European Second Home Prices Wilt in Drought

Spain and Portugal have suffered one of their worst droughts on record this summer, with consequences from empty swimming pools for the tourist to economic disaster for farmers losing their crops and livestock.

Roger Munns, Managing Director of Tribune Properties, predicts that property prices in the two European countries could drop as much as fifteen per cent in some areas as more owners decide to put their villas and apartments on the market.

'For many owners of second homes the original motivation to buy was to have somewhere they could spend time in a relaxing environment. Coupled with the thought of a good investment for the future, the market for overseas homes from buyers in the UK, Germany and Scandanavia has really taken off in the last twenty five years.

But soaring temperatures and a strain on the water supply could have consequences for their rental returns next year, which many owners rely on to meet their overseas mortgage.

Many holidaymakers want to rent a villa with a pool ? but the attraction soon goes if the pool is empty. Some golf courses are having to cut down on watering their greens too, and it won't take a big fall in tourism to mean the difference between breaking even and not being able to meet the mortgage commitments for some overseas property owners.

This autumn could see more properties than usual being put on the market, with a consequential fall in prices'.

Early warning signs of a potential fall in property prices have already been seen on the Spanish Mediterranean island of Menorca, which has enjoyed better rainfall this year than the Spanish mainland and no water restrictions, but some villas being cut in price by over ten per cent.

Water restrictions on the mainland are having an impact on potential villa buyers, with many questioning the value of a swimming pool when they might not be able to use it.

Portugal has recently asked Spain for 6 million Euros in compensation, as water levels in the River Douro which runs through both countries fell below limits established in a bilateral agreement,with Portugal coming close to accusing her neighbour of stealing her water.

Good Time to Buy

'For anyone considering buying a property in Portugal or Spain, this September and October could be the ideal time to buy', say Tribune Properties. 'Unusually many properties were being reduced in price in August, traditionally a good month for sales.

We normally see villa and apartment prices being dropped mid September onwards when the tourists and potential buyers are thinner on the ground as some owners are keen to sell and don't want to wait until the following Easter before having a real chance of selling again.'

The drought isn't the sole cause of property prices falling add Tribune Properties, saying it has accelerated price falls and come on top of an already poor year for many estate agents in Europe.

'A good barometer for European property are the tax havens of Monaco and Andorra which don't rely on 'tourist' buyers, but usually have a steady supply of buyers interested in taking advantage of the zero income tax rate. Andorra is in the Pyrenees and has no water supply problem ? but estate agents were twiddling their thumbs this summer waiting for buyers to show ? and they didn't.

Monaco similarly has had no water supply problems, but has also seen a lack of buyers. The tourists are still visiting the Principality and hotels in Monaco and Monte Carlo have been as busy as ever, but again there is a lack of serious property buyers, and negative property inflation is quite possible in Monaco this year for the first time in a decade.

With more property available on the market we would suggest buyers draw up a list of three or four villas they have viewed and liked, and then suggesting to the owners that they would consider buying at fifteen per cent below the advertised asking price to see which ones are prepared to consider it.'

Sea Water

One possible answer to secure the long term tourist trade and consequential property market is to follow Malta's example of building desaliniation plants, converting sea water to drinking water, sometimes known as 'reverse osmosis'.

The Mediterranean island competes with Portugal and Spain for the attention of second home buyers, and has a healthy tourist industry ? despite having no rivers and low rainfall, allowing the island to function normally even in drought conditions.

The water from this source can be used for agriculture and ensuring adequate reserves to fight forest fires for example - it might just be the answer too for the swimming pools and golf courses ? and would allow a plentiful supply of high quality for domestic use.

For details of hotels in Monaco, Monaco's weather, a map of Monaco, the Grand Prix and direct contact details for the Hotel de Paris, Columbus Hotel and others visit http://www.yourmonaco.com

For property and real estate in Malta http://www.maltaproperty.info and for Andorra property http://www.propertyandorra.com

---

Selling by Owner Escrow or Closing Checklist

Home sellers should keep on top of their pending sale;... Read More

Listing Real Estate Online - Top Tactics for Boosting Sales

Listing real estate online can be a great way to... Read More

Choosing a Residential Lot

Finding a lotPlanning for your new home is a very... Read More

New Home Construction - The American Dream or The American Nightmare?

Buying a new home is suppose to be the American... Read More

Where is the Sophisticated Property Investor Putting his Money?

The Traditional FavouritesOver the last five to ten years, UK... Read More

5 Hot Tips for Successful Real Estate Investment

The last downturn of the global stock market saw millions... Read More

Buying Property In Spain

It's high time someone advocated the use of common sense... Read More

How to Use Design Psychology to Stage Your Home for a Top-Dollar Sale

A new business venture to help home sellers, home staging,... Read More

How to Use the Internet to Help Your Apartment or House Hunting

So you are looking for an apartment to rent or... Read More

How to increase the Saleable Value of your Home

When selling your home, you'll want to fetch the best... Read More

Creative Real Estate Investing

With a job that paid $3.40 an hour, I saved... Read More

Estate Agents on the Costa Blanca Spain

Properties for sale or to rent on the Costa BlancaAs... Read More

Reinventing Real Estate, Part 2: Online and Empowered Consumers Are Taking Charge and Paying Less

Demanding consumers"Internet buyers tend to be better informed on market... Read More

How To Get More Money For Your House

If you are thinking about selling your house, you should... Read More

Dont Forget to Ask About Restrictive Covenants

Homebuyers, especially first-timers, may not think of asking about restrictive... Read More

Do You Need to Download a Landlord Inventory On-Line Today?

Do you need to download a Landlord Inventory on-line now?... Read More

Preparing To Make A Zero Down Offer

I'm going to focus... Read More

Real Estate Investment - One Simple Formula

I saw the ads in our small-town newspaper for years... Read More

Internet Battleground for Future of Residential Real Estate

Real estate agents are gearing up to face the biggest... Read More

Finding a Great Listing Agent for Your Home: 8 Tips

If you've decided to list your home, you'll be paying... Read More

Trading Inspectors!

As sure as the spring flows at the Fountain of... Read More

Market Reaching its Peak

I do not profess to "Know" what the real estate... Read More

Questions Investors Should Ask When Buying and Selling Investment Property

If you're a real estate investor, here are several questions... Read More

How Can the Average Person Build Wealth in Real Estate?

Books on real estate are a dime a dozen-and most... Read More

Real Estate Wealth Protection Through Short Sales

Is a sharp correction in store for the real estate... Read More

Buying Land For Development Requires Careful Planning and Execution

From the desk of Colm Dillon ... Author "Residential Development... Read More

Negotiating and Sales Skills Are Critical

When I first started getting active in creative real estate,... Read More

U.S. Real Estate Sought By Foreign Investors Due to a Weaker Dollar

The weak US dollar has been good news for real... Read More

Sell your Property Faster

Learn how to sell your property faster and at the... Read More

Negotiating the Real Estate Contract

Negotiation is the process of communication back and forth in... Read More

Investing in Real Estate & REITs

Real estate investing runs the gamut in terms of risk... Read More

Home Selling: How To Set The Right Asking Price

Many homes remain unsold for a long time because they're... Read More

5 Secrets for Surviving a Real Estate Market Downturn

History repeatedly serves to show us that the real estate... Read More