Spain sells off quarter of state-owned properties
Indeed, Spain’s economy is still struggling against the weight of national debt. Its EU target is to bring the deficit down to 3 per cent if GDP by 2016. Last year, the deficit stood at 7.1 per cent.
So Spain followed in the footsteps of many other European countries, including Greece and Italy, as Prime Ministe Mariano Rajoy looked to the country’s substantial catalogue of state-owned real estate.
Photo credit: Pepe Rodmon
Last year, the government sold a string of vacant state buildings to claw together €90m, then racked up another €37.5m from renegotiating rents.
Rajoy also used a parliamentary commission to draw up a list of assets that could be sold off to private investors in a drive to raise even more millions.
The list of properties includes an aerodrome on the island of Minorca, a military shooting range, a disused army barracks and thousands of office buildings, reports The Telegraph.
10 of the properties will be “unique”, according to the government, which hopes they will attract investors in particular.
The full portfolio has not yet been revealed but the first pieces of real estate to go under the hammer will be the old HQ of Spanish state TV station RTVE.
“There will be some real gems in the portfolio I am sure but also a lot of dross," Mark Stucklin, founder of Spanish Property Insight, told the newspaper.
"Those properties that will be sought after are those of historical or architectural interest in the most sought after areas of cities. But it will boil down to the price. There will always be interest in good real estate by foreign investors if it is sold at a bargain."
Indeed, Spain’s low prices saw the country reclaim the top spot in TheMoveChannel.com’s Top of the Props report this month, becoming the most popular destination on the portal, accounting for a record high of almost 1 in 3 enquiries.
And yet the country’s sales dropped in the first quarter of the year, according to the Ministry of Public Works. Private housing market transactions decreased in volume by 29.8 per cent compared to 2012, as the amount sold fell from 9.4 million euros to 6.6 million. The number of transactions also fell by 18.7 per cent year-on-year.
At the same time, the Spanish Land Registry’s data shows that property sales jumped 28.73 per cent compared to the final quarter of 2012, as values dropped 2.32 per cent in the first quarter of 2013 to make Spain’s bargain holiday homes even more affordable.
Indeed, the year-on-year recorded by other groups may partly stem from the expiry of the country’s tax breaks, which saw investors bring sales forward to before the end of the year.
But one thing is certain: with unemployment at 27 per cent, domestic buyers cannot afford to splash out on property, state-owned or otherwise. International buyers, though, are taking advantage of the financial malaise. According to the Land Registry, foreign buyers accounted for 8.63 per cent of purchases in the first quarter of 2013, higher than the 4.24 per cent recorded in 2009 and almost back at 2006 levels.
Indeed, in 2012, foreign buyers of Spanish property surged by 28.4 per cent, according to the General Council of Notaries, while the Bank of Spain found that foreign investment grew by 17 per cent last year, with foreign nationals spending over €5.4m on Spanish property, the highest volume of international investment in eight years.
This year, both Mercers and Taylor Wimpey Espana have seen their sales continue to climb. The housebuilders TWE found sales in the Marbella area soared 300 per cent year-on-year, while agent Mercers enjoyed a 25 per cent increase in sales compared to the first three months of 2012.
The figures are a promising backdrop for the state’s latest desperate measure, which will even see La Almoraima, a finca in the Natural Park of Alcornocales, sold with the option to turn it into a golfing resort with a hotel.
A spokesman at the Ministry of Environment, who have owned La Almoraima for decades, commented: “Our best hope is that we can generate foreign interest as there are few in Spain right now who could afford it.”
Agents with non-state-owned property will be thinking exactly the same thing.