Gross domestic product (GDP) will expand 2.3 percent in both 2008 and 2009 instead of the previously predicted 3.1 percent and 3.0 percent, Economy Minister Pedro Solbes told a news conference.

“The adjustment in the property sector is proving to be more intense than what we initially predicted,” he said.

The slowing economy will be accompanied by a rise in the unemployment rate to 9.8 percent in 2008 and 10 percent by the end of 2009 compared from 8.3 percent last year, the government predicted.

Earlier on Friday, national statistics office INE said the number of jobless rose by 246,000 or 13 percent in the first quarter to 2.1 million people, its biggest jump it 15 years.

That put the unemployment rate in the first quarter at a 3-year high of 9.6 percent, up from 8.6 percent in the previous three months.

That put the unemployment rate in the first quarter at a 3-year high of 9.6 percent, up from 8.6 percent in the previous three months.

“Spain is really in a dire situation right now,” Bank of America economist Gilles Moec told AFP, noting the country also accounts for 12 percent of the eurozone economy.

“Spain is really turning down very fast, faster than what we anticipated and its not just the construction sector which is doing badly,” he said.

Spain has led job creation in Europe in recent years with the jobless rate hitting 7.95 percent in the second quarter of 2007, its lowest level since 1978.

But the jobless started to rise late last year as the key building sector was hurt by rising interest rates and the international lending crunch, putting the brakes on a decade-long credit-fueled expansion.

Many of the newly jobless in the construction sector are immigrants who moved to Spain from Latin America and eastern Europe in recent years, drawn by the property boom.

“Spain is perhaps one of the most worrying cases of all in the euro zone at the moment,” Howard Archer, chief economist at Global Insight in London, told AFP.

Last week, Prime Minister Jose Luis Rodriguez Zapatero’s Socialist government, re-elected in a March general election, approved a two-year 18-billion-euro (28.5-billion-dollar) economic stimulus package.

The government says the package of tax rebates and public works spending will be paid for by dipping into the government’s surplus which Solbes said it hoped to maintain in 2008.

Tags: spain, property

According to The International Property Investment Network (IPIN), experts in overseas real estate choices, now is the time to buy in the prime locations of Spain. While exhibitors at SIMA this month were down by 20% on last year, the Spanish contingency remained decidedly upbeat and certain investment options such as Prados del Golf are in fact offering buyers the same kind of prices and longer term potential as were enjoyed in Spain over years gone by.

(PRWEB) April 24, 2008 — Capital outlay of only 20,000 EUR for well-located 2 bedroom golf apartments make Prados del Golf highly attractive to keen investors looking for below market value and minimum money down. Finance packages cover everything else (including furniture, VAT and purchase costs).

This is possible due to the unique financing package that has been formulated by IPIN’s finance partners, which uses the performance and stability of currencies the world over to offer its clients the best and most competitive rates. At this time for example, interest rates in Hong Kong are just 3.2% compared to a Spanish average of 5.5%; so why not take advantage? If rates in Hong Kong were to increase or a better deal becomes available elsewhere in the world, then your package can be transferred to the more favourable market in question. It’s that simple! *

This is just the kind of deal that shrewd investors in today’s Spanish market are looking for; completed, ready to move into properties at well below market value (bank valuations are available for inspection) with attractive finance options. The promoter’s prices have been slashed and represent substantial savings (as much as 81,000 EUR discount), even when taking into account the addition of furniture packs and purchase costs into the deal.

The apartments are artfully arranged over three building levels, alongside luscious fairways and enjoying fantastic views to the mountains and sea. On-site, residents can relax around one of the three swimming pools in the communal gardens. Only minutes walk away from a full range of local amenities and 1km from the nearest beach and town centre, the development’s location is arguably one of the best on the Costa del Sol. Not to be forgotten of course is this particular area’s amazing attraction to European homebuyers and investors.

The expatriate community in and around La Cala de Mijas is a very well-established one and English is widely spoken, making the area a sunny ‘home from home’ for literally thousands of tourists and expatriates. In fact, La Cala is one of the most in demand locations on the entire Costa del Sol, and is set to benefit from the extension of the main Costa del Sol railway line from Malaga which has been confirmed, and also a brand new Marina development, which is making its way through the relevant planning channels as of 2008 (project to be confirmed at a later date).

This combination of major discounts, outstanding finance terms and a great location of massive demand, mean that Prados del Golf is truly attractive for all property investors, offering a genuine cash positive rental investment for years to come. It is sometimes easy to forget that Spain remains the second most visited tourist destination in the world, behind France. It could be debated that if it were not for the tourist figures Paris generates alone, Spain would be number one. It is solid trends like this that investors are keen to tap into.

Today the Spanish market is arguably just as exciting as during boom years; in fact, developer discounts, distressed sales and highly motivated (often British) sellers all translate to a golden opportunity for buyers. This time, the opportunity requires more research and patience than before but the current market dictates strong profits for those willing to seek out the bargains now materializing.

