Tourism minister Biel Barceló does not wish to hinder economic activity in Mallorca's interior municipalities. Hindrance, as much as possible, will therefore be removed under legislation governing holiday rentals. The principle of zoning, by which municipalities with heavy tourist dependence are lumped together with those without this dependence, will almost certainly be prejudicial to the expansion (in legal, registered terms) of these rentals in tourist resorts. The more micro zoning, that within municipalities, will in all likelihood place greater restraints.
The devil will be in the detail that the Council of Mallorca has yet to reveal. It is responsible for eight zones on the island. Palma is looking after itself. Whatever the outcome of this zoning, the government, i.e. Barceló, states that the objective will be to ensure that ordinary people are able to find somewhere to live, especially those who work in the tourism sector and mostly only in the season (the definition of which is now being stretched because of its lengthening).
If the government said this when it first announced its intention to legislate, then it certainly didn't speak loudly about the issue of accommodation. It was not, so it seemed, top of the agenda. It has been forced onto the government by the scares over a shortage bordering on non-existence of accommodation and the advance of so-called gentrification - the takeover by tourists and by wealthy incomers buying up properties, partly (mainly?) for tourist rental purposes.
The government has reacted to these scares. It may now claim to be taking proactive measures, but that is spin. Residents associations, pressure groups and certain town halls were the ones who highlighted the problems, to which the government has now reacted through its words regarding the legislation. There aren't housing issues in interior municipalities, so these municipalities - within reason and legislative requirements - can have holiday rentals: proper, registered, legal rentals. The housing issues are in the resorts. The legislation may deprive them of the registered rentals, but it won't stop tourist rentals. The government's words are just that, unless mechanisms are in place. These involve, for instance, a reform of the tenancy act, something which is essential. The government, though, has to wait on Madrid for such a reform, which may not be forthcoming.
Barceló and the government have a growing crisis on their hands. More than one. Hackneyed expression it is but there is a perfect storm. Airbnb is not the sole factor by any means. Shortage of affordable housing is another. But even if there were more, where would be the guarantee that it would be purchased for residential use and by residents of these islands? What guarantee might there be of it being for residential renting? There is none. Speculation for tourism purposes is not confined to the higher end of the market.
The property developers bemoan a situation by which there is little scope for affordable developments. While they do this with a certain amount of self-interest, they have fewer problems (seemingly) with the higher end of the market. Let me cite an example. On an urbanisation in Playa de Muro, two luxury properties - totally out of keeping architecturally with others - have risen up on a plot once occupied by a bungalow. A neighbour describes the development as "a disaster". There is a sign which gives contact details. These are summer-season holiday rentals. The character of the urbanisation is altering. It has long had second homes, but one-time second homes are now being turned over to tourist rental.
A further factor is foreign buying. In certain parts of Palma which aren't considered the most desirable, we learn that there is increased demand from foreign buyers. The town hall talks vaguely about ensuring the co-existence of the neighbourhoods. But how does it do this? It has no mechanism to regulate who buys what. The same applies elsewhere. The level of foreign buying is lauded because of a beneficial economic impact. But at what cost socially? And for what purpose?
The situation with accommodation has become particularly acute in Ibiza; it is out of control. At the weekend there was a demonstration. It called on governments - regional and the Council of Ibiza - to apply laws. Left-wing administrations have been in power for almost two years and have barely addressed the issues of the increasing accommodation crisis, of the loophole offered by the tenancy act and blatant illegalities. Demands for rent are scandalously high. The shortage of places is such that Aena has been unable to recruit because of the cost of renting, assuming there is availability. Small wonder, therefore, that Barceló has been shaken into saying what he now is regarding the purpose of the legislation.
Allowing towns like Sineu to have a few holiday rentals will make no difference. Something very much more fundamental is demanded. Will government have the guts? Words aren't much good, especially when they are reactive.
Showing posts with label Property market. Show all posts
Showing posts with label Property market. Show all posts
Wednesday, March 22, 2017
Wednesday, November 06, 2013
The Lawlessness Of Property
There are parts of Spain which have greater amounts of unoccupied housing stock. The disparity between an excess of homes and actual households is greatest in regions such as Andalusia, Galicia and Murcia. The Balearics, reassuringly perhaps, don't have quite the same problem.
This vast stock of properties, especially the ones that haven't been completed, is the consequence of the property boom that went bust. And a good number of these properties have ended up on the books of Sareb - the Sociedad de Gestión de Activos Procedentes de la Reestructuración Bancaria, or better known as Spain's bad bank, the one into which properties financed by the various failing banks were placed. Sareb, though it doesn't intend doing so straightaway, has a plan that will involve demolishing the uncompleted housing. Whether it will be able to shift those properties which are built is another matter. Some banks are taking massive hits on properties they are lumbered with, selling them in some instances for a quarter of their original prices. But with so many unsold properties available and with so many mortgage holders desperate to sell properties they bought at what proved to be inflated prices, there isn't anything like the demand to match the supply. There has to be a major rationalisation of the total housing available in some parts of Spain in order to take the property market out of the doldrums. It could take years and even then there would be unsold properties.
In the Balearics, though there isn't the level of unsold or incomplete stock as elsewhere, the market at the lower end remains depressed, even though sellers now do appear to be willing to let properties go at prices which are more realistic for the current circumstances. There are, nevertheless, always those sellers who want more. The stereotyping of the money-grabbing Mallorcan is not entirely inaccurate. I heard of one apartment in which a British buyer expressed an interest only for the price to shoot up by 30,000 euros. It happens and it has long happened.
The luxury end, so we are repeatedly told, is buoyant enough in the Balearics but this is small comfort. It just emphasises the enormous and growing gap in Mallorcan and Balearics society, one in which poverty levels are at record highs. It also emphasises, because much of the selling is to overseas buyers, the erosion of this society. Whether properties are being bought to actually live in, whether they are being bought as "residential tourism" properties or whether they are being bought for other reasons, they all amount to the same thing - the increasing colonisation of Mallorca from overseas.
Any number of factors have given rise as to why the Mallorcan property market is at is. On prices, a factor has been the cumulative effect of tourism. There is a direct relationship between tourism and its growth and the price of property. The construction of hotels, and the land they occupy, is one reason. But one should also look at what happened in the 1990s to appreciate why even relatively modest property went up in price. It was then that a construction boom was in full swing, and it was partly tourism-inspired. Apartments were gobbled up precisely because they were seen as investment opportunities for residential tourism, i.e. being let for holiday rental. There was also the euro factor. While the euro has been blamed for pushing prices up generally, its introduction created a major headache for those who were in possession of unbanked stashes of pesetas. They couldn't take these stashes to the banks for them to be converted for an obvious reason; the stashes were undeclared income. Black money. Mallorca's property became a target. In effect, property prices were artificially inflated because of money laundering.
On top of this came the willingness of banks to lend and not just for first homes. When economic crisis hit it became apparent that many owners of second, holiday homes in the resorts had bought them with mortgages guaranteed on their first homes. Even now if you look around residential areas in some resorts, you will see plenty of places up for sale.
Property markets are in some ways a law unto themselves, but in Mallorca and Spain they were at times virtually lawless. The speculative developments, some of which may not even be finished, were built on the sands of the boom times which proved, as mostly anyone with any sense could have predicted, to have been unstable. These were sands made of credit with little to support them and even less once crisis took over. And these developments are now worthless. The demolition gangs will be moving in, if not tomorrow but some time soon.
Thursday, March 18, 2010
Come Fly With Me - Or Not
Come fly with me. Just as I get an email about the Sinatra show and its lift-off for the coming season, so I also hear about flights grounded. Or rather, flights not flying. Don't fly with me.
The availability of flights has been an issue throughout the winter. There have been fewer flights and what there have been have not always been as convenient as previously. Stansted with Ryanair. I'd rather not have, but that was how it was. "The problem's the lack of flights. Look, there's hardly anyone walking past." I did look. The street outside the estate agency in Pollensa. No, I suppose there weren't that many people walking past. And the problem is, even at the luxury end of the property market (which is the end occupied by this particular estate agency), that the lack of flights means less potential for sales. The luxury end, which is meant to have remained buoyant. "Mike Oldfield has dropped the price of his place by a million," I say. Might not be representative of the market, they say. The celebs whack on a premium in the belief that someone will pay it in order to wallow in the reflected kudos. Casa Tubular Bells. Getting an extra million for your gaff. Like chasing moonlight shadows. At another agency at the luxury, luxury end of the market, there are a number of showings. I guess a number of showings is a euphemism.
Having been told about the sorry state of the airline industry, I find further support in "The Bulletin". "Majorca pays the price for a lack of flights," it front pages. Easter may not be that good if there aren't the flights. The paper's got its tourism insider at it again. The chap from Cosmos etc. etc. Talk about downbeat. Talk also about what we knew wouldn't be the case and the bleeding obvious. What did we know wouldn't be the case? That all the hotels in Mallorca would be open on 1 April. Thus reckoned the head of the hotel federation some while back. It was a daft statement, an April Fool. It was never going to happen. And isn't.
What do we know that is the bleeding obvious? That there will be a hiatus between Easter and when the season really kicks in some time in May. Hence, hotels - and airlines - schedule accordingly. We know all this. Why should it even be worthy of comment? Because someone - the hoteliers' boss - made the statement. And it seemed to be taken as fact. By some. Not by me. You just had to ask one or two hotels to get the answer and paint a more accurate picture. The press though. Ah yes, the press, as in The Bulletin. Never seems to question the statements. Taken as fact. And then there's the promotion. The tourism promotion for the islands. The Rafael Nadal adverts. They have not been screened in the UK and Germany. We know all this. And we know why the ads haven't been screened. Because of the upheavals at the tourism ministry and because one of the various tourism ministers, Ferrer, seemed to want to cut costs.
Just like Sky can put up some dolt of a footballer to say nothing or to say the bleeding obvious with no insight or no originality - and presumably pay handsomely - so the default position of the press is to front up with a so-called "name", be it the head of a tourism organisation or company, who offers a similar lack of originality or lack of anything challenging or controversial. It's mediocre. At best.
Tourism insiding. Same old, same old. The press's treatment is as depressingly familiar, repetitious, undemanding as the messages themselves can be depressing. But wait. This does not accord with other messages. That some hotels are reporting almost solid bookings through the season - already; that some businesses are feeling very optimistic and are going for new approaches and new ideas. I feel that old song by Allan Sherman coming on. "Camp Granada." The depressing refrain of "take me home, oh muddah, fadduh". Then suddenly, guys are swimming, guys are sailing. It's never as bad as you think, everyone, or as the press might portray it, or as depressingly familiar, repetitious and undemanding as the treatment.
