Euro Properties To Fall In 2006
Some areas of Europe popular with second home buyers could see
property prices fall by ten per cent or more in the year ahead,
according to overseas property specialists Tribune Properties.
2005 saw the first signs of a property slow down, and even the
reverse of sharp gains in holiday home prices over recent years
in Spain and Portugal, with owners unable to sell their property
likely to drop their asking prices in 2006 to secure a sale, and
buyers in their strongest negotiating position since the mid to
late 1980's when prices dropped by nearly a third on the Spanish
Costas.
Europe's worst drought in living memory had an affect on the
markets in Spain and Portugal earlier this year, with many would
be buyers wondering if they would be able to use their pool in
years to come, with consequential rentals possibly tailing off.
'Some buyers rely on renting their holiday home out as they take
out a mortgage to buy', says Roger Munns of Tribune Properties,
'and if they can't rely on this it creates doubt as to whether
to buy or not. Some buyers were taking the view that they should
wait to see what happens'.
But it isn't just the possibility of more droughts and
unreliable rental income that is beginning to see prices drop in
some areas, according to Tribune Properties.
The emergence of new European markets in the former Eastern Bloc
has seen British, Dutch, Belgian and German buyers head for
countries like Bulgaria where apartments and houses can be
bought at a fraction of the price of Spain and Portugal.
'Second home buyers are seeing properties offered in Bulgaria at
less than half the price they thought they would need to own a
home overseas, and the traditional markets of Spain and Portugal
are losing out.
Already we have seen villas in Menorca drop in value by around
ten per cent, and they could, and probably will, go lower still.
In addition the rate of new builds on the Costa del Sol and
Costa Blanca hasn't slowed down to any great degree, and before
long there could be a price correction as there is going to be
quite an oversupply in the market.'
European Tax Havens
In contrast to lower prices on the Spanish Costas and Menorca,
Tribune forecast that prices on the Algarve and Malta are likely
to stay steady or increase as their domestic markets are strong.
The two countries they see in Europe with growth potential for
2006 are the tax havens of Andorra and Monaco.
Monaco and lesser known Andorra both offer no income tax for
residents, and Andorra has seen double digit property price
inflation for the last two years, with the 2005 figures likely
to match. After a slow start to the year Monaco has seen strong
buying in the last quarter.
With the new government in Germany increasing the top rate of
income tax, Tribune forecast demand continuing through to 2006.
'Andorra and Monaco are small countries with little room to
build new property', says Tribune's Managing Director Roger
Munns, 'Despite the German economy being slow for the last few
years it remains a very important market. The raising of the top
level of tax will mean more Germans seeking residency in a
country with low tax levels. Andorra and Monaco are the two most
likely candidates for them to buy in and take residency'.
Tribune's advice to potential overseas property buyers is to
find out how long a property has been on the market for, and to
make provisional offers of between five and ten per cent off the
asking price on a shortlist of three or four properties as one
owner is likely to accept. Their longstanding advice is to
always employ an independent lawyer to handle any sale and
deposits.
###
Tribune properties produce a guide for Monaco and Monte Carlo,
including the weather, a Monaco map, hotels and the Grand Prix
at www.yourmonaco.com
For a guide to Malta, including hotels, holidays, self catering
holiday villas and apartments, a map of Malta, flights, the
weather, car hire and details of Malta's main towns of Valletta,
St Julian's, Sliema, Mellieha, St Paul's Bay, Qawra and Bugibba
visit www.yourmalta.com
For property in Andorra www.propertyandorra.com
, property in Malta www.maltaproperty.info
, Menorca property www.menorcaproperty.info
a> and for property and real estate in Monte Carlo and Monaco www.monacoproperty.net