Return to reality real estate

Two interesting points worth raising as to what has been happening this summer in the housing market are one; the spectacular rise in stock market prices of listed property companies during the month of August, and two; more investment vehicles are being created to invest in the property market now, as many feel that prices may have bottomed.

The stock-market rally has seen several listed real estate firms, led by Reyal Urbis, benefit from increases of up to 250 percent in their respective stock market price. This situation has been repeated throughout the rest of Europe too.

Regarding the future of property investment, three world leaders in the industry, Sam Zell, Hines and Gerald Ronson, have recently created investment vehicles to seize the opportunities that this market currently offers, as they perceive that prices will not go much lower. Add to this the many investment institutions, especially those with private capital, and a significant number of American traded REITs which have increased liquidity available, via capital increases, to address what many consider a new wave of purchases within this segment.

The main problem of the Spanish residential property market, though there is clear evidence of a rebound in home sales and a slowdown in falling prices. Coupled with historical lows of the Euribor rate, this should be sufficient cause for the market to be encouraged, but the selective credit restrictions applied by the banks, exclusive for their own interests, to promote sales of the homes they bought in exchange for debt or contract, mitigate greatly the effect of these monetary conditions as favorable. It has hard too not to forget that unemployment continues to increase and improved employment prospects are some way off right now.

Many commentators, once bullish of the property market rises, now aim to become harbingers of an alleged recovery, contributing with their audacity and ignorance, to create more confusion in the market.

What remains to say is that nobody knows or can predict the future but we continue to uncover well-priced property in great locations, and there are still buyers around, whether from Holland, Norway, the UK or even the local Spanish market, looking around, making offers and buying homes in this stunning region of Spain.