Kindly disregard this letter.
Captain Chris Mackintosh
I'm extremely grateful to John Maclean for sending an obituary for a friend, someone who was well-known to many in Alcúdia. Captain Chris has died suddenly. I'm holding the obit back as it will go into "Talk Of The North" next week. But thanks, John, and for the lovely touch at the end:
"Farewell, my friend and fair winds. Fair winds."
Any comments to andrew@thealcudiaguide.com please.
The availability of flights has been an issue throughout the winter. There have been fewer flights and what there have been have not always been as convenient as previously. Stansted with Ryanair. I'd rather not have, but that was how it was. "The problem's the lack of flights. Look, there's hardly anyone walking past." I did look. The street outside the estate agency in Pollensa. No, I suppose there weren't that many people walking past. And the problem is, even at the luxury end of the property market (which is the end occupied by this particular estate agency), that the lack of flights means less potential for sales. The luxury end, which is meant to have remained buoyant. "Mike Oldfield has dropped the price of his place by a million," I say. Might not be representative of the market, they say. The celebs whack on a premium in the belief that someone will pay it in order to wallow in the reflected kudos. Casa Tubular Bells. Getting an extra million for your gaff. Like chasing moonlight shadows. At another agency at the luxury, luxury end of the market, there are a number of showings. I guess a number of showings is a euphemism.
Having been told about the sorry state of the airline industry, I find further support in "The Bulletin". "Majorca pays the price for a lack of flights," it front pages. Easter may not be that good if there aren't the flights. The paper's got its tourism insider at it again. The chap from Cosmos etc. etc. Talk about downbeat. Talk also about what we knew wouldn't be the case and the bleeding obvious. What did we know wouldn't be the case? That all the hotels in Mallorca would be open on 1 April. Thus reckoned the head of the hotel federation some while back. It was a daft statement, an April Fool. It was never going to happen. And isn't.
What do we know that is the bleeding obvious? That there will be a hiatus between Easter and when the season really kicks in some time in May. Hence, hotels - and airlines - schedule accordingly. We know all this. Why should it even be worthy of comment? Because someone - the hoteliers' boss - made the statement. And it seemed to be taken as fact. By some. Not by me. You just had to ask one or two hotels to get the answer and paint a more accurate picture. The press though. Ah yes, the press, as in The Bulletin. Never seems to question the statements. Taken as fact. And then there's the promotion. The tourism promotion for the islands. The Rafael Nadal adverts. They have not been screened in the UK and Germany. We know all this. And we know why the ads haven't been screened. Because of the upheavals at the tourism ministry and because one of the various tourism ministers, Ferrer, seemed to want to cut costs.
Just like Sky can put up some dolt of a footballer to say nothing or to say the bleeding obvious with no insight or no originality - and presumably pay handsomely - so the default position of the press is to front up with a so-called "name", be it the head of a tourism organisation or company, who offers a similar lack of originality or lack of anything challenging or controversial. It's mediocre. At best.
Tourism insiding. Same old, same old. The press's treatment is as depressingly familiar, repetitious, undemanding as the messages themselves can be depressing. But wait. This does not accord with other messages. That some hotels are reporting almost solid bookings through the season - already; that some businesses are feeling very optimistic and are going for new approaches and new ideas. I feel that old song by Allan Sherman coming on. "Camp Granada." The depressing refrain of "take me home, oh muddah, fadduh". Then suddenly, guys are swimming, guys are sailing. It's never as bad as you think, everyone, or as the press might portray it, or as depressingly familiar, repetitious and undemanding as the treatment.
Kindly disregard this letter.
Captain Chris Mackintosh
I'm extremely grateful to John Maclean for sending an obituary for a friend, someone who was well-known to many in Alcúdia. Captain Chris has died suddenly. I'm holding the obit back as it will go into "Talk Of The North" next week. But thanks, John, and for the lovely touch at the end:
"Farewell, my friend and fair winds. Fair winds."
Any comments to andrew@thealcudiaguide.com please.
Friday, February 06, 2009
You Don't Know My Name
Having several languages to contend with makes life confusing enough without there being the additional palaver which is trying to make sense of the names of different parts of towns, some of which come in different languages as well. Let's take Alcúdia as an example shall we. Yesterday, I was studying the telephone directory, as you do, and I realised that, for the purposes of Telefonica at any rate, Alcúdia, though in population terms barely 17,000 strong, boasts sufficient parts that there is one part per head of population. Well, that is a slight exaggeration, but there do appear to be vast numbers of them, and they don't necessarily conform with other classifications.
As far as Telefonica is concerned, these are the different parts of Alcúdia - and pay attention because you're likely to be tested on this at some stage - La Marina, Camp de Mar, Barcares, Morer Vermell, El Mal Pas, Bon Aire, Ca S'Angles, Port d'Alcúdia, Albufera, Son Fe and, of course, Alcúdia. There is also a sort of subordinate and frankly completely unnecessary section to the directory which is for Es Port d'Alcúdia; unnecessary because it's already appeared under Alcúdia.
Then there is, as an alternative source of local place namery, the map book of the "pueblos" of Mallorca. For Alcúdia, this lists Sa Marina, Camp de Mar, Barcares, Morer Vermell, Manresa, Mal Pas, Bonaire, Ca S'Angles, Alcanada, Port d'Alcúdia, Lago Menor, Lago Esperanza, Platja d'Alcúdia and Alcúdia.
I hope you're following all this. What one can establish, on an admittedly smallish survey, is that there are parts of Alcúdia, for which there appears to be some agreement as to some names. Minor differences may occur thanks (or rather not thanks) to the application of Mallorquín - as in Sa as opposed to La Marina. At least to the north of the town, there is a degree of harmony, even if no-one knows where these places start and finish. Camp de Mar, from what I can make out, is the same as Barcares, and why Telefonica ignores Manresa I'm not sure; alternatively, one might ask why it bothers to refer to so many places that occupy the same small acreage of land. Then there are parts that one simply didn't know existed. Go on, how many of you knew of Ca S'Angles and Son Fe? I still don't know where Son Fe is, though I'm guessing it's the road out of Alcúdia going towards the motorway. Ca S'Angles is as you go towards Barcares from the old town. There, you can amaze your friends with your new-found and utterly useless knowledge.
But when we get into what is generically known as Puerto Alcúdia or Port d'Alcúdia, to use the Catalan, the fun really starts. For Telefonica, the whole of the area from the Magic roundabout to the Muro boundary is Albufera. How many of you living in that area know that? Given that Albufera is not even in Alcúdia, this is quite an achievement. To be fair, Albufera used to be. All of what is now The Mile and Magic was once Albufera, but hasn't been for a fair old while now. Not that this stops Telefonica. The alternatives are the names of the lakes or Platja d'Alcúdia (Alcúdia Beach), though one is also likely to encounter Bahía d'Alcúdia (Alcúdia Bay).
Although all the little parts to the north of the old town manage to get named, in the Telefonica classification there is no place for Alcanada; it is Port d'Alcúdia. Alcanada doesn't exist, which may be why some residents there have problems getting broadband.
As with many things here, there is no one defining reference. It's a bit like the law. You just take the bit you fancy and apply that. Someone once asked what the area off Avenida Pedro Mas y Reus was called. He needed to know, so he thought, as he was looking to rent a villa in that area. Rather foolishly, he thought that all websites, maps etc. might conform to a singularity of place names. Not so, of course. As anyone can tell you, Pedro Mas y Reus has many names, some of them even official. The town hall would generally call it Ciudad Blanca, but how many others do? The lack of agreement or knowledge is what gives rise to places and areas adopting unofficial names - like Bellevue or Magic to describe areas. They may be unofficial, but they are more accurate and more relevant. Albufera certainly isn't.
A haven for writers
The Balearic Government has apparently supported a motion which would make the islands a sort of safe haven for writers who are persecuted for what they write in other countries. This is fascinating. Why? Because the Balearics are part of Spain, and Spain is not without a streak of censoriousness. Take the rip out of the King and the Royal Family and you could find yourself up before the local beak. Some of you may remember the case of the cartoon that took the piss out of the King's son and his wife, and resulted in a fine and a right old fuss about whether it was correct to prosecute or to apply a limit to the freedom of the press. I wonder, therefore, if a writer who had offended royalty in another country, would be extended the safety of the haven of the Balearics.
More bargains!!!
Some might maintain that the property market in Mallorca has not really been affected by the slight economic difficulty and that prices have not tumbled. These some are talking bollocks - generally speaking. I know people who, for different reasons, are very keen to shift their properties, be it because they have to (repayment problems) or because they need to return to the UK, or some such equivalent, non-financial reason. I know, therefore, of - for example - a house in Puerto Alcúdia. Very nice. Bungalow-style. Three bedrooms. Was on the market originally for 450,000 euros. How much now? 300 grand. That, I'm telling you, is one hell of a bargain. Anyone who's interested, just email me and I'll put you in touch.
QUIZ
Yesterday's title - Sophie Ellis Bextor (http://www.youtube.com/watch?v=2_Nsi05HkXw). Today - US female R&B-soul singer.
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
As far as Telefonica is concerned, these are the different parts of Alcúdia - and pay attention because you're likely to be tested on this at some stage - La Marina, Camp de Mar, Barcares, Morer Vermell, El Mal Pas, Bon Aire, Ca S'Angles, Port d'Alcúdia, Albufera, Son Fe and, of course, Alcúdia. There is also a sort of subordinate and frankly completely unnecessary section to the directory which is for Es Port d'Alcúdia; unnecessary because it's already appeared under Alcúdia.
Then there is, as an alternative source of local place namery, the map book of the "pueblos" of Mallorca. For Alcúdia, this lists Sa Marina, Camp de Mar, Barcares, Morer Vermell, Manresa, Mal Pas, Bonaire, Ca S'Angles, Alcanada, Port d'Alcúdia, Lago Menor, Lago Esperanza, Platja d'Alcúdia and Alcúdia.
I hope you're following all this. What one can establish, on an admittedly smallish survey, is that there are parts of Alcúdia, for which there appears to be some agreement as to some names. Minor differences may occur thanks (or rather not thanks) to the application of Mallorquín - as in Sa as opposed to La Marina. At least to the north of the town, there is a degree of harmony, even if no-one knows where these places start and finish. Camp de Mar, from what I can make out, is the same as Barcares, and why Telefonica ignores Manresa I'm not sure; alternatively, one might ask why it bothers to refer to so many places that occupy the same small acreage of land. Then there are parts that one simply didn't know existed. Go on, how many of you knew of Ca S'Angles and Son Fe? I still don't know where Son Fe is, though I'm guessing it's the road out of Alcúdia going towards the motorway. Ca S'Angles is as you go towards Barcares from the old town. There, you can amaze your friends with your new-found and utterly useless knowledge.
But when we get into what is generically known as Puerto Alcúdia or Port d'Alcúdia, to use the Catalan, the fun really starts. For Telefonica, the whole of the area from the Magic roundabout to the Muro boundary is Albufera. How many of you living in that area know that? Given that Albufera is not even in Alcúdia, this is quite an achievement. To be fair, Albufera used to be. All of what is now The Mile and Magic was once Albufera, but hasn't been for a fair old while now. Not that this stops Telefonica. The alternatives are the names of the lakes or Platja d'Alcúdia (Alcúdia Beach), though one is also likely to encounter Bahía d'Alcúdia (Alcúdia Bay).
Although all the little parts to the north of the old town manage to get named, in the Telefonica classification there is no place for Alcanada; it is Port d'Alcúdia. Alcanada doesn't exist, which may be why some residents there have problems getting broadband.
As with many things here, there is no one defining reference. It's a bit like the law. You just take the bit you fancy and apply that. Someone once asked what the area off Avenida Pedro Mas y Reus was called. He needed to know, so he thought, as he was looking to rent a villa in that area. Rather foolishly, he thought that all websites, maps etc. might conform to a singularity of place names. Not so, of course. As anyone can tell you, Pedro Mas y Reus has many names, some of them even official. The town hall would generally call it Ciudad Blanca, but how many others do? The lack of agreement or knowledge is what gives rise to places and areas adopting unofficial names - like Bellevue or Magic to describe areas. They may be unofficial, but they are more accurate and more relevant. Albufera certainly isn't.
A haven for writers
The Balearic Government has apparently supported a motion which would make the islands a sort of safe haven for writers who are persecuted for what they write in other countries. This is fascinating. Why? Because the Balearics are part of Spain, and Spain is not without a streak of censoriousness. Take the rip out of the King and the Royal Family and you could find yourself up before the local beak. Some of you may remember the case of the cartoon that took the piss out of the King's son and his wife, and resulted in a fine and a right old fuss about whether it was correct to prosecute or to apply a limit to the freedom of the press. I wonder, therefore, if a writer who had offended royalty in another country, would be extended the safety of the haven of the Balearics.
More bargains!!!
Some might maintain that the property market in Mallorca has not really been affected by the slight economic difficulty and that prices have not tumbled. These some are talking bollocks - generally speaking. I know people who, for different reasons, are very keen to shift their properties, be it because they have to (repayment problems) or because they need to return to the UK, or some such equivalent, non-financial reason. I know, therefore, of - for example - a house in Puerto Alcúdia. Very nice. Bungalow-style. Three bedrooms. Was on the market originally for 450,000 euros. How much now? 300 grand. That, I'm telling you, is one hell of a bargain. Anyone who's interested, just email me and I'll put you in touch.
QUIZ
Yesterday's title - Sophie Ellis Bextor (http://www.youtube.com/watch?v=2_Nsi05HkXw). Today - US female R&B-soul singer.
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
Wednesday, September 03, 2008
Think I'll Buy Me A Football Team
August. High season. A time for work and for jobs. You would think that, but it has not been so. The Balearics have witnessed an increase in unemployment in the hotel sector of 28% during August. It is not the only sector affected.
Twenty-eight per cent. Whatever other statistics may get thrown around about occupancy and spend, this figure is revealing and alarming. There is nothing to take up the slack. The construction industry in the doldrums cannot do it, so where do people turn to? The dole queues are the only answer, and yet many do not qualify for benefit, only for special help. Winter approaches, and the scene is one of unremitting bleakness until the 2009 season. God knows what that will bring. A while back, someone allegedly in the know reckoned that the tourism sector, for which read mainly the hotels, would help to alleviate the employment crisis in construction during the coming winter. It was rubbish then, and it still is.
The only brightness comes in the form of what is anticipated to be a good September. Partly, this may be the consequence of dreadful August weather in the UK and a load of last-minuting. But it will be hotel occupancy on the back of heavy discounts. Cut the prices and there is less money sloshing around for employment. There is some hope for the winter in the form of an initiative between the Tourism Ministry and the European Commission, which will see - supposedly - a hundred thousand tourists coming to the Balearics in the low season from January. Quite what this initiative is I am unclear. Perhaps this was that person in the know had in mind. Whatever it is, I wouldn't hold my breath.
Meantime, in the property sector there has been a fall in house prices in the Balearics of some 7% over the summer. Notwithstanding the difficulties of getting accurate actual house-price values, as I mentioned a few days ago, this decline, while indicative of the general "crisis", is not unwelcome in a market that had overheated through excessively high prices. A question is how much further the price fall will go. A reasonable guess would be that there is still a fair bit more to come. So even with prices in general coming down, now is still not necessarily a good time to be buying, even, that is, if a mortgage could be secured.
AND SO TO FOOTBALL ...
Newcastle United, in the guise of Freddy Shepherd, had a temporary Mallorcan dimension when the club's former chairman was in line to take over Real Mallorca. The club is in the news yet again for different reasons. And what, you may ask, does the Keegan fiasco have to do with Real? In two words - Mike Ashley.
Ashley, on becoming Newcastle's boss, adopted the persona of the fan, going into the stands, wearing the shirt, drinking the beer. He is reviled. Paul Davidson, who is on the point of completing the due-diligence process prior to his acquisition of Real, has said, more or less, that he will be on the terraces and will be a fan.
Ashley is a successful businessman, so is Davidson. The latter has said that he would have nothing to do with the football side of affairs. Ashley has ended up having a great deal to do with the football side of affairs. Businessmen do not invest in anything, let alone football clubs, without exercising control. In Ashley's case, the whole Newcastle experience is turning into a nightmare.
Davidson says that the Mallorca deal will assist in the promotion of the business that has made him wealthy - piping. I don't think I'm alone in wondering quite how. The "Diario" interviewed him the other day and put that very question. It's still not really clear.
I wish Mr Davidson only success, but there is much about the acquisition that raises worries. Professing to be a fan is one thing; being a fan is another. Being a fan is in the blood. Ask a Newcastle supporter. The notion also that somehow Brit expats will suddenly be magicked into being Mallorca supporters and help to fill the ground is spurious. Those expats have their clubs, the ones they watch on Sky or in bars. It's in the blood. And what of the local Real fans? Foreign ownership of a football club in an island where the attitude is every bit as parochial as the Geordie's? Real had a bad first result in La Liga; the club has lost some key players. Last season's seventh may have been the occasional flash in the pan that Real is capable of. I wish Mr Davidson well, but I hope he's observing what's been happening with Mike Ashley.
QUIZ
Yesterday's title - Average White Band (http://www.youtube.com/watch?v=sBWQZ6tvT-E). Today's title - a line from a song from one of the most successful albums of all time.
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
Twenty-eight per cent. Whatever other statistics may get thrown around about occupancy and spend, this figure is revealing and alarming. There is nothing to take up the slack. The construction industry in the doldrums cannot do it, so where do people turn to? The dole queues are the only answer, and yet many do not qualify for benefit, only for special help. Winter approaches, and the scene is one of unremitting bleakness until the 2009 season. God knows what that will bring. A while back, someone allegedly in the know reckoned that the tourism sector, for which read mainly the hotels, would help to alleviate the employment crisis in construction during the coming winter. It was rubbish then, and it still is.
The only brightness comes in the form of what is anticipated to be a good September. Partly, this may be the consequence of dreadful August weather in the UK and a load of last-minuting. But it will be hotel occupancy on the back of heavy discounts. Cut the prices and there is less money sloshing around for employment. There is some hope for the winter in the form of an initiative between the Tourism Ministry and the European Commission, which will see - supposedly - a hundred thousand tourists coming to the Balearics in the low season from January. Quite what this initiative is I am unclear. Perhaps this was that person in the know had in mind. Whatever it is, I wouldn't hold my breath.
Meantime, in the property sector there has been a fall in house prices in the Balearics of some 7% over the summer. Notwithstanding the difficulties of getting accurate actual house-price values, as I mentioned a few days ago, this decline, while indicative of the general "crisis", is not unwelcome in a market that had overheated through excessively high prices. A question is how much further the price fall will go. A reasonable guess would be that there is still a fair bit more to come. So even with prices in general coming down, now is still not necessarily a good time to be buying, even, that is, if a mortgage could be secured.
AND SO TO FOOTBALL ...
Newcastle United, in the guise of Freddy Shepherd, had a temporary Mallorcan dimension when the club's former chairman was in line to take over Real Mallorca. The club is in the news yet again for different reasons. And what, you may ask, does the Keegan fiasco have to do with Real? In two words - Mike Ashley.
Ashley, on becoming Newcastle's boss, adopted the persona of the fan, going into the stands, wearing the shirt, drinking the beer. He is reviled. Paul Davidson, who is on the point of completing the due-diligence process prior to his acquisition of Real, has said, more or less, that he will be on the terraces and will be a fan.
Ashley is a successful businessman, so is Davidson. The latter has said that he would have nothing to do with the football side of affairs. Ashley has ended up having a great deal to do with the football side of affairs. Businessmen do not invest in anything, let alone football clubs, without exercising control. In Ashley's case, the whole Newcastle experience is turning into a nightmare.
Davidson says that the Mallorca deal will assist in the promotion of the business that has made him wealthy - piping. I don't think I'm alone in wondering quite how. The "Diario" interviewed him the other day and put that very question. It's still not really clear.
I wish Mr Davidson only success, but there is much about the acquisition that raises worries. Professing to be a fan is one thing; being a fan is another. Being a fan is in the blood. Ask a Newcastle supporter. The notion also that somehow Brit expats will suddenly be magicked into being Mallorca supporters and help to fill the ground is spurious. Those expats have their clubs, the ones they watch on Sky or in bars. It's in the blood. And what of the local Real fans? Foreign ownership of a football club in an island where the attitude is every bit as parochial as the Geordie's? Real had a bad first result in La Liga; the club has lost some key players. Last season's seventh may have been the occasional flash in the pan that Real is capable of. I wish Mr Davidson well, but I hope he's observing what's been happening with Mike Ashley.
QUIZ
Yesterday's title - Average White Band (http://www.youtube.com/watch?v=sBWQZ6tvT-E). Today's title - a line from a song from one of the most successful albums of all time.
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
Friday, August 29, 2008
House Of Pain
Spanish property developers may have been going belly-up, but obviously it is not only Spanish builders suffering during "the crisis". Remember what I said a while ago about Taylor Woodrow in Puerto Pollensa having failed to yet sell all the apartments at its Pollentia Mar development? Things aren't too great for the company, Taylor Wimpey as it is now. An 85% drop in the profit of its Spanish division.
The property market is in a state of stasis. The Balearics registered the greatest decline in mortgages of all the Spanish regions during June. Even the luxury end, that luxury end which "The Bulletin" would have us believe is some form of über-wedged salvation, is not necessarily enjoying the benefit of those bulging pockets. There is an agency hereabouts that wants, needs, to offload one of its offices; high overhead is a killer even at the luxury end in the current circumstances. The British market, even for those for whom high property prices may not be too challenging, has run aground, courtesy of the poor exchange rate.
There is something of a myth that the British, and other foreigners, were largely to blame (or to praise, depending on your point of view) for rises in property prices. To an extent, this was the case, but it is far from the whole story. There was one major and artificial factor in the historic elevation of property prices, and that was the introduction of the euro. I seem to have mentioned this before, but it bears repetition. It all had to do with pesetas that were never banked and which to have done so in order to obtain euros would have made those pesetas "visible". The way out of this dilemma was to buy property.
The boom in housing did clearly contribute to an overall appreciation in values, though here again one cannot be certain that all was as it seemed. The declared prices of property have increased in a land where traditionally there has been a sizeable chunk of undeclared price. Mathematics, as much as real values, fuelled the property boom. And then there were all the estate agents. That many have been the victim of the property crash may be no bad thing. So many agencies and so much desire to make healthy commissions. One fancies that the agencies were, in part at any rate, a factor in driving up prices. The director of a branch of one agency once told me that he had to curb the "enthusiasm" of his sales team for excessively high prices, but admitted that this was difficult given the equal enthusiasm amongst sellers, especially Mallorcan sellers, to extract as much as possible. The foreign purchaser did indeed contribute to upping property values, but it took and takes four to do the property tango - buyer, seller, agency and bank. Buyers were only too happy to join them on the dance floor, seduced by impressions of good investment opportunities that may not have been as they seemed. And of course the banks were only too happy to go along with it all.
A mark of the present nature of the market is that not only have agencies gone to the wall most have retrenched in terms of marketing spend. Gone, or so it would appear as one doesn't see them around, are most of the property magazines, of which there were four or five prominent ones. In spring last year, one of them approached me with regard to developing more sales in the north. It proved to be a pretty forlorn task, and that was in June of last year when the word already was of "crisis", a word that only really came into everyone's consciousness this year. The internet has become the default medium for promotion, but this is only as good as sites' optimisation can make it.
Yet there persist lunatic prices. Take this example. Friends of mine are renting a house in Puerto Alcúdia. The owner has offered it for sale at 400,000. This offer is a mere 50,000 more than a previous "valuation". How can this possibly be? The Mallorcan propensity to grab for cash is legion (and I have spoken before about the apparent "greed" that is an accusation levelled at Mallorcans), but a 14% increase at a time of extreme difficulty in the market is an obscenity of avarice; it would be even in good times. I know the property. I also know properties close by that are for sale at similar prices. The new price is totally unrealistic by comparison.
HOW MUCH IS THAT DOGGY ON THE PAVEMENT?
And continuing a theme ... It should not be overlooked that much of the canine output to be encountered on the local pavements is there courtesy of dogs without chaperon. There was me thinking that Mallorca's dogs are meant to be on the lead at all times; how stupid to think that a regulation here might be applied assiduously. Down the road lives this dog. It's a very nice dog. Pretty clever, too; either that or it has a key. Two or three times a day it goes for a trot around the neighbourhood, indulges in some prolonged and non-specific barking, finds a convenient spot as its convenience and has a good old dump. Who does let the dogs out? Not only do they have scant regard for lavatorial decorum, man's best friends have little idea when it comes to the highway or pedestrian code either. Main road? That'll do nicely. Side road? Just as good. This morning, I was about to pull away in a street in Can Picafort. Where's that damn dog gone? I saw it coming, and then couldn't see it. Had to get out to make sure I wasn't about to turn it into a dog's dinner for the local ant population.
QUIZ
Yesterday's title - Little Feat (http://www.youtube.com/watch?v=VDZn6TJwwZg). The video is an overlong recent-ish live version, but still captures the essence of what was a great piece of music. Today's title - what's the connection with their big hit and Robin Williams?
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
The property market is in a state of stasis. The Balearics registered the greatest decline in mortgages of all the Spanish regions during June. Even the luxury end, that luxury end which "The Bulletin" would have us believe is some form of über-wedged salvation, is not necessarily enjoying the benefit of those bulging pockets. There is an agency hereabouts that wants, needs, to offload one of its offices; high overhead is a killer even at the luxury end in the current circumstances. The British market, even for those for whom high property prices may not be too challenging, has run aground, courtesy of the poor exchange rate.
There is something of a myth that the British, and other foreigners, were largely to blame (or to praise, depending on your point of view) for rises in property prices. To an extent, this was the case, but it is far from the whole story. There was one major and artificial factor in the historic elevation of property prices, and that was the introduction of the euro. I seem to have mentioned this before, but it bears repetition. It all had to do with pesetas that were never banked and which to have done so in order to obtain euros would have made those pesetas "visible". The way out of this dilemma was to buy property.
The boom in housing did clearly contribute to an overall appreciation in values, though here again one cannot be certain that all was as it seemed. The declared prices of property have increased in a land where traditionally there has been a sizeable chunk of undeclared price. Mathematics, as much as real values, fuelled the property boom. And then there were all the estate agents. That many have been the victim of the property crash may be no bad thing. So many agencies and so much desire to make healthy commissions. One fancies that the agencies were, in part at any rate, a factor in driving up prices. The director of a branch of one agency once told me that he had to curb the "enthusiasm" of his sales team for excessively high prices, but admitted that this was difficult given the equal enthusiasm amongst sellers, especially Mallorcan sellers, to extract as much as possible. The foreign purchaser did indeed contribute to upping property values, but it took and takes four to do the property tango - buyer, seller, agency and bank. Buyers were only too happy to join them on the dance floor, seduced by impressions of good investment opportunities that may not have been as they seemed. And of course the banks were only too happy to go along with it all.
A mark of the present nature of the market is that not only have agencies gone to the wall most have retrenched in terms of marketing spend. Gone, or so it would appear as one doesn't see them around, are most of the property magazines, of which there were four or five prominent ones. In spring last year, one of them approached me with regard to developing more sales in the north. It proved to be a pretty forlorn task, and that was in June of last year when the word already was of "crisis", a word that only really came into everyone's consciousness this year. The internet has become the default medium for promotion, but this is only as good as sites' optimisation can make it.
Yet there persist lunatic prices. Take this example. Friends of mine are renting a house in Puerto Alcúdia. The owner has offered it for sale at 400,000. This offer is a mere 50,000 more than a previous "valuation". How can this possibly be? The Mallorcan propensity to grab for cash is legion (and I have spoken before about the apparent "greed" that is an accusation levelled at Mallorcans), but a 14% increase at a time of extreme difficulty in the market is an obscenity of avarice; it would be even in good times. I know the property. I also know properties close by that are for sale at similar prices. The new price is totally unrealistic by comparison.
HOW MUCH IS THAT DOGGY ON THE PAVEMENT?
And continuing a theme ... It should not be overlooked that much of the canine output to be encountered on the local pavements is there courtesy of dogs without chaperon. There was me thinking that Mallorca's dogs are meant to be on the lead at all times; how stupid to think that a regulation here might be applied assiduously. Down the road lives this dog. It's a very nice dog. Pretty clever, too; either that or it has a key. Two or three times a day it goes for a trot around the neighbourhood, indulges in some prolonged and non-specific barking, finds a convenient spot as its convenience and has a good old dump. Who does let the dogs out? Not only do they have scant regard for lavatorial decorum, man's best friends have little idea when it comes to the highway or pedestrian code either. Main road? That'll do nicely. Side road? Just as good. This morning, I was about to pull away in a street in Can Picafort. Where's that damn dog gone? I saw it coming, and then couldn't see it. Had to get out to make sure I wasn't about to turn it into a dog's dinner for the local ant population.
QUIZ
Yesterday's title - Little Feat (http://www.youtube.com/watch?v=VDZn6TJwwZg). The video is an overlong recent-ish live version, but still captures the essence of what was a great piece of music. Today's title - what's the connection with their big hit and Robin Williams?
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
Saturday, August 16, 2008
Careful What You Wish For
Sardinia may seem an unlikely starting-point for a piece on this blog, but bear with me. The island of Sardinia, which is not named by the way after sardines (they were named after it), lies some 260 or so miles to the east of Mallorca. It is quite a bit bigger than Mallorca, but it has some similarities - a Catalan dialect (and an obscure language of its own); it was once under Aragonese dominance; it witnessed a major battle against the Moorish Turks; it is an autonomous region; and it is also a tourism centre and a place for the rich to flaunt themselves, their money and their properties. Maybe you can start to see where I'm coming from.
Some days ago there was en editorial in "The Bulletin" which spoke about the property market in Mallorca. It enthused that the luxury end of the market is holding strong. And this at a time when the market for the ordinary man and woman is floating adrift. Good for the luxury market. The fact that individuals are willing to part with seven figure sums or more was evidence that the island was in grand shape despite other problems. Loadsamoney, fine investment prospects, blah-blah; it was similar to the notion that Freddy Shepherd's one-time interest in Real Mallorca was in some way indicative of wider British confidence to invest in the island. Pass me those straws and let me clutch them; but not for long, they're going in the bin with the rest of the rubbish.
Be careful what you wish for. That wealthy people may wish to line the pockets of estate agents, existing landowners and some professionals is evidence of no more than a desire to purchase a luxury pile. It is not, by some vague implication, the creation of some form of Thatcherite distribution of wealth through entrepreneurialism for the good of all. Some builders, some gardeners, some pool-maintenance firms and a scattering of menials may also benefit but that's it. If I can come back to yesterday's piece, are the wealthy purchasers like to be integrating with Mallorcan society? They take but what do they give back? Are they going to establish high-tech new businesses with high employment opportunities? No they are not. At least Paul Davidson, the likely new owner of Real Mallorca, seems to have the right attitudes. And let us certainly not decry the benevolence and humility of some of the wealthy. I once bumped into the German rock star Peter Maffay as he was getting off his push bike to unlock the gates to the Trencadora in Pollensa; his foundation is lauded for its good works and one only hears good things of the man.
Be careful what you wish for. And who are these wealthy people? Perhaps some warning bells should have been ringing when Matthias Kühn of Kühn & Partner, purveyors of property to the filthy rich, spoke about the opportunities afforded by the new wave of the industrial-scale-minted foreign buyer. Russians, in a word. And Heaven forbid that there is some high-rent, high-security gated villa on the go or perhaps Mark Thatcher will pitch up, giving the luckies the possibility of diversifying into a bit of bounty-hunting in the form of kidnapping on behalf of some God-forsaken African basket case of a nation. Mallorca has a long reputation as a millionaire's playground. There are plenty of wealthy Mallorcans. And now there's this new wave.
Be careful what you wish for. A while back a local politician expressed a concern that the current economic difficulties could lead to increased crime. It was over-blown scare-mongering perhaps, but civil disobedience ...? Which brings me back to Sardinia. What's happening there? "Arrogant ostentation of the super-rich." "These people think they rule the world." Hugely expensive properties, Russian oligarchs and celebrity Italians such as Flavio Briatore who recently was greeted as his motorised dinghies were making shore with cries of "louts, go home" and a barrage of wet sand.
Economic difficulties can create strong reactions. The mega rich are not necessarily the solution to these difficulties; in fact far from it. The Sardinians have had enough of those who show off their wealth. Be careful what you wish for Mallorca.
* The quotes and some Sardinian references are from an article by Alexander Chancellor in "The Guardian" - http://www.guardian.co.uk/commentisfree/2008/aug/15/italy.globaleconomy.
QUIZ
Yesterday's title - Paul McCartney and Stevie Wonder (http://www.youtube.com/watch?v=sssqBjaTzOU). Today's title - album by a Scottish band.
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
Some days ago there was en editorial in "The Bulletin" which spoke about the property market in Mallorca. It enthused that the luxury end of the market is holding strong. And this at a time when the market for the ordinary man and woman is floating adrift. Good for the luxury market. The fact that individuals are willing to part with seven figure sums or more was evidence that the island was in grand shape despite other problems. Loadsamoney, fine investment prospects, blah-blah; it was similar to the notion that Freddy Shepherd's one-time interest in Real Mallorca was in some way indicative of wider British confidence to invest in the island. Pass me those straws and let me clutch them; but not for long, they're going in the bin with the rest of the rubbish.
Be careful what you wish for. That wealthy people may wish to line the pockets of estate agents, existing landowners and some professionals is evidence of no more than a desire to purchase a luxury pile. It is not, by some vague implication, the creation of some form of Thatcherite distribution of wealth through entrepreneurialism for the good of all. Some builders, some gardeners, some pool-maintenance firms and a scattering of menials may also benefit but that's it. If I can come back to yesterday's piece, are the wealthy purchasers like to be integrating with Mallorcan society? They take but what do they give back? Are they going to establish high-tech new businesses with high employment opportunities? No they are not. At least Paul Davidson, the likely new owner of Real Mallorca, seems to have the right attitudes. And let us certainly not decry the benevolence and humility of some of the wealthy. I once bumped into the German rock star Peter Maffay as he was getting off his push bike to unlock the gates to the Trencadora in Pollensa; his foundation is lauded for its good works and one only hears good things of the man.
Be careful what you wish for. And who are these wealthy people? Perhaps some warning bells should have been ringing when Matthias Kühn of Kühn & Partner, purveyors of property to the filthy rich, spoke about the opportunities afforded by the new wave of the industrial-scale-minted foreign buyer. Russians, in a word. And Heaven forbid that there is some high-rent, high-security gated villa on the go or perhaps Mark Thatcher will pitch up, giving the luckies the possibility of diversifying into a bit of bounty-hunting in the form of kidnapping on behalf of some God-forsaken African basket case of a nation. Mallorca has a long reputation as a millionaire's playground. There are plenty of wealthy Mallorcans. And now there's this new wave.
Be careful what you wish for. A while back a local politician expressed a concern that the current economic difficulties could lead to increased crime. It was over-blown scare-mongering perhaps, but civil disobedience ...? Which brings me back to Sardinia. What's happening there? "Arrogant ostentation of the super-rich." "These people think they rule the world." Hugely expensive properties, Russian oligarchs and celebrity Italians such as Flavio Briatore who recently was greeted as his motorised dinghies were making shore with cries of "louts, go home" and a barrage of wet sand.
Economic difficulties can create strong reactions. The mega rich are not necessarily the solution to these difficulties; in fact far from it. The Sardinians have had enough of those who show off their wealth. Be careful what you wish for Mallorca.
* The quotes and some Sardinian references are from an article by Alexander Chancellor in "The Guardian" - http://www.guardian.co.uk/commentisfree/2008/aug/15/italy.globaleconomy.
QUIZ
Yesterday's title - Paul McCartney and Stevie Wonder (http://www.youtube.com/watch?v=sssqBjaTzOU). Today's title - album by a Scottish band.
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
Wednesday, July 23, 2008
Let's Make Lots Of Money
On the back of what I was saying about the lamentable state of the property market (21 July) comes further confirmation of the difficulties in this sector. In the "Diario", a spokesperson for the Balearic college of estate agents reckons that the "crisis" will last two more years and observes that sales of older dwellings (as opposed to new builds) have slumped 60% and that there are 5,000 new properties unsold. He also makes the point that, unlike in the rest of Spain, there is a resistance among owners to drop their prices, something that is preventing any form of kick-start to the local market.
Well this latter point comes as very little surprise. Indeed had he said that the prices of unsold properties had actually gone up that would also not have come as a surprise. It is far from uncommon for a property that has been on the market for some time without a buyer to have its price increased. It may not seem to make much sense, but for the Mallorcan it appears to (though one cannot rule out the fact that other nationalities are also holding firm on their prices). Having spoken to many an estate agent over the months and years, one is struck by the degree to which some agents classify the Mallorcan owner as greedy. I'll cite an example - a Mallorcan gentleman touted his property around three different agents, opting in the end for a Mallorcan company; one of the three, British-run, had given a price a half of that which he obtained from the "winning" agency. Perhaps neither valuation was realistic, but when you're talking about the difference of some two and a half million I suppose you might be inclined to go for the higher figure even if it is a nonsense.
This greed thing is something one hears a lot. Anecdotally one learns of it in respect of various dealings, be they rents on bars or the sale of a house. But perhaps there is a whole cultural element that one fails to appreciate. I have looked for clues in "Beloved Majorcans" as to an explanation of the conundrum as to high prices being maintained even during economically hard times. There is nothing specific, but the indifference to time pressures may indicate a willingness to wait, while there is some suggestion that a Mallorcan would rather not sell to someone who seems overly keen. Whatever the truth or the possible cultural dimension, perhaps it just all comes down to wanting to secure as much as possible - and that's no different anywhere.
One Mallorcan who seems to have extracted as much as possible is the owner of Real Mallorca, Vicente Grande. Apparently he's set to get 50 million quid for a 96% stake in the club, a fair bit more than Freddy Shepherd had tabled. The buyer is also British, namely Paul Davidson, known as "The Plumber" because of his pipe-fitting business. According to the BBC's site, Mr Davidson sees this as a chance to promote his business interests in Spain. Maybe it is, but it seems an awful lot and rather tangential to pipes. But who knows. I was going to run this item yesterday as a link with the Patrona piece - leaks and pipes and plumbing and what have you - but it sits just as well with the property angle.
As a corollary to this ... In an interview with the "Diario" Mr. Davidson says that he prefers not to divulge the amount he has offered for the club, except that it is much more than the Shepherd offer. He has ambition for the club - champions and all that - which for a team with a generally unremarkable recent history is probably pushing it. The interview concludes by observing that he talks of the intention to buy (it also refers to the process of due diligence that may take some time), and so asks if he really is the new owner. Unequivocally yes is the answer. The question that was not put is whether this new owner has the financial clout to elevate Real to the level of his stated ambition. Grabbing a club that finished seventh in La Liga for an amount far less than for a similar club in the Premier League is one thing, but the price of success in football is high, be it in Spain or England.
QUIZ
Yesterday's title - Martha Reeves and the Vandellas (http://www.youtube.com/watch?v=7-EKd2n0urs). Today's title - who?
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
Well this latter point comes as very little surprise. Indeed had he said that the prices of unsold properties had actually gone up that would also not have come as a surprise. It is far from uncommon for a property that has been on the market for some time without a buyer to have its price increased. It may not seem to make much sense, but for the Mallorcan it appears to (though one cannot rule out the fact that other nationalities are also holding firm on their prices). Having spoken to many an estate agent over the months and years, one is struck by the degree to which some agents classify the Mallorcan owner as greedy. I'll cite an example - a Mallorcan gentleman touted his property around three different agents, opting in the end for a Mallorcan company; one of the three, British-run, had given a price a half of that which he obtained from the "winning" agency. Perhaps neither valuation was realistic, but when you're talking about the difference of some two and a half million I suppose you might be inclined to go for the higher figure even if it is a nonsense.
This greed thing is something one hears a lot. Anecdotally one learns of it in respect of various dealings, be they rents on bars or the sale of a house. But perhaps there is a whole cultural element that one fails to appreciate. I have looked for clues in "Beloved Majorcans" as to an explanation of the conundrum as to high prices being maintained even during economically hard times. There is nothing specific, but the indifference to time pressures may indicate a willingness to wait, while there is some suggestion that a Mallorcan would rather not sell to someone who seems overly keen. Whatever the truth or the possible cultural dimension, perhaps it just all comes down to wanting to secure as much as possible - and that's no different anywhere.
One Mallorcan who seems to have extracted as much as possible is the owner of Real Mallorca, Vicente Grande. Apparently he's set to get 50 million quid for a 96% stake in the club, a fair bit more than Freddy Shepherd had tabled. The buyer is also British, namely Paul Davidson, known as "The Plumber" because of his pipe-fitting business. According to the BBC's site, Mr Davidson sees this as a chance to promote his business interests in Spain. Maybe it is, but it seems an awful lot and rather tangential to pipes. But who knows. I was going to run this item yesterday as a link with the Patrona piece - leaks and pipes and plumbing and what have you - but it sits just as well with the property angle.
As a corollary to this ... In an interview with the "Diario" Mr. Davidson says that he prefers not to divulge the amount he has offered for the club, except that it is much more than the Shepherd offer. He has ambition for the club - champions and all that - which for a team with a generally unremarkable recent history is probably pushing it. The interview concludes by observing that he talks of the intention to buy (it also refers to the process of due diligence that may take some time), and so asks if he really is the new owner. Unequivocally yes is the answer. The question that was not put is whether this new owner has the financial clout to elevate Real to the level of his stated ambition. Grabbing a club that finished seventh in La Liga for an amount far less than for a similar club in the Premier League is one thing, but the price of success in football is high, be it in Spain or England.
QUIZ
Yesterday's title - Martha Reeves and the Vandellas (http://www.youtube.com/watch?v=7-EKd2n0urs). Today's title - who?
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
Monday, July 21, 2008
Summertime Blues
First viewing in weeks. An estate agent admitted to me the other day that this was the case. Want to know in how much of a trough the local property market is? Go ask a few estate agents. Don't ask those who deal at the luxury end (even if some of these are feeling the pinch when it comes to British purchasers faced with a poor exchange rate). Talk to those at the middle and low end. All those estate agencies that have closed, and nothing by way of an improvement in the market; it just gets worse it seems. Another agent told me of an apartment for sale in Puerto Alcúdia. Pretty good place, but a seriously overstretched owner who had hoped the summer rentals would suffice in order to pay the hefty mortgage, the sort of mortgage it would be hard to conjure up just at present. You can't even rely on the holiday let to bail you out. The Taylor Woodrow development in Puerto Pollensa, the one from the company with the "We Build in Spain since 1958" line; these apartments would once have all been snapped up off-plan. They haven't been. In Playa de Muro there is a development of detached houses - "in an extraordinary setting, clean beach and natural surroundings make this a veritable 7km paradise within your reach". This comes from the catalogue thing that was shoved under windscreen wipers at the weekend. It follows the appearance of several street posters pointing the potential customer in the direction. It's a building site. They want, sorry need, off-plan sales. The spate of publicity suggests a worry, perhaps more. Sell off-plan and the deposit and the virtual guarantee of a sale will help to secure further lines of credit from the bank. That would be the hope. There is another aspect to the property development uncertainty. It is the inordinately long time that it can take to actually finish the building. Given restrictions on construction work in tourist areas during the season, the time-scale between starting, beginning to sell off-plan, receiving deposits to final completion can be extremely lengthy. It only takes an economic crisis to invade that time-scale for the walls to come tumbling down. And this is what has been happening.
Martinsa-Fadesa, one of Spain's largest property developers, has collapsed. "The Sunday Times" carried this story yesterday, angling it from the point of view of the Brit purchaser who stands to lose a shedload. The paper mentions also an unfinished development on the Costa Blanca. There are probably many more. The problem now is that if a deposit is put down, it may never be recouped and the property may never be built. Martinsa-Fadesa has been hit by the double whammy of too much borrowing and therefore too much debt and a fall of up to 60% in Spanish developer sales.
Picking up on the reference to Spanair on 19 July (the airline is planning the axeing of a third of jobs), there is now also the news - carried by "The Bulletin" over a couple of days - that Ryanair is pulling its Palma service for a period this winter (from 4 November till 19 December). The company cites the cost of fuel and the costs of operating at Palma, this latter point being challenged by AENA, which runs Palma airport. Whatever the situation, Ryanair's decision hardly warms the already chilly winter scene. Winter flights they may be, but at present there ain't no cure for the summertime blues, though at the end of the month Balearics leader Francesc Antich is due to unveil a package of measures to assist the freezing local economy. I'm not sure we should be holding our breath.
Sorry, it's not great news today. I'll try and be more cheery tomorrow.
QUIZ
Yesterday's title - The Beatles, "A Day In The Life" (http://www.youtube.com/watch?v=gZez_k4vAzU). Today's title - who? Died at 21.
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
Martinsa-Fadesa, one of Spain's largest property developers, has collapsed. "The Sunday Times" carried this story yesterday, angling it from the point of view of the Brit purchaser who stands to lose a shedload. The paper mentions also an unfinished development on the Costa Blanca. There are probably many more. The problem now is that if a deposit is put down, it may never be recouped and the property may never be built. Martinsa-Fadesa has been hit by the double whammy of too much borrowing and therefore too much debt and a fall of up to 60% in Spanish developer sales.
Picking up on the reference to Spanair on 19 July (the airline is planning the axeing of a third of jobs), there is now also the news - carried by "The Bulletin" over a couple of days - that Ryanair is pulling its Palma service for a period this winter (from 4 November till 19 December). The company cites the cost of fuel and the costs of operating at Palma, this latter point being challenged by AENA, which runs Palma airport. Whatever the situation, Ryanair's decision hardly warms the already chilly winter scene. Winter flights they may be, but at present there ain't no cure for the summertime blues, though at the end of the month Balearics leader Francesc Antich is due to unveil a package of measures to assist the freezing local economy. I'm not sure we should be holding our breath.
Sorry, it's not great news today. I'll try and be more cheery tomorrow.
QUIZ
Yesterday's title - The Beatles, "A Day In The Life" (http://www.youtube.com/watch?v=gZez_k4vAzU). Today's title - who? Died at 21.
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
Friday, January 18, 2008
A Taste Of Honey
A thousand offices closed.
The property market in the Balearics may be holding its own in terms of property values (though even these are under pressure), but the fall in activity has taken its toll on the property retail chain. The number of estate agent offices that have closed since last summer stands at around 1,000. That’s an awful lot of offices. But it will come as little surprise. The proliferation of estate agencies was unsustainable. Indeed it is questionable whether, even in better times, that proliferation was supportable.
So many businesses wanted a bit of the Mallorcan property honeypot. They saw high (often overpriced) property values, low interest rates, strong demand locally and from abroad. They all wanted to buzz around the pot and have a good lick. It would be wrong to portray most estate agents here as anything other than professional, but it would be equally correct to portray some as chancers, wide boys and johnnys-come-lately. There are people knocking around here who are not estate agents, who have no qualifications and yet who “do some property business”. Everyone wants his or her finger in that pot. But now the honey doesn’t taste so sweet.
That there was over-supply in the number of estate agencies is undeniable. The island is dogged by market inefficiencies in terms of supply. The same problem exists within the restaurant business. The shakeout in the property retail chain was inevitable.
At the high end of the market, certain agencies are likely to survive the current slowdown as these agencies tend to have the big-ticket properties that are immune to a property bear market as potential purchasers are themselves largely immune to the economic circumstances that cause it. The problem exists more at the middle and low ends of the market, over which the majority of the agencies grapple.
There is a further problem, one caused by such high supply of agencies. Their differentiation, their own selling points. That the same property can be marketed by several agencies only serves to reduce even more any differentiation. All the same sort of agency, all selling the same properties. To stand out in such a competitive and homogeneous market is a huge challenge. The marketing of the agency itself is every bit as important as the marketing of the individual property. One agency chain I know (Menorcan) gained pre-eminence in the market more or less on the back of its advertising and marketing alone. But with a slow market, such marketing investment becomes difficult. One fancies there will yet be more closures, even if there is some prediction that the market will pick up later this year. I wouldn’t be so sure.
FOOTBALL
A bit of football stuff. Real Mallorca knocked Real Madrid out of the Spanish equivalent of the FA Cup on Wednesday evening, winning away at the Bernabéu Stadium. The local papers are of course full of it. Four pages in today’s “Ultima Hora” are devoted to Mallorca’s goalkeeper Miquel Moya, the hero of the evening, who hails from Binissalem and is now dubbed “Sant Moya”. But the best of all this is reserved for the reaction of Madrid’s coach, the German Bernd Schuster, who, in an exchange at the final whistle, said to Mallorca’s coach Gregorio Manzano “ya has conseguido lo que querías, paleto provinciano”, which is best translated as “you’ve now got what you wanted, country bumpkin*”. Nothing like a bit of graciousness in defeat.
(* I wrote this and thus did the translation in the morning. Later I read some of Ian McEwan’s “On Chesil Beach”. I read the part in which Florence calls Edward a “country bumpkin”. How many years is it since I last encountered this expression? And then twice on the same day. Moreover, having decided on today’s title, what film did Florence and Edward attend in the part I then read? Yes, “A Taste Of Honey”. Very strange.)
QUIZ
Yesterday – “The Sound Of Music”. Today’s title – a few to choose from. The trumpeting and the Scouser versions are probably the best known.
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
The property market in the Balearics may be holding its own in terms of property values (though even these are under pressure), but the fall in activity has taken its toll on the property retail chain. The number of estate agent offices that have closed since last summer stands at around 1,000. That’s an awful lot of offices. But it will come as little surprise. The proliferation of estate agencies was unsustainable. Indeed it is questionable whether, even in better times, that proliferation was supportable.
So many businesses wanted a bit of the Mallorcan property honeypot. They saw high (often overpriced) property values, low interest rates, strong demand locally and from abroad. They all wanted to buzz around the pot and have a good lick. It would be wrong to portray most estate agents here as anything other than professional, but it would be equally correct to portray some as chancers, wide boys and johnnys-come-lately. There are people knocking around here who are not estate agents, who have no qualifications and yet who “do some property business”. Everyone wants his or her finger in that pot. But now the honey doesn’t taste so sweet.
That there was over-supply in the number of estate agencies is undeniable. The island is dogged by market inefficiencies in terms of supply. The same problem exists within the restaurant business. The shakeout in the property retail chain was inevitable.
At the high end of the market, certain agencies are likely to survive the current slowdown as these agencies tend to have the big-ticket properties that are immune to a property bear market as potential purchasers are themselves largely immune to the economic circumstances that cause it. The problem exists more at the middle and low ends of the market, over which the majority of the agencies grapple.
There is a further problem, one caused by such high supply of agencies. Their differentiation, their own selling points. That the same property can be marketed by several agencies only serves to reduce even more any differentiation. All the same sort of agency, all selling the same properties. To stand out in such a competitive and homogeneous market is a huge challenge. The marketing of the agency itself is every bit as important as the marketing of the individual property. One agency chain I know (Menorcan) gained pre-eminence in the market more or less on the back of its advertising and marketing alone. But with a slow market, such marketing investment becomes difficult. One fancies there will yet be more closures, even if there is some prediction that the market will pick up later this year. I wouldn’t be so sure.
FOOTBALL
A bit of football stuff. Real Mallorca knocked Real Madrid out of the Spanish equivalent of the FA Cup on Wednesday evening, winning away at the Bernabéu Stadium. The local papers are of course full of it. Four pages in today’s “Ultima Hora” are devoted to Mallorca’s goalkeeper Miquel Moya, the hero of the evening, who hails from Binissalem and is now dubbed “Sant Moya”. But the best of all this is reserved for the reaction of Madrid’s coach, the German Bernd Schuster, who, in an exchange at the final whistle, said to Mallorca’s coach Gregorio Manzano “ya has conseguido lo que querías, paleto provinciano”, which is best translated as “you’ve now got what you wanted, country bumpkin*”. Nothing like a bit of graciousness in defeat.
(* I wrote this and thus did the translation in the morning. Later I read some of Ian McEwan’s “On Chesil Beach”. I read the part in which Florence calls Edward a “country bumpkin”. How many years is it since I last encountered this expression? And then twice on the same day. Moreover, having decided on today’s title, what film did Florence and Edward attend in the part I then read? Yes, “A Taste Of Honey”. Very strange.)
QUIZ
Yesterday – “The Sound Of Music”. Today’s title – a few to choose from. The trumpeting and the Scouser versions are probably the best known.
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
Wednesday, December 19, 2007
Everyday People
The population of the Balearics rose by some three per cent last year. In total, the population stood – as of 1 January this year – at 1,030,650, much of the increase being down to immigration, with the Germans and the British leading the way in terms of the numbers of foreigners resident on the islands. The increase translates as a net gain of some 80 people per day.
How sustainable would such an annual increase be? It is a matter that taxes the politicians, not least the Unió Mallorquina (the Mallorcan national party) which believes that there is only so much of Mallorca to go round, even if this perfectly legitimate stance may be influenced by a touch of xenophobia (though they would doubtless deny that).
A report earlier this year suggested a drop in the level of foreign property purchasing. Though this perhaps conflicts with the actual population growth, Mallorca remains an attractive target, and new markets keep emerging, as with the Russians. It is the overseas purchaser who, in part, helps to keep property prices high, and it is the overseas purchaser who is important at a time when the credit squeeze has hit in Spain.
Yet there is a point at which even Mallorca’s improved infrastructure will begin to creak. I mentioned a while ago that Mallorca is roughly equivalent in size to Essex, but its population is less than two-thirds of the county, nearly a half of it in Palma. Plenty of space you might think, except Mallorca has mountains that do not readily lend themselves to vast urbanisations. Over 40% of Spain’s whole population lives by the coast; in Mallorca it is more like 70%, probably higher. Despite the environmental worry (and the threat to coastal areas is a similar issue in Essex, perhaps more so because of the Thames flood plain), there is no sign of a reverse in residential-construction policy that would inhabit the interior to a far greater extent. Indeed, one of the current political footballs is the extent to which rural areas might be built on or not (to which I have referred before).
Much as I might find displeasure in the new architecture of a small urban area such as Puerto Pollensa (or at least the context of that architecture), there is of course sense in exploiting this area rather than the “green belt”. But there again, a town like Puerto Pollensa can only itself take so much. Yet, like the UK and therefore no doubt Essex, there is a not insignificant amount of housing stock that is under-utilised. How many of those new apartments in the “Pollentia” development, I wonder, will be lived in all year? Take a walk around my area in Playa de Muro, and perhaps as much as a third of the dwellings are unoccupied at this time of the year.
The population growth is a sign of the attractiveness of Mallorca (and the Balearics) as a place of residence; the growth is thus a potential negative of the island’s success. Housing is by no means the only issue related to population growth, but if it really is such an issue (and there must be still some doubt as to that), then all new house or apartment purchases should be unequivocally – and legally – either first homes or residential lets: no second, third or however many homes, and no holiday lets. Fine in theory. Wouldn’t work in practice.
QUIZ
Yesterday – Donovan. Today’s title – which American outfit?
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
How sustainable would such an annual increase be? It is a matter that taxes the politicians, not least the Unió Mallorquina (the Mallorcan national party) which believes that there is only so much of Mallorca to go round, even if this perfectly legitimate stance may be influenced by a touch of xenophobia (though they would doubtless deny that).
A report earlier this year suggested a drop in the level of foreign property purchasing. Though this perhaps conflicts with the actual population growth, Mallorca remains an attractive target, and new markets keep emerging, as with the Russians. It is the overseas purchaser who, in part, helps to keep property prices high, and it is the overseas purchaser who is important at a time when the credit squeeze has hit in Spain.
Yet there is a point at which even Mallorca’s improved infrastructure will begin to creak. I mentioned a while ago that Mallorca is roughly equivalent in size to Essex, but its population is less than two-thirds of the county, nearly a half of it in Palma. Plenty of space you might think, except Mallorca has mountains that do not readily lend themselves to vast urbanisations. Over 40% of Spain’s whole population lives by the coast; in Mallorca it is more like 70%, probably higher. Despite the environmental worry (and the threat to coastal areas is a similar issue in Essex, perhaps more so because of the Thames flood plain), there is no sign of a reverse in residential-construction policy that would inhabit the interior to a far greater extent. Indeed, one of the current political footballs is the extent to which rural areas might be built on or not (to which I have referred before).
Much as I might find displeasure in the new architecture of a small urban area such as Puerto Pollensa (or at least the context of that architecture), there is of course sense in exploiting this area rather than the “green belt”. But there again, a town like Puerto Pollensa can only itself take so much. Yet, like the UK and therefore no doubt Essex, there is a not insignificant amount of housing stock that is under-utilised. How many of those new apartments in the “Pollentia” development, I wonder, will be lived in all year? Take a walk around my area in Playa de Muro, and perhaps as much as a third of the dwellings are unoccupied at this time of the year.
The population growth is a sign of the attractiveness of Mallorca (and the Balearics) as a place of residence; the growth is thus a potential negative of the island’s success. Housing is by no means the only issue related to population growth, but if it really is such an issue (and there must be still some doubt as to that), then all new house or apartment purchases should be unequivocally – and legally – either first homes or residential lets: no second, third or however many homes, and no holiday lets. Fine in theory. Wouldn’t work in practice.
QUIZ
Yesterday – Donovan. Today’s title – which American outfit?
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
Wednesday, December 12, 2007
Dallied And Dillied
You wonder what all the fuss was about. I still hold with the accusation that the Juaneda group could have handled the closure of the Hospital d’Alcúdia better, but the fact that it plans to open a new facility in Alcúdia softens the blow. This new centre will be located in two buildings on the Camí del Mal Pas (this is the road leaving Alcúdia in the direction of Bonaire, La Victoria and also of course Mal Pas). As such, it won’t be that far from the closed-down hospital and will offer pretty much all that was available at the hospital save for in-patients and presumably also intensive care (which ceased at the hospital some months ago).
But why did Juaneda not just say what they had planned rather than letting the rumours drag on? Had they envisaged, all along, a new facility and shifting actual hospitalisation to Muro, and had said so, they could have saved a lot of headache, confusion and ill will. That patients will be assigned a bed down the road in Playa de Muro is hardly an inconvenience, and it was never going to be an inconvenience: Juaneda’s obfuscation allowed it to be presented as such.
The front page of the current “Mallorca Zeitung”, the German weekly, flags up the promise of riches for estate agents in the form of Russian buyers. I knew there was a reason why Anna Kournikova was a “face” of Mallorca. What better for some oligarch, pockets bulging with roubles and various other denominations, than to offshore the wonga into a Mallorcan dacha with its own helipad, beetroot plantation, vodka distillery, and lodgings for the bodyguards? Should be fun for someone trying to sort out that money trail. Should be fun for some of the estate agents with their translations as well. Russian? There are those that struggle with English, some of them run by the English. Comprises of, anyone?
QUIZ
Yesterday – “Fire”, The Crazy World Of Arthur Brown. Today’s title – in honour of Juaneda, where does this line come from?
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
But why did Juaneda not just say what they had planned rather than letting the rumours drag on? Had they envisaged, all along, a new facility and shifting actual hospitalisation to Muro, and had said so, they could have saved a lot of headache, confusion and ill will. That patients will be assigned a bed down the road in Playa de Muro is hardly an inconvenience, and it was never going to be an inconvenience: Juaneda’s obfuscation allowed it to be presented as such.
The front page of the current “Mallorca Zeitung”, the German weekly, flags up the promise of riches for estate agents in the form of Russian buyers. I knew there was a reason why Anna Kournikova was a “face” of Mallorca. What better for some oligarch, pockets bulging with roubles and various other denominations, than to offshore the wonga into a Mallorcan dacha with its own helipad, beetroot plantation, vodka distillery, and lodgings for the bodyguards? Should be fun for someone trying to sort out that money trail. Should be fun for some of the estate agents with their translations as well. Russian? There are those that struggle with English, some of them run by the English. Comprises of, anyone?
QUIZ
Yesterday – “Fire”, The Crazy World Of Arthur Brown. Today’s title – in honour of Juaneda, where does this line come from?
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
Tuesday, September 11, 2007
Smells Like Mean Spirit
Smells.
There are all manner of smells here. Here is odour, fragrance, olfactory assault. A vanilla or perhaps strawberry of non-specific origin is the sweetest. The darker, the more evil smells are manufactured from gases. The raw sewage is sometimes to be smelt, but mercifully rarely, but from the sewers comes gas and from the wetlands a form of marsh gas. There is often a burnt smell, but not of something actually burned. These smells offer a curious reassurance, some are not unpleasant once the sense is accustomed to them; they are nasal entertainment, a nocuous nosegay, a sensory comfort.
This morning there was an evocative smell. It was not the normal burnt smell. It had sugar. It was intoxication. It was the smell of brewery, though there is no brewery. There was light mist and a stillness. It was the smell of early-morning light mist and stillness of years ago. It was the smell of Guinness at Park Royal that used to hang over west London. Where it came from, I do not know.
PROPERTY MARKET
A factor in keeping the currently uncertain property market buoyant, according to the Bank of Spain a while back, is demand from overseas. Well, this may not be as positive as they think. According to Ultima Hora, the level of foreign investment in Balearic real estate has taken a heck of a tumble - by some 34%. This is attributable, in part, to the lack of new dwellings (really!?) and to developments elsewhere in Spain where whole colonies are built next to golf courses. Now personally I wouldn’t want to live next to a golf course, but there again I don’t play golf. But for all this, there is a new development - next to the Pollensa Golf Course.
And mention of Pollensa. A most curious thing. There was a gathering outside the town hall, local folk complaining about alleged aggression and attacks on locals by two specific members of the local police, themselves not local. NOT LOCAL! (Sorry, I can’t help this League of Gentlemen thing that crops up now and then.)
QUIZ
Last time - Peter Frampton. Yea, I know, a bit obscure, but I don’t just throw this stuff together, you know. The hours that I put in. Some ingrate says, I don’t know what that title is...
Where was I? Ah yes, today’s title is adapted from something very easy.
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
There are all manner of smells here. Here is odour, fragrance, olfactory assault. A vanilla or perhaps strawberry of non-specific origin is the sweetest. The darker, the more evil smells are manufactured from gases. The raw sewage is sometimes to be smelt, but mercifully rarely, but from the sewers comes gas and from the wetlands a form of marsh gas. There is often a burnt smell, but not of something actually burned. These smells offer a curious reassurance, some are not unpleasant once the sense is accustomed to them; they are nasal entertainment, a nocuous nosegay, a sensory comfort.
This morning there was an evocative smell. It was not the normal burnt smell. It had sugar. It was intoxication. It was the smell of brewery, though there is no brewery. There was light mist and a stillness. It was the smell of early-morning light mist and stillness of years ago. It was the smell of Guinness at Park Royal that used to hang over west London. Where it came from, I do not know.
PROPERTY MARKET
A factor in keeping the currently uncertain property market buoyant, according to the Bank of Spain a while back, is demand from overseas. Well, this may not be as positive as they think. According to Ultima Hora, the level of foreign investment in Balearic real estate has taken a heck of a tumble - by some 34%. This is attributable, in part, to the lack of new dwellings (really!?) and to developments elsewhere in Spain where whole colonies are built next to golf courses. Now personally I wouldn’t want to live next to a golf course, but there again I don’t play golf. But for all this, there is a new development - next to the Pollensa Golf Course.
And mention of Pollensa. A most curious thing. There was a gathering outside the town hall, local folk complaining about alleged aggression and attacks on locals by two specific members of the local police, themselves not local. NOT LOCAL! (Sorry, I can’t help this League of Gentlemen thing that crops up now and then.)
QUIZ
Last time - Peter Frampton. Yea, I know, a bit obscure, but I don’t just throw this stuff together, you know. The hours that I put in. Some ingrate says, I don’t know what that title is...
Where was I? Ah yes, today’s title is adapted from something very easy.
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
Monday, August 27, 2007
It’s Build A House Where We Can Stay
There’s a new museum on the way. The Alcúdia town hall has agreed that the central Culture Ministry (in a consortium with the town hall, the Balearic Government and the Mallorca Council) will take responsibility for the construction of a new Pollentia Museum (Pollentia being the Roman town). This will be sited opposite the school (close to Mercadona and next to Sa Romana restaurant) on the Calle Pollentia. The hope is that this will offer something more dynamic than the current small museum next to the Sant Jaume church. Well, we’ll see. To be brutally frank, the current museum is a tad unimpressive, so anything would be an improvement. With the mooted arts and sciences museum on the site of the old power station by the commercial port (23 May: Red Rain), the new building will give - in the words of Ultima Hora - “a great impulse to cultural tourism in the north of Mallorca”. Maybe. I’m yet to be convinced, though if the power station site really does have something exciting, that impulse could yet be realised.
PROPERTY MARKET
The hike in interest rates coming from the European Central Bank is having a negative effect in the sense that - obviously - mortgage repayments have risen substantially. Moreover, according to the head of the association of Balearic estate agents, the interest rises have caused a fall in demand by as much as 20%. While defaults are not necessarily going to happen, the Spanish central bank has nevertheless called on banks to try and prevent defaulting (which has, presumably, to mean a limit on credit). Putting this in context, there has been an annual 7% increase in the granting of loans/mortgages over the past three years. So, while the property market has been buoyant, the worry is that it has been predicated - as in other countries - on too-easy credit. Talking to local estate agents, it is clear that the market has, certainly at the lower and middle ends, all but ground to a halt.
QUIZ
Yesterday - Joni Mitchell. Today’s title is a line from ... ?
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
PROPERTY MARKET
The hike in interest rates coming from the European Central Bank is having a negative effect in the sense that - obviously - mortgage repayments have risen substantially. Moreover, according to the head of the association of Balearic estate agents, the interest rises have caused a fall in demand by as much as 20%. While defaults are not necessarily going to happen, the Spanish central bank has nevertheless called on banks to try and prevent defaulting (which has, presumably, to mean a limit on credit). Putting this in context, there has been an annual 7% increase in the granting of loans/mortgages over the past three years. So, while the property market has been buoyant, the worry is that it has been predicated - as in other countries - on too-easy credit. Talking to local estate agents, it is clear that the market has, certainly at the lower and middle ends, all but ground to a halt.
QUIZ
Yesterday - Joni Mitchell. Today’s title is a line from ... ?
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
Friday, June 15, 2007
I’m Forever Bursting Bubbles
Has the property bubble in Spain finally burst?
The stock market took a dive a while back as investors sold property stocks in anticipation of an end to the boom. And now it seems as though the harsher realities of the market are about to hit home. I spent some time this morning speaking with some local estate agents. There is some “difficulty” was a comment on more than one occasion. For difficulty, read lack of sales.
Fact is that there is a glut of speculative development, a general view that property is overpriced, some concerns over legalities and also interest-rate rises.
Much of Spain’s recent economic boom has been based on the construction sector. The downturn in the market threatens, it is said, two out of five construction companies. As the boom has lasted, more and more players have come into a market - across the sector - eyeing strong returns. But no boom lasts forever.
Despite this, it is also being said that a drop in prices may not feed through for at least a year if not longer. Perhaps so, but there is one factor that may hasten this. It is not uncommon for people to buy a new house with an existing property (and mortgage) acting as a form of collateral, so to speak. While the intention may be to sell the first property, there has not always been pressure to do so, especially if the market is buoyant and interest rates are reasonable. Take these elements out of the equation, or rather replace them with instability and increased mortgages, and the pressure to sell - at a lower price - becomes a likelihood. It is also the case that consumer debt in Spain is over-leveraged (in other words, people are too stretched, even by comparison with the UK). It may sound remarkable to UK readers who will be aware of the apparently disproportionate house-price to salary ratio, but the ratio of house prices to wages is above that of the UK.
For the potential buyer, therefore, this could all be good news, though the potential volatility - at least in the short term - may mean buyers holding off. Whether this market shift also affects Mallorca as much as the mainland is another question, though - as some estate agents are suggesting - “difficulties” are already in the system.
On the other hand ... Back in 2002 I distinctly recall it being said that prices would come down within a couple of years. It was argued that prices then were inflated, largely as a result of the introduction of the euro. Well, that is no longer an issue, and it could just be that the property market, as then (when prices kept going up), turns out to be more robust than is being suggested. But the euro remains an issue in one very important respect, and this is - arguably - the nub of the whole property story. Spain entered the single currency with an exceptionally low interest rate, which the European Central Bank seems likely to increase. Interest rates have been below inflation rates, thus creating the circumstances for boom.
The Bank of Spain is saying that there will be no crash, placing faith - in part - in the level of immigration to buoy demand. The Bank’s main concern lies with the financing arrangements of the leading construction companies, which also means the lending arrangements of the banks.
Quiz. I’m not letting you off. It’s a great question, yesterday’s, so another day at least ...
PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
N.B. Acknowledgment due to www.ft.com for some information in compiling today’s piece.
The stock market took a dive a while back as investors sold property stocks in anticipation of an end to the boom. And now it seems as though the harsher realities of the market are about to hit home. I spent some time this morning speaking with some local estate agents. There is some “difficulty” was a comment on more than one occasion. For difficulty, read lack of sales.
Fact is that there is a glut of speculative development, a general view that property is overpriced, some concerns over legalities and also interest-rate rises.
Much of Spain’s recent economic boom has been based on the construction sector. The downturn in the market threatens, it is said, two out of five construction companies. As the boom has lasted, more and more players have come into a market - across the sector - eyeing strong returns. But no boom lasts forever.
Despite this, it is also being said that a drop in prices may not feed through for at least a year if not longer. Perhaps so, but there is one factor that may hasten this. It is not uncommon for people to buy a new house with an existing property (and mortgage) acting as a form of collateral, so to speak. While the intention may be to sell the first property, there has not always been pressure to do so, especially if the market is buoyant and interest rates are reasonable. Take these elements out of the equation, or rather replace them with instability and increased mortgages, and the pressure to sell - at a lower price - becomes a likelihood. It is also the case that consumer debt in Spain is over-leveraged (in other words, people are too stretched, even by comparison with the UK). It may sound remarkable to UK readers who will be aware of the apparently disproportionate house-price to salary ratio, but the ratio of house prices to wages is above that of the UK.
For the potential buyer, therefore, this could all be good news, though the potential volatility - at least in the short term - may mean buyers holding off. Whether this market shift also affects Mallorca as much as the mainland is another question, though - as some estate agents are suggesting - “difficulties” are already in the system.
On the other hand ... Back in 2002 I distinctly recall it being said that prices would come down within a couple of years. It was argued that prices then were inflated, largely as a result of the introduction of the euro. Well, that is no longer an issue, and it could just be that the property market, as then (when prices kept going up), turns out to be more robust than is being suggested. But the euro remains an issue in one very important respect, and this is - arguably - the nub of the whole property story. Spain entered the single currency with an exceptionally low interest rate, which the European Central Bank seems likely to increase. Interest rates have been below inflation rates, thus creating the circumstances for boom.
The Bank of Spain is saying that there will be no crash, placing faith - in part - in the level of immigration to buoy demand. The Bank’s main concern lies with the financing arrangements of the leading construction companies, which also means the lending arrangements of the banks.
Quiz. I’m not letting you off. It’s a great question, yesterday’s, so another day at least ...
PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
N.B. Acknowledgment due to www.ft.com for some information in compiling today’s piece.
Sunday, June 03, 2007
Filthy Rich and Catflap
I overlooked something. Last week’s “Sunday Times” (well, I am only a week out) had this thing about Mallorcan property. Not just any old property, but ones such as the Cielo de Bonaire in these northern parts, which is on the market for 34 million quid.
34 million quid!?
Quoting Matthias Kühn, a partner in this development and head of the ubiquitous Kühn & Partner (why is it that estate agent ubiquity in Mallorca appears to be Germanic, what with Kühn and Engel & Völkers?), he can “smell the indication that more (very rich people) are coming.” Coming to Mallorca, that is.
Chances are that if you’ve got 34 million quid to lavish on a Mallorcan pile, you’ve probably also got sufficient stashed away not to be too bothered if the whole place goes belly-up. With all the dire predictions of the effects of climate change on Mallorca, I can’t help feeling that I’d rather put my 34 million quid into a place in Estonia. But maybe for the super-rich, the long-term doesn’t exist. Not sure I’d be confident that in 40 years’ time 34 thousand quid, let alone 34 million, could be recouped from a property investment here.
Knew it wouldn’t last. Restaurant of the week thing, that is. Here’s the first of Bar Of The Week. A real cracker, too.
LA BIRRERIA
Where: C/. Colón 3, Pollensa, just off the Plaça Major by Bar Espanyol but with a terrace in the square.
What: Over 50 types of beer. Plus snacks like pinchos (snacks on bread), pa amb olis (which are also snacks on bread to be honest).
When: Every day.
Who: Pep is your main man.
Why: Delightful stone-walled interiors, very relaxing atmosphere, music, nice terrace in the main square. Oh, and all those beers. From all over the place, and some stonkers from Belgium. 12%, my friends. 12%. Be careful!!
Short weather word: It is still rather unsettled. Rain again this morning. Not what the boys want.
And so, briefly returning to Sitcom Quiz, today’s title. Who starred in it?
PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
34 million quid!?
Quoting Matthias Kühn, