. Although EU law dictates that the ‘tax exempt company’ must be phased out by the end of 2010, the British overseas territory remains heavily committed to the principle of ‘low tax’ and in some cases ‘no tax’ with zero capital gains tax, sales tax or VAT. This has helped to attract a flow of business to Gibraltar particularly in the banking, gaming, insurance and shipping industries. This Rock is robust. To cope with the influx of workers and steady stream of tourists, both overland and by sea, (Gibraltar received 240,000 cruise ship passengers in 2007), the Rock’s construction industry is in full swing. A new two-storey airport terminal is taking shape, much needed now Monarch, EasyJet and British Airways all have regular routes in from the UK (plus Iberia from within Spain), by 2014 the east of the Rock will have a £1.8bn Foster-designed mixed-use 500-berth marina and residential development called Sovereign Bay whilst the west-side is seeing luxury development in the shape of Queensway Quay, King’s Wharf and Marina Bay’s TradeWinds and Ocean Village resorts. Ocean Village with its swanky marina and waterfront al-fresco eateries goes down in history as having Gibraltar’s fastest selling residential units. Phase one, Royal Ocean Plaza, sold out within 48 hours of being released for sale and phase two, Grand Ocean and Majestic Ocean Plazas, within 12 hours. The latest addition scheduled for completion in summer 2008 is ‘Heart Island’ otherwise known as ‘Leisure Island’, 4,600m² of reclaimed land which will house bars, nightclubs, restaurants and a super-sized £5.5mn Gala Casino on the ground and first floors. This facility in particular eyes clientele from across the border in Spain. Across the border is in fact where many of Gibraltar’s workforce chooses to live, the property is more affordable, more spacious and there’s more room to breathe outside of that petite 7km² of activity. And, since the 2006 Tripartite Agreement whereby Gibraltar, Spain and UK acknowledged that the fluidity of traffic across the isthmus was an important issue given the high numbers of daily movements for reasons of work, commerce and leisure, border-crossing is much swifter and pain-free. The local Spanish property market is certainly benefiting as a result with several hotspots within easy reach – Sotogrande being one of them. Just 25km from the border this 2,000ha resort with its 683-berth marina, world-famous polo fields and golf courses, including Valderrama, is a highly favoured location for permanent living and second home ownership. Duchy Estates is promoting the south facing marina side resort of Guadalmarina comprising apartments and penthouses each with garage and storage. Built to high specifications with fully equipped kitchens, marble flooring and hot and cold air-conditioning, the homes enjoy a truly maritime outlook across the waterways of Sotogrande marina. Prices start from 394,000 euros for a three bedroom apartment. Contact Duchy Estates by phone 00 34 952 906 944 or email spain@duchyspain.com or visit our website www.duchyestates.co.uk for further information. The Renovation Game Budding Sarah Beenys, the astute businesswoman behind Channel4’s Property Ladder, could tackle a renovation project on the Costa del Sol and add some serious value to a property in a softer market before reaping the benefits when the market returns. Here’s four to whet your appetite. Villa, Estepona Alta. This single storey 120m² villa with three bedrooms and two bathrooms is set on a spacious 3,000m² plot in a tranquil yet accessible countryside location with panoramic views across the Mediterranean. The accommodation is well-distributed and very bright but a little updating could be in order. A starting point is the very traditional basic yet functional kitchen that is crying out to be brought into the 21st century. Price 550,000 euros. DEV1135. Villa, Benamara. Just 100 metres from the sandy beach this three bedroom two bathroom villa is on a private 948m² plot with mature gardens and is delivered fully furnished. A first-time renovator would be comforted by the fact that the property is in a good state of repair but relish the challenge of laying new flooring and tweaking its interior décor for modern living. Price 595,000 euros. DEV919. Villa, EL Paraíso. A spacious 200m² built three bedroom two bathroom villa in the sought-after golfing area of El Paraíso close to shops and leisure facilities. A roof terrace, independent guest studio and covered terrace with barbecue and Jacuzzi have already been added on but there is more work to complete. Tired marble flooring, dated interior finishings and an exterior repaint may make the shortlist but the kitchen is already in very good shape. Price 689,000 euros. DEV969. Finca, East Estepona. This charming four bedroom two bathroom villa on a sweeping 3,500m² plot commands some superb Mediterranean views. Arranged on three levels the property also has a secluded pool area with covered terrace and barbecue. Genuinely rustic in style, some modernisation could be in order from wall coverings to wardrobes and kitchen cabinetry. Well worth the effort. Price 595,000 euros. DEV1130. Contact Duchy Estates by phone 00 34 952 906 944 or email spain@duchyspain.com or visit our website www.duchyestates.co.uk for further information. Los Arrayanes Golf Los Arrayanes takes its name from the local aromatic flowering shrub, myrtle, which like the many millions of visitors to the Costa del Sol enjoys warm sunshine and is quite happy in sea air. Set in the golf valley of the municipality of Benahavís, dubbed by the Mail on Sunday as “one of the most affluent villages in Europe”, Los Arrayanes Golf is heaven for both golfers and those who would concur that it’s a “good walk spoiled”. Comprising apartments and penthouses this resort is less than 500 metres from the Clubhouse at Severiano Ballesteros-designed Los Arqueros Golf, and within ten minutes of several others including the three courses of Los Flamingos, Marbella Club Golf Resort, Atalaya and Guadalminas North and South. Nip in the car for a few kilometers and the relaxed marina of Estepona, the colourful town of Marbella and the glitz and glamour of Puerto Banús are easily accessible. Arranged in nine separate buildings, the carefully tiered 78 units, all orientated towards the west or south, give open views across Benahavís’ golf valley and the Mediterranean Sea beyond. On-site an oversized outdoor swimming pool surrounded by fountains and cascades in tropical gardens provides summer refreshment whilst a heated indoor pool with changing facilities will see residents through the brief winter months. With a choice of two or three bedrooms, each home has extensive terracing and glazing to take in the views and sunlight. Fully equipped designer kitchens with Siemens appliances and bathrooms have underfloor heating whilst bath tubs in master bathrooms have hydrotherapy jets. Add intelligent home automation systems controlling air-conditioning, open and closing of blinds and with a direct link to the on-site security company. Prices start from 460,000 euros for two bedrooms and any off-plan payments are fully bank guaranteed. Los Arrayanes Golf has all the necessary licensing from Benahavís Town Hall’s urban planning department. Contact Duchy Estates by phone 00 34 952 906 944 or email spain@duchyspain.com or visit our website www.duchyestates.co.uk for further information. A thank you from Duchy Estates to everyone who has passed favourable comments on our newsletter – from “we have our villa for sale with you… and it is a pleasure to see that an agent is actually doing something positive” to a simple “WOW – This looks really great! I found it very professional and informative to read, plus visually very attractive”. We’ll continue to inform you of our endeavours to adapt and succeed in a softer market at the same time as highlighting some property gems available for sale at very attractive prices. Make sure you take advantage of the deals before someone else does... Duchy Estates - Research Trips Adam Gale, Managing Director Contact Duchy Estates by phone 00 34 952 906 944 or email spain@duchyspain.com or visit our website www.duchyestates.co.uk for further information.