Various interesting circumstances are being taken advantage of by wise investors; for example, the unfortunate choice facing some buyers is to default on completing their purchases and to lose their deposit and in some cases, this can be as much as 40% of the property value. Many developers are passing these savings directly onto a new buyer - effectively lowering the price to 60% of the original sale price.

In some other cases, prices can also drop purely due to currency fluctuations. Take another example of a British family selling their property in Spain with the intention of reinvesting the proceeds in the UK and realizing say, 100,000 GBP from the sale. A few months ago, with the exchange rate at 1.45, they would be looking to sell at 145,000 Euros (plus taxes and expenses). Now, they can afford to sell at only 125,000 Euros while still achieving their goal of 100,000 GBP - all great news for today’s investors looking to push prices down.

By the same token, Prados del Golf offers investors minimal exposure to the British Pound’s current poor performance against the Euro for transactions in the opposite direction. The 20,000 EUR capital required on this investment compares favourably with the standard 20-40% deposits normally required by developers in Spain, which would represent far greater exposure to the strong Euro at this time.

Danny Bance, Managing Partner at propertyshowrooms.com is convinced by today’s Spanish market potential, “Spain is now a great buyers’ market. Wise money is being spent by astute investors who can still make profits by seeking out exceptional opportunities such as this one at Prados del Golf…along with many others, I believe that 2008 is a year for shrewd investors to make some very smart, timely investments in Spain.”

All discerning property investors realize the importance of taking advantage of the most lucrative real estate opportunities as soon as they arise, before they become common knowledge. The International Property Investment Network (IPIN) operated by propertyshowrooms.com helps all types of investors in their quest to access up-to-the minute information on the very latest investment opportunities in the worldwide property market today.

Tags: property, investment, spain

Now a government drive to clean up Spain’s concrete-filled coastline after decades of abuse may wash away many of those dreams like castles of sand.

Enforcing a much-neglected 1988 law, the Socialist government is getting tough about what constitutes coastal public domain — the strip of land stretching back from the water’s edge — and telling thousands of house and apartment owners their properties do not really belong to them.

“Out of the blue we’ve been told the house we have owned for more than 30 years is no longer ours,” said retired British electronics engineer Clifford Carter, 59, who lives with his Spanish wife in La Casbah, a beach side complex in eastern Spain.

“The house was built legally, but now they say we can only live here until we die but can’t sell the house or leave it to our children,” said Carter.

The fears of losing coastal villas come as Spain’s real estate market is turning sour, a situation tied by some to the international banking crisis and its parent, the U.S. subprime mortgage scandal. While the troubles of Spain’s overgrown coast are not directly tied to the banking crisis, both have involved shady business practices that often wind up in the lap of individual homeowners.

Along the Spanish coast, a protest group formed in January says it already represents 20,000 people. It notes that up to half a million others — apartment and villa owners and restaurant and hotel proprietors — could be affected. Most are Spaniards, but many are foreigners.

“This is the single biggest assault on private property we have seen in the recent history of Spain,” said Jose Ortega, a spokesman for the group and lawyer for many of those affected.

He says that at best, owners are being given 60-year concessions to live on the property or operate their businesses. Others, he says, are threatened with demolition.

The government says the claims are exaggerated but insists the coast has to be saved.

“We’re taking the law seriously,” said the Environment Ministry’s coastal department director, Jose Fernandez. “Previous governments didn’t think it was important, while we have made it a priority.”

The government is finishing the process of drawing the line that designates what is state-owned and cannot contain private property along Spain’s 4,900 miles of coast — which includes the Canary and Balearic Islands and North African territories in addition the mainland.

It plans to spend some $8 billion to fix up the coast. Some of the money will go to homeowners who, under the 1988 law, cannot sell to another private party but can sell to the state.

Many people are suddenly finding they’re on the wrong side of the dividing line. Ortega’s group alleges the government is drawing it selectively, targeting individuals but shying away from tourist resorts.

But it’s not just individuals. The five-star Hotel Sidi lies a stone’s throw from retired engineer Carter’s house and the shoreline. Last December its owners were told it had been built on dune land protected by the 1988 law and must go. They are being offered a 60-year operating concession, after which it falls into state hands.

“We’re afraid that they’ll take away the property. It was built legally with all the papers,” said Roger Zimmermann, the hotel’s managing director. “This is our livelihood.”

Fernandez admits 1,300 structures have been demolished since the Socialists came to power in 2004 but insists most were constructed without permits. He denies the government has plans for mass demolitions or immediate expropriations. Barring exceptional cases, he says, people whose property is in the public domain will be able to continue living or working there.

Ortega says that is not comforting. “Today anybody who owns or wants to own a home or property on the coast can’t be sure because at any moment the government can take it away from you without compensation,” he said.

The economic impact on construction and tourism could be immense, Ortega argues.

This would be bad news for a real estate sector that has largely driven Spain’s economy for the past decade but it now cooling sharply.

The Costa del Sol Association of Builders and Promoters reported in February that sales of tourist property in southern Malaga province fell nearly 50% last year. It claimed the main problem was people being frightened by corruption scandals in which homes were built with licenses obtained through bribes

Tags: spain, property

Tags: spanish, builders, rental

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