Property Prices in Tenerife

[Angusjim]

What's your opinion on where proprty prices are heading in Tenerife ? Personnaly I feel that more & more repossessions & distressed sales will be coming on the market driving prices down,I am looking to buy but feel that there will be big bargains to be had in the next couple of years am I right or do you think it has bottomed out now.

[Tom & Sharon]

What's your opinion on where proprty prices are heading in Tenerife ? Personnaly I feel that more & more repossessions & distressed sales will be coming on the market driving prices down,I am looking to buy but feel that there will be big bargains to be had in the next couple of years am I right or do you think it has bottomed out now.

Like everything in life Jim, it's a gamble.

If they've not bottomed out yet, surely they can't be far off? Being as you have quite specific needs and wants in what you want to buy, surely if your ideal property were to come on to the market now, you'd be daft not to buy it. What's the point in missing something you'd really like, just in case the market drops a bit further, and ending up with something cheaper but doesn't tick all the boxes?

That's a woman point of view though!

[tonypub]

with the prospect of a bailout still hanging over spain and the uncertainty it brings ,very few banks will give mortgages unless you have a huge deposit.theres a glut of propertys for sale so dont expect an improvement in prices anytime soon.

[Sundowner]

I would wait for the £ to get a bit stronger......................that's a man's point of view :)

[Angusjim]

Like everything in life Jim, it's a gamble.

If they've not bottomed out yet, surely they can't be far off? Being as you have quite specific needs and wants in what you want to buy, surely if your ideal property were to come on to the market now, you'd be daft not to buy it. What's the point in missing something you'd really like, just in case the market drops a bit further, and ending up with something cheaper but doesn't tick all the boxes?

That's a woman point of view though!

For a start Sharon I am Scottish and I think the quest for a bargain is inbred !! but I feel & always have thought that property in Tenerife is in generally overpriced. I will I think know when the right deal comes along and I will take the plunge.

[Peterrayner]

I would wait for the £ to get a bit stronger......................that's a man's point of view :)

surely if you are selling in euros a weaker pound is better ?????

[Angusjim]

I would wait for the £ to get a bit stronger......................that's a man's point of view :)

That is very good point and is also in my thoughts

[atlantico]

As said, buy the one you WANT not the CHEAPEST one. (and the one you can afford)

We bought 2 years ago and got the price reduced by €65k - BARGAIN !

Today it may be worth even less - but we don't care, as if we'd waited we may have missed it. And even if we did get it for less today, we'd have missed out on the last 2 years of use, just to save a few grand !

Prices appear high to UK residents because of the exchange rate, so waiting for it to get better is a good idea - but that may never happen ! We put our offer in when it was 1.25, and at time of sale it was 1.18, so we lost several grand, BUT at todays exchange rate we'd have to buy the property at at least €25k less to even match the price we paid, in GBP

Also, if the sort of property you want is available in the thousands (like terraced houses) then wait and shop around for a bargain, but if the property you want is a one-off in a certain location - then bite the bullet before someone else does.

ie. in Silencio, if you want a detached house, you'll pay more as only 5% of the properties match that criteria. We bought a semi house and they are just as hard to come by at even a reasonable price, let alone a bargain !

[Peterrayner]

For a start Sharon I am Scottish and I think the quest for a bargain is inbred !! but I feel & always have thought that property in Tenerife is in generally overpriced. I will I think know when the right deal comes along and I will take the plunge.

overpriced compared to ...?????

It is a holiday resort and a popular one for all said and done and that will reflect in the prices.

dont let greed outwiegh common sense here :) yes the best bet is to buy at the bottom of the market but also just on the turn to a rising one :)

[Sundowner]

surely if you are selling in euros a weaker pound is better ?????

He is talking of buying....................:)

[Peterrayner]

He is talking of buying....................:)

ahhhh I was of course talking of selling

so ... buying strong pound...selling weak pound.

Cant see it strengthening much maybe to about 1.20 E for a Pound if and when interests rates rise again.

[Angusjim]

overpriced compared to ...?????

It is a holiday resort and a popular one for all said and done and that will reflect in the prices.

dont let greed outwiegh common sense here :) yes the best bet is to buy at the bottom of the market but also just on the turn to a rising one :)

Yes it is a holiday resort but many prices were paid on the basis of getting holiday let rentals which now appears to be a mistake ( but thats another thread !! ) do you think the prices for instance on El Mirador are a fair reflection of the value of the property if you don't include holiday lets ? if holiday lets are stopped on there I see prices plummeting.
The last time I bought in Tenerife it was a mistake where I let my heart rule my head a mistake I will not make this time. I agree with you about buying at the right time but thats the real unknown factor when is the right time.

[atlantico]

the exchange rate must be playing a huge factor in property prices in Tenerife, especially for UK residents.

Imagine just a basic cheap apartment at €100k.

At today's lower rate of 1.08 = £92K

At last weeks 'high' rate or 1.18 it = £84.5k

That's a massive £7.5k, on just a €100k property, so obviously £15k on a €200k one !

Added after 2 minutes:


Yes it is a holiday resort but many prices were paid on the basis of getting holiday let rentals which now appears to be a mistake ( but thats another thread !! ) do you think the prices for instance on El Mirador are a fair reflection of the value of the property if you don't include holiday lets ? if holiday lets are stopped on there I see prices plummeting.
The last time I bought in Tenerife it was a mistake where I let my heart rule my head a mistake I will not make this time. I agree with you about buying at the right time but thats the real unknown factor when is the right time.

SO ? El Mirador WITHOUT holiday makers ? Tom&Sharon will say the values will INCREASE for that very same reason ! And, think about it, that could well be the case. Rich owners want to be near the centre of towns etc, BUT NOT living with holidaymakers !

[sleepy]

I'll be rubbing my hands soon if holiday letting on residential complexes ceases,because it could well see property prices rise on the touristic ones:pray:

[Angusjim]

I'll be rubbing my hands soon if holiday letting on residential complexes ceases,because it could well see property prices rise on the touristic ones:pray:


I would also see the sole agents on sites also rubbing their hands:whistle:

[Tenerife Property]

The answer is blowing in the wind.... property values will be determined by the market as they always have, it is about what someone is prepared to pay for a property. Personally I think prices will not fall too much more unless there is an economic setback. As someone has said on this thread, the value pound may be become stronger and that may bring more UK buyers into the market here. Sterling vs. Euro is a big factor in the property market here.

The best advice is to consider your own economic situation. Buying property in the current market should be about the immediate financial benefit of buying with ALL things considered. People are buying where the numbers stack up and they are mostly cash buyers at the moment.

I believe you should not see property as an investment in terms of capital growth until there is sustained confidence in the property market here. The time to buy of course is before prices start rising and that could happen if the banks start lending again.

I maybe stating the obvious but felt like chipping in.

[Angusjim]

The answer is blowing in the wind.... property values will be determined by the market as they always have, it is about what someone is prepared to pay for a property. Personally I think prices will not fall too much more unless there is an economic setback. As someone has said on this thread, the value pound may be become stronger and that may bring more UK buyers into the market here. Sterling vs. Euro is a big factor in the property market here.

The best advice is to consider your own economic situation. Buying property in the current market should be about the immediate financial benefit of buying with ALL things considered. People are buying where the numbers stack up and they are mostly cash buyers at the moment.

I believe you should not see property as an investment in terms of capital growth until there is sustained confidence in the property market here. The time to buy of course is before prices start rising and that could happen if the banks start lending again.

I maybe stating the obvious but felt like chipping in.

Well don't hold your breath waiting on UK banks to lend any time in the near future I have been in several meetings recently with my bank and residential property is way down their list " is classed as high risk" unless you have a big deposit to put down

[marbro8]

or just long term let untill the time is right to buy, that way you can wait as long as you like without missing out on extra years in the sun

[Angusjim]

the exchange rate must be playing a huge factor in property prices in Tenerife, especially for UK residents.

Imagine just a basic cheap apartment at €100k.

At today's lower rate of 1.08 = £92K

At last weeks 'high' rate or 1.18 it = £84.5k

That's a massive £7.5k, on just a €100k property, so obviously £15k on a €200k one !

Added after 2 minutes:



SO ? El Mirador WITHOUT holiday makers ? Tom&Sharon will say the values will INCREASE for that very same reason ! And, think about it, that could well be the case. Rich owners want to be near the centre of towns etc, BUT NOT living with holidaymakers !

I do agree that exchange rates also play a part in the Tenerife market

Where are all these rich owners coming from ?

[mossy]

the bottom is reached when there is panic selling,that's what they say in the stockmarket,so has this happened yet?An other saying is:don't catch a falling knife.

[Tenerife Property]

At the moment there seems to be a large enough stream of buyers to soak up the bargains but the market is definately not overflowing with cheap property. Mossy, I don't think panic selling or falling knives would happen in a property market. Stock markets differ in that people make spot decisions which can affect values instantaneously. Property values do vary according to demand but usually not quite so quickly. An example of something which might affect property prices quickly could be property purchase tax (IVE) doubling, or something like that.

Do you remember what Edwina Currie's comment did to the price of eggs, or last week how quickly the price of Spanish cucumbers fell. Even a volcano in Tenerife would be unlikely to affect the price of property overall because people with money would probably even speculate on that.

The difference now is that people speculate with their own money. Bank lending has been severely strangled because property is currently considered to be a high risk investment. If you think about that, maybe it is because the the banks are hugely vulnerable to the performance of Governments and vica versa, catch 22?:rolleyes:

[CIM]

I wrote an article on Tenerife property prices last September. I have just re-read it and it seems as true today as it was 10 months ago:
Tenerife Property prices (http://tenerifeestateagents.net/tenerife-property-prices-rising-or-falling/)

I have been meaning to update it - but nothing much has changed... I have just looked at the numbers over the past 12 months and interest is stagnant - slightly down if anything with the usual spring burst of activity. A few bullet points from what I see myself in the property market:



Property is selling, but for the most part, only the best priced property. Mortgages are still possible at up to 70% for non-residents (I have three lenders who offer this.)
Valuations continue to fall across the board.
Confidence has not returned to the market.
Residential areas are showing the steepest price drops but all areas and sectors are still in decline.
Price trigger points are being hit and investors are picking up the lowest priced properties.

I´ll look again in September and write an update but there's really not a lot to report that differs from what I wrote nearly a year ago.


Personally I feel that more & more repossessions & distressed sales will be coming on the market driving prices down,I am looking to buy but feel that there will be big bargains to be had in the next couple of years am I right or do you think it has bottomed out now.

Get your hand in your pocket and get something bought you tight git!!!

[Tenerife Property]

I concur with CIM on his article, not much has changed except that maybe the buyers do more research before buying.

[Peterrayner]

I'll be rubbing my hands soon if holiday letting on residential complexes ceases,because it could well see property prices rise on the touristic ones:pray:

Not sure thats correct ! once potential buyers realise they are buying into a monopoly situation that would severely control any potential income if the current laws are strictly imposed and that by law the sole agents can demand first refusal on any potential sales.

Added after 2 minutes:


I do agree that exchange rates also play a part in the Tenerife market

Where are all these rich owners coming from ?

Russia they need to get rid of their "black" money quick so its all cash purchases :wink:

[Angusjim]

I wrote an article on Tenerife property prices last September. I have just re-read it and it seems as true today as it was 10 months ago:
Tenerife Property prices (http://tenerifeestateagents.net/tenerife-property-prices-rising-or-falling/)

I have been meaning to update it - but nothing much has changed... I have just looked at the numbers over the past 12 months and interest is stagnant - slightly down if anything with the usual spring burst of activity. A few bullet points from what I see myself in the property market:



Property is selling, but for the most part, only the best priced property. Mortgages are still possible at up to 70% for non-residents (I have three lenders who offer this.)
Valuations continue to fall across the board.
Confidence has not returned to the market.
Residential areas are showing the steepest price drops but all areas and sectors are still in decline.
Price trigger points are being hit and investors are picking up the lowest priced properties.

I´ll look again in September and write an update but there's really not a lot to report that differs from what I wrote nearly a year ago.



Get your hand in your pocket and get something bought you tight git!!!

I think you mean thrifty:eyebrows:

[CIM]

I think you mean thrifty:eyebrows:
:) ...........

[kathml]

I was once given some very good advice
When selling don't hang on for the last few percentage points
When buying don't wait until the market reachs the bottom
Always leave a little possible profit for the next man

[Peterrayner]

I was once given some very good advice
When selling don't hang on for the last few percentage points
When buying don't wait until the market reachs the bottom
Always leave a little possible profit for the next man

wow Kath thats almost a positive posting there :)

sorry about this been to the pub for Sunday dinner and few pints of Tetleys. :hungry::drinking:

[kathml]

Treat property purchase as you would anything else

"Is it worth that price to me?"

If so buy it and forget what you paid for it That won't matter until you come to sell it and unless its a short term purchase over the long term you will usually make a profit

Don't speculate with money you don't have that will lead to disaster

[Jimandsi]

Even a volcano in Tenerife would be unlikely to affect the price of property overall because people with money would probably even speculate on that.




This just gets better and better. :crylaughing:

So many "experts" on here posting complete nonsense.:doh:

[poker]

Now what will be the effect of the interst percentage going up in the future (like Trichet is sugessting) .......

Surely even less will be sold if the prices dont come down .

Or we will be having (controlled) inflation (exept on propery prices witch would stay same) as the Americans are still running the moneypress full speed and the troubble with the Euro (were do they get the billions to support Grease and Ireland and Portugal . Probably some printing also of Euro`s?).

One thing is sure the prices are not going to go up for a long time .

Like sayd If you find something special buy it for the rest i would wayt .......

[dokgolf]

Now what will be the effect of the interst percentage going up in the future (like Trichet is sugessting) .......

Surely even less will be sold if the prices dont come down .

Or we will be having (controlled) inflation (exept on propery prices witch would stay same) as the Americans are still running the moneypress full speed and the troubble with the Euro (were do they get the billions to support Grease and Ireland and Portugal . Probably some printing also of Euro`s?).

One thing is sure the prices are not going to go up for a long time .

Like sayd If you find something special buy it for the rest i would wayt .......

Dont get me started on the bailout for Ireland. It was forced upon us by Sarkozy and Merkell and Trichet who have insisted that every bondholder be repaid in full, by the Irish taxpayer, for debts incurred by PRIVATE banks. The Irish government wanted to have a scheme where the losses would be shared by Joe Public and the senior bondholders ( which was still wrong) in the banks ( i.e. German and French banks) but the Euro powers that be refused point blank. Hence, we were left in the position of having to accept an IMF/EU/ECB ( and UK) bailout at extortionate rates. Ireland so far has met every condition of the bailout yet Greece and Portugal who have a far worse financial base are getting more preferential rates???? My own opinion is we should pull out of the eurozone, devalue our currency and force loss sharing on the "pound of flesh" merchants in Paris and Berlin:mad::mad::censored::censored:

Added after 2 minutes:


Now what will be the effect of the interst percentage going up in the future (like Trichet is sugessting) .......

Surely even less will be sold if the prices dont come down .

Or we will be having (controlled) inflation (exept on propery prices witch would stay same) as the Americans are still running the moneypress full speed and the troubble with the Euro (were do they get the billions to support Grease and Ireland and Portugal . Probably some printing also of Euro`s?).

One thing is sure the prices are not going to go up for a long time .

Like sayd If you find something special buy it for the rest i would wayt .......

I forgot about your original question, the EU got the money for the bailouts by instigating a mechanism whereby they issued what are effectively Euro bonds on the international markets. They got the money at approx 2.2% interest rate and kindly passed it on to us ( the Irish) at 5.6% and the Portuguese at @ 4.5%

[CIM]

SO ? El Mirador WITHOUT holiday makers ? Tom&Sharon will say the values will INCREASE for that very same reason ! And, think about it, that could well be the case. Rich owners want to be near the centre of towns etc, BUT NOT living with holidaymakers !

It´s going to be interesting to see what effect this "clampdown" on illegal lets has to El Mirador as it is absolutely rife on there. Following on from that - perhaps the prices advertised wont drop much as owners are not willing to sell at a loss? But I think other than those who are still ignorant to the letting laws, the prices that buyers are willing to pay for an apartment on there could be affected dramatically.

[TenerifePool]

The simple fact is that we DON'T KNOW what the real value of property in Tenerife is. Despite agents and owners trying to talk prices up the fact is that after a number of boom years the property market was heading downwards even before the global financial crisis took effect.

Generally a person who bought a property for say 30 million 4 or 5 years ago is now sat on a property worth 12 or 15 million at most. A friend of mine bought 2 apartments in the last six weeks on reasonable complexes for less than 7 million each, that's 40 000€ each.

[dokgolf]

It´s going to be interesting to see what effect this "clampdown" on illegal lets has to El Mirador as it is absolutely rife on there. Following on from that - perhaps the prices advertised wont drop much as owners are not willing to sell at a loss? But I think other than those who are still ignorant to the letting laws, the prices that buyers are willing to pay for an apartment on there could be affected dramatically.

Thats a very good point. Imo, if the clampdown is successful on the illegal lettings ( which I think will be virtually impossible), it would certainly make prospective purchasers think twice about buying if they cant make money on the property

[kathml]

why do people have this idea that property prices will keep on rising in the twenties and thirties prices fell dramatically not rising again until the fifties

buy houses to live in not as a money making investment

[Michael]

Prices have not got to the bottom yet. There are THOUSANDS of completed but unsold houses of all types and apartments. Most are owned by banks now. They are not even being marketed as the banks realise that the prices they would get would put people they have morgages with into negative equity further deflating an already declining market.

[Topacciolo]

I agree with buy what you like and don't miss out an opportunity. We got our last year, we found in on sale on many site on €130/135 and we end up paying €100 so I was very please with that. Right now I don't really care how much it worth. I came here when I want, the apartment it's beautiful and the location is great. Yes maybe if I was looking for one now I could save some few £ but you can say that now, tomorrow on in 2 years time. Property prices will always go up and down so I agree on not buying when it's pick price but after that everything goes!!!!


Topacciolo

[mossy]

It's all about location and tenerife is a great one as long as they keep a lid on the volcano:lol:We'll be moving there soon renting first of course and if the right property at the right price shows up why not buy,what we save on rent will offset any decline in the property price.

[Angusjim]

Its a year on for this thread so what happening with property prices / sales ? the situation if anything is now more confusing has anyone put on hold buying until it is clearer exactly what the rules are to be. To agents what do you now advise clients who are thinking of buying on Touristic complex, as its not so clear as many of the so called experts on the forum were intimating. I fear a lot of foreign investment could be lost to the islands because of the current farce

[fixer]

Its now not so clear if you should buy in a residential or touristic complex it depends firstley on your financial situation if you need to rent then residential is not for you then maybe touristic may not be for you iether depending if you can do your own lets or as the law states you have to go through the exploiter . Values in Elmirador ect have went down i see some advertised for 135,000 euro they were 160,000 off plan advertised prices on our complex have not went down however thats diffirent from what they sell for and like me a lot dont need to sell and lettings still good for now!

[CIM]

Illegal lettings impact
All this illegal lettings malarkey is definitely impacting sales - or it is if you are honest about it to your clients. Still hearing of other agents not making clients aware though. Had a Belgian client recently looking at buying in Palm Mar until we told him the situation, he had been out for 3 or 4 days with a Belgian agent who insists he "wasn't aware" of the laws.... I tell people whats happening, I send them links to this forum, to Janets site, tell them to do their own research in addition to my advice and its up to them. I have just sold a property on a residential complex and the owners genuinely have a lot of friends and family who will be using the apartment when they are not. They wont be taking any money off their family and are going to ask their friends for a contribution equal to their costs per week. No advertising and not for commercial letting so that seems fine. Got me thinking though, could a UK LTD company buy a property here for the use of their staff? So long as it is not advertised and staff arent being charged no law is being broken even though you may have different people in their every week.

Residential property sales
I have spoken to 3 owners recently about selling their residential properties - 2 apartments and a villa. The first apartment was overpriced by around 30%, the second was overpriced by around 33% and the villa was overpriced by around 27% (Oh but it has lots of rental bookings and good income... :) )

None of those owners seem able to face facts - their properties are way overpriced and will not sell for what they are thinking. They get angry, frustrated, say how rubbish the agents are who have their properties listed because they aren't getting them viewings etc. Two of them at the end of the discussion said "Well just put it up anyways and we´ll see what happens..." One of the owners who needs to return to the UK said "I´ll not come down, I´ll just lock it up, I´ll lock it up I will" - My advice - Well lock it up then - unfortunately no-one cares and no-one is going to come anywhere near your asking price. Why ask me to list it when the price is ridiculous and it wont sell? Rod for my own back... so I move onto the next seller and let some other agent waste his time with these ones. It´s frustrating but what can you do if people dont want to hear the truth and wont price their properties at anywhere near a realistic level?

Bank repossessions
The market overall is ticking along, sales continue but obviously if sellers arent competitive then they arent going to get much interest. Banks with repossession properties are getting a bit better with pricing but some of them are still a million miles from reality plus from the market I target, only about 1 in 70 or 80 properties are actually appealing and worth listing. Banks make the same mistakes as property owners. I have had two properties reduced by a bank recently to prices lower than the offers I put in on them 12 months ago for clients - I tell my buyers and they simply make another offer on the new price - and the bank turn it down again!!! :)

Sizing up and valuing a property
After listing a property I can get a good feel for how well priced/in demand a property is. My property listings are immediately sent to over 2,000 people who have opted-in to receive property offers. So I see how many people click through the email, how many delete it without reading it, how many go to the website to take a look and the average time people stay on the page. If all of these figures are pretty high then that is a good indication that the property will sell fairly quickly. If all indicators are low then that generally shows the opposite and I can show owners what sort of feedback the property is receiving.

Property prices over the next 12 months
I still think prices will fall more in the residential areas as 80%+ are still overpriced there and the market for residential properties has reduced significantly. I´m talking about places like Chayofa, Amarilla Golf, Roque del Conde etc where previously people who lived and worked here, good jobs, good earnings would have been buying these - that segment though has been decimated by job losses, lack of credit approval from banks etc and the result of that is that those people just are not around anymore in anything like the numbers they were 4 or 5 years ago. Large supply, little demand - prices fall....

The main buyers of these properties now are people moving over here, 50+ age group, semi retired or retired and buying cash. They want good quality at realistic prices and they have the money to move quickly so sellers have options but they also have a lot of competition.

Finding the best property deals
Right now there are some really good deals around on appealing properties, nice complexes, good areas but they are vastly outnumbered by all the rubbish being punted about by sales staff desperate to get a purchase through so they can pay their rent next month! So buyers need to do a lot of searching and researching, ensure they know roughly what sort of price per sq metre they should be paying, what the average price of a 1, 2, 3 bed is in the area they want, whether the banks have anything in the area, separate the wheat from the chaff and work out what sort of realities offer they should be making.
Or, they could find themselves a good agent to work with who can do all of this for them :wink2:

[Angusjim]

Or, they could find themselves a good agent to work with who can do all of this for them :wink2:

Anybody you could recommend :cheeky: