Bullet points news roundup

IT IS NOT A PRETTY PICTURE, BUT BETTER TO BE INFORMED THAN TO BE MISLEAD/MISSOLD

The IMF has warned that Spanish property is 15% to 20% overvalued, and that residential investment, at 9% of GDP - second only to Ireland - is way too high. Based on these two metrics Spain has more to worry about than the US, where the property market is undergoing a major slump.
Spanish property is 40% overvalued if measured against historical rental yields (a type of price-earnings ratio), reveals a new study from the Instituto Juan de Mariana.
Spanish property transactions fell by 14% to 788,518 in 2007 according to figures from the Spanish property register. New property sales fell by 12.4%, and resales by 15%.
Asking prices for resale properties fell by 0.6% in Barcelona and Valencia, and 0.1% in Madrid during the first quarter of the year, according to figures from Idealista.com.
Transaction prices are now 12.5% lower than asking prices in the City of Valencia, according to the estate agents’ association Coapiv.
A new report from ratings agency Standard & Poor's warns of a painful property market correction in Spain and the UK. The report goes onto say that Spanish property prices could fall by 5% over the next 2 years, which doesn’t sound very painful, and in reality has probably already happened.
Home insurance premiums have gone up by an average of 4.1% since February last year, according to latest figures from Spain’s national statistics institute.
Barcelona is running out of water due to a drought and, more importantly, government incompetence. Reservoirs supplying Barcelona are down to less than 20% of capacity, and the water supply is expected to be cut off on an intermittent basis by the autumn. Water restrictions such as hose-pipe bans are already in place.
Unemployment amongst immigrant construction workers has risen by 92% in the last year. General construction sector unemployment in Malaga (Costa del Sol) is up 44% in a year.
The property downturn has started to hit government revenues, reducing VAT receipts by 8.2% in the first 2 months of this year


Courtesy of Mark Stucklin

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