Friday 29 February 2008

Interview with Jose Luis Hernandez, President of Polaris World


The president of Polaris World predicts that the largest promoter in the Region of Murcia will be handing over more than 3,000 properties to new owners during 2008.

The year 2007 has been, as you say, the best in its history. What does 2008 bring?
We hope to at least maintain last years results. It is a more complicated market: the customer is no longer as receptive to buying a second home as they were a few years ago and we must target our customer with more accurate communication. But we are still confident we will have a good 2008.
How will you survive the "crisis"?
Our product is sufficiently competitive to maintain customer interest. The customer remains interested as long as there is a competitive product. In addition the client continues to have purchasing power to acquire the product.
The industry seems to move towards a true partnership. How do you see this?
There are other builders of similar size searching for synergies and which individually cannot undertake certain initiatives, such as paying for a campaign on television. But with our sales volume we do not need partnerships, and we can undertake such initiatives on our own. But we have partnered with certain residential tourism associations, such as Live in Spain, where there are other developers and builders within the sector. At our level we also need to belong to a number of associations and Live in Spain provides, among other things, research and general promotion of the sector.
The main promoters of the country have created the G 14 to offer with one voice their views on the industry. I do not know exactly their intention. I speak of residential tourism. The initial purpose of the G 14, with companies whose investments are generally in the field of residential housing, is to create an atmosphere in the subject property. Live in Spain in addition to promoting a good image promoted commercial initiatives, such as assistance to joint trade fairs.
How can a company like Polaris World combat the feeling that the market will go down?
The main problem is that the customer thinks that now is not the time to invest in a second home. We want to demonstrate that at least in regard to our product this is not true. A two-bedroom apartment in one of our residential, with its surroundings, with their services and with their qualities, for 119,000 euros, is a purchase that remains very competitive and a good investment. So we intend to counter that trend.
What about the Regional "Ley del Suelo"?
We must have a legal framework in place which is flexible enough for the sector to continue its viability, which is not conducive to the bureaucracy that, put simply, be flexible enough to not paralyze the property business. One of the sector's main problems is the slowness in processing Urban licenses. That artificially lengthens the production process and reinforces cycles with periods of peak demand for excess soil and other oversupply. I do not think that is appropriate for a company to say how the law should be but we can give suggestions for making a legal framework more suited to the reality.
How long does the legal framework take for a typical profect?
This could be understood as a criticism but at the regional level, there has been a simplification of procedures environment in the past few weeks and it appears that the legislation is moving toward streamlining the bureaucracy. I think we can expedite over several months, which is a long time. It also depends on the legal basis of the land. It is not the same process to change rustic land to obtain building permission compared to that where we have land already approved in a plan or a partial draft urbanization.
What policies could exist to allow more people access to housing?
Until recently there was more demand than supply, that led to the prices going up and up. But if you eliminate distortions that exist in access to land that also means that you cannot speculate with it - put simply intervening in the supply and demand of land will remove a distortion. From there evolve all the processes leading to building a house.
Some voices in the industry say that if purchases are retraen can lead to a sharp rise in prices in the short term. Does that analysis mean once again an escalation of prices?
At any time prices can start to increase, but I doubt that is going to happen in 2008. What we have not seen recently in the property market is a scenario of price decreases. The increases tend to be smaller, but not down. This year's increase was modest, but there has been increasing. In 2008 no doubt prices will continue to rise. In the second home market in general, I do not think we are going to have large price rises because demand is not as high as before and I do not think that the promoters can choose to raise prices.
What impact will the rental aid policy have on the sector ?
You can and should allow access to housing for people who have difficulties. That can energize to a certain extent the sector. What is not known is whether they will be assisting 20 or 20,000 people, and even if will produce the desired effect. I am not saying that will be the case, but the landlord can raise prices in the knowledge that his client has 200 euros a month for aid. The effects we will see in the coming months.
Is it more desirable to encourage the purchase or rental of housing?
The two measures are successful, but I do not believe that they are themselves the only solution. This market includes much more than housing or rents. To energize a market as important as this are more structural changes. When you want to energize a sector of the importance of it in Spain you have to think much more in a big way.
What effect will the British market have?
The UK remains our main market, and we forecast a very promising 2008.
And the rest of the euro zone?
What we have seen is that all the markets in which we are active are going to behave in a similar manner in 2008 to 2007. Sales in Scandinavia are reasonably good, in Ireland, they are also reasonably good, in the Benelux countries and in Germany, they are more discreet. We have even launched initiatives to grow. We have opened an office in Paris and another in Finland to complete our work in Scandinavia. Therefore we have ambitions and clear indications that we can increase our activity in the euro area.
What is the difference between your product from that of other similar companies?
Quality, not only in housing,but the environment and also in services, far higher than our competitors for a price about 30 percent below. In a market with fewer applicants the demand is concentrated on the most competitive products. We believe that our product is the most competitive market and that the client is taking the wise decision to address it.
How do you get that competitive?
We have a good cost structure. Starting with the land, followed by construction costs, which we have optimized thanks to the fat that we have our own construction company, and we are going through a rationalization of the design of the house. From there we have come to a product that we can produce at a reasonable cost that we add a reasonable margin to the sale.
What volume of work is expected to be not directly related to housing?
In two to five years, we expect to come close to 25 per cent. In those other sectors, which are basically sales of furniture and tourism operation of our tourist infrastructure (golf, hotels, restaurants) we have yet to reach maturity.
What part of future turnover will be linked to the developments that are taking place in the town of Alhama?
Maybe we can talk about 60 percent over the next three years.
What element managed to unlock the deadlock that existed with the draft plans for Alhama?
Maybe more time was needed to be understood by those who were responsible for approving it. The project also has matured in this term have been consolidated by our guarantees with improvements in made already in infrastructure, communications, all of the requirements that are demanded by those who were responsible for approving it. To the extent that this has been consolidated and agreed. But this project has never been against it on principle to any political group of those who have spoken in its final approval. There were constraints as understood by those who had met to approve it has been consistent with his original idea and have approved. There has never been an opposition to the project itself as a matter of principle, no matter what may be understood by the press and such.
What timing of completion of developments have on the region?
This year we will deliver our first homes in Condado de Alhama and Terrazas de la Torre, another resort that we have in Torre Pacheco. We are talking about starting with the delivery of more than 3,000 homes during 2008. I believe that no company in the sector has some very ambitious plans for 2008.
And outside the region?
Our expansion plans are in the region, where we have many things to do. Geographical concentration in the Murcia region is an advantage for us. This is what has allowed us to create concepts like the Nicklaus Golf Trail, a circuit with the nine best golf courses in Europe in less than 25 kms, and gives more substance to our facilities that we can offer. The geographical proximity means that everything has a conceptual sense for the customer which is much more complete. A client, for example, can use our free transport and play nine holes in the morning in a resort, eat there, take that transport to go play another nine to another in the afternoon and dinner in addition at another site without having left our residential complexes. We are interested in a much richer experience than if we were to have one resort here, another in Huelva, one on the Costa Brava… that would not be the world of Polaris but another world.
Are they going to maintain in the future the situation shareholder after the changes were no more than a year ago?
It is not a goal of having a Polaris World shareholding structure of this kind or another. The partners, as far as I know, they intend to stay for the time being, and are pleased with the progress of the company. It looks to be during 2008 and 2009 and tell.
And a stock market listing?
It has been considered and the response so far has been that it is not a target for the shareholders of the company being on the stock exchange. So, stock market in 2008, no.

Reprinted from La Economía newspaper

Tuesday 26 February 2008

New Airport in Murcia - Corvera

Just when you thought that every aspect and area of Spain had been explored, every secret delight of this stunning European nation had been uncovered and that each pristine beach, vibrant city and cultural and historic sight had been seen, the Spanish authorities announce that a brand new international airport is to be constructed in a hidden corner of secret Spain.
This new airport in Corvera will open up the skies and indeed the entire region of magnificent Murcia to a global audience, revealing a brand new holiday hotspot in one of the leading travel and tourism destinations in the world for us all to explore and enjoy.
The autonomous region of Murcia is tucked away in a lesser known and once secluded part of south-eastern Spain. It has a fabulous Mediterranean coastline, an enviably attractive climate, a vibrantly exciting regional capital city, the largest saltwater lake in Europe, a wealthy cultural heritage, property prices well below the national norm and now, an emerging and soon to be booming tourism and real estate markets.
If you’re seeking a brand new Spanish holiday hotspot or if you’re looking for a corner of Spain in which you can live, retire or invest in property whilst remaining confident in the knowledge that you’re getting in ahead of the rest, Murcia will be your destination of choice in 2008, and here’s why: -
The region of Murcia will see construction of its international airport begin in 2008 with construction time estimated to take just two years. The region’s councillor for public works, housing and transport, José Ballesteros, is said to be confident that the airport’s private owned status will mean that it can attract low cost airlines and provide travellers with low flight costs and greater flexibility compared to state owned airports. It is understood that Mr. Ballesteros has already been in meetings with the lower cost European carriers such as Ryanair, Air Europa, Air France, Iberia and TUI which bodes exceptionally well for the likely number of tourism arrivals that the region can expect when the airport comes online as early as 2010.
Current predictions for the increase in arrivals that the new airport will bring to Murcia are in the region of 1.5 million passengers when the airport opens, increasing to over 5 million by 2015 – and if you’re going to be one of these passengers you will benefit from easy and affordable access to one of Spain’s most beautiful and unspoiled regions.
Murcia embodies diversification in terms of the travel and holiday experience it can offer its visitors. From the fabulous Mediterranean coastline with its soft sandy beaches, pretty fishing villages and inimitably evocative ocean views, to the mountainous and rural interior where the landscape is stunning, the climate is perfect and the lifestyle is so life-enhancing and laid back. Whatever type of holiday location you prefer, you will find it in Murcia.
Not only can Murcia offer visitors a laid back holiday location, it is home to a city of the same name where holidaymakers and residents alike are treated to a vibrant and positive atmosphere and where they can enjoy an exciting café, bar and restaurant scene, where they can indulge in fantastic retail therapy or take in the historic attractions of everything from the world famous Santa Maria Cathedral in Murcia to the Almudí Palace, from the Monteagudo Castle to the Ramón Gaya Museum in the Plaza Catalina.
Property prices in Murcia have completely defied the national norm in recent months. Whereas prices for homes in many of the most well known areas of Spain have declined in the last twelve months, prices in Murcia have continued to rise steadily at about 4% year on year At the same time, it is worth noting that the Kyero.com Spanish House Price Index records the median price of a home in Murcia as lying well below the national average, proving that there is plenty of room for price growth over the coming years. Interest in property for sale in Murcia has been increasing ever since talk about the proposed airport began. Now that construction of the airport has been given the go ahead, local developers are witnessing a strong increase in interest.
Predictions for the coming year are for a gradual rise in demand as Murcia is one of the fastest growing regions in Spain anyway, and a new international airport will further drive growth. The supply of property in the holiday home market has increased over the last 3 years and demand had been struggling to keep up. Therefore prices are currently very attractive but should naturally begin to rise towards the end of the year as demand begins to take over supply. The demand in the retirement or early retirement market still vastly outweighs the supply so prices will increase more in this sector. This is where Spain is still a firm favourite versus emerging countries.
Murcia is affordable, it is about to become highly accessible, it has one of the best climates in Spain, it is not over developed, it is rich in culture, history, heritage, gastronomy, nature, sport and leisure. It is a region in which to live, to retire, to enjoy a holiday and what’s more, it is one of the corners of Spain where there is still a buoyant property market, where prices remain affordable, where the real estate for sale is expansive and exclusive and where an investment made today could well reap significant dividends, gains and yields over the short to medium term.
Whether your interest in Spain lies in finding a hidden corner in which to lay your hat and find a home or in holidaying in a highly exciting emerging destination, Murcia embodies the realisation of all your personal interests. It is quite possibly the final part of Spain to be made so much more accessible thanks to the new international airport, and it is certainly a region of this beautiful nation that should not be overlooked or ignored for a moment longer. Discover the real Spain, visit Murcia.

New initiative launched by Polaris World


Polaris World have launched a new initiative called Polaris Collective Inspection Trips which is designed to offer a higher level of support to its agents by offering business class flights to perspective buyers. Open to anyone who might be interested in one of its luxury properties, Polaris World believes it will help to engage potential buyers and those who could not justify the cost of such a trip.“Polaris World will be carrying out the collective inspection trips over the next few months and each trip will comprise of an exciting package to provide an additional incentive for clients to attend,” said a spokesperson.

The first trip took place on 16-17 February 2008 and Polaris World arranged for the flights from London Gatwick to take place on ‘La Saeta’ - the exclusive plane of the Real Madrid football team. Also included in the trip is an overnight stay at a 4 star hotel with breakfast, lunch and dinner included courtesy of Polaris World. A limited number of seats are available therefore book now to avoid disappointment.

Contact us at Ultimate Homes on UK 0800 389 2314 or in Spain on 902 888 174

Monday 25 February 2008

Mayor accuses ITV of "damaging the image of Benidorm".




The Mayor of Benidorm, Manuel Perez Fenoll, claimed yesterday that the British ITV television channel intends to "damage the image of tourism in the city" with the issuance today of a program on crime in the city and thefts apparently suffered by British tourists. The program, which will be broadcast on prime time TV, concerns incidents of robbery committed on British holiday makers during their stay in Benidorm, as well as property break-ins against Brits resident in the Benidorm area. Perez Fenoll alleged that the said station seeks to "damage the image of the city" with "dark interests" as intended "to divert tourists from the UK to other competitors." In terms of the content, the mayor stressed that the program had no basis and was made up of "lies, fabrications and not focused on the reality: we are the safest tourist destination in the world." "Here people are not afraid to go out at night on the streets at any hour, that they know more than five million tourists who visit us each year," he added.
The report also echoes of the presence of organized crime gangs from Eastern Europe and British who have lost their lives in the streets of Benidorm. The Mayor indicated that it is a "new media attack" because, with regard to Benidorm it is a "destination to shoot down, the city that arouses most jealousy."
However, he announced that he will meet with police chiefs to discuss the situation and "take action if needed" to ease the climate of insecurity amongst the foreign community.
Perez Fenoll already stated in December when a team from ITV first travelled to Benidorm to talk to British victims of robberies. Their statements led to the British residents launch a campaign for collecting signatures, believing it was true that there had been an increase in crime. The insecurity does not correspond to reality, according to sources within the local delegation of the Government, ensuring that armed robbery with force in homes and establishments have dropped by 50% in the last four years.

Tuesday 12 February 2008

Record number of tourists in 2007

Spain is still a massive draw for holidaymakers, with statistics showing higher tourism levels than ever.
Spain’s tourist board are celebrating a successful year after figures have revealed record numbers of foreigners visiting the country’s holiday hotspots last year.
During 2007, 59.2 million overseas visitors descended on cities and coastal resorts, 1.7 per cent more than 2006, with the Industrial, Tourism and Trade Ministry reporting that Andalusia was among the most popular destinations, especially areas along the Costa de Sol.
The main market is still the UK, with Britain accounting for 27.5 per cent of all foreign visitors, though Spain is also becoming increasingly popular with North American visitors, with the number of arrivals from the United States rising from 22 per cent to 1.1 million.
Britain’s passion for Spain’s holiday and property market is partly due the abundance of low cost airlines linking the two countries, making trips to Spain easy and affordable. Low cost airlines are credited with carrying 24 million passengers to Spain over the past year, an increase of 34 per cent from 2006. Ryanair are the overall leaders with 5.4 million passengers, followed by Easyjet with 4.2 million.

Tuesday 5 February 2008

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Half of Spain's real estate agents closed down in 2007.


This has the ring of urban myth, but the number is so huge it seems worth repeating: the API, the trade association for Spanish property agents (of which we are members), is reporting that 40,000 estate agents — half the estate agents in the country — closed down last year, in the wake of the slowdown in the market. As a result, it is believed that as many as 100,000 property agents lost their jobs last year.
Many of these "agencies" were likely speculators and “short term profit hunters,” who moved into the market hoping to catch the wave. Many of the agencies may have been nothing more than one person with a cell phone, said API group president Santiago Baena.
So, assuming Spain lost 40,000 estate agents last year - that means that there are still another 40,000 of them still in business. My guess is that there are fewer than 10,000 'real' estate agents and that 2008 will see more of the 'man with a cellphone' fade away - I certainly hope so.
There's another Spanish association of estate agents called GIPE. API and GIPE between them have 7,000 members. Assuming that some estate agents belong to both organisations, that probably represents a real 5,000 individual estate agents.
In Spain, in 2006, 1 million property transactions were recorded, yet the two largest Spanish property portals - Fotocasa and Idealista each only list 250,000 properties - largely the same ones.
Where are the other 750,000 properties? Personally, I think fewer than 2,000 estate agents advertise and actively promote properties for sale in Spain. They account for the majority of those 250,000 properties - the rest are still 'represented' by the 30,000 or so 'men with a cellphone'.
My point is that the estate agents that do advertise on the various websites also including Kyero and Think Spain are the cream of the crop - they're the ones actively trying to promote property and investing money to do so.
Does this mean that each and every one is honest and scrupulous? Definitely not - but they're light years ahead of the 30,000 who remain anonymous and have made no such investment or commitment.
The Spanish property market is unregulated and largely non-transparent. I think agents who voluntarily belong to a trade organisation and who actively promote properties, should be commended just because they have chosen not to operate at the lowest level possible.
If you're buying property abroad and are worried about being ripped off, ignore the 'men with cellphones'. You could do a lot worse than working with an agent who is investing in their business and who belongs to one of the trade organisations.
For the record, we at Ultimate Homes have always believed that there is a responsibility on the part of the real estate industry in Spain to set out clearly the procedures which apply to both clients and other agents, so that there are effective consumer safeguards in place. Also as an A.P.I. agent member (Colegio Oficial de Agentes de la Propiedad Inmobiliaria de Alicante No.0877), we belong to the Alicante Chamber of Real Estate Agents, regulated by the Spanish Government. There are many real estate agents in Spain but very few work within a regulated environment and in a legitimate manner.

Tinsa €/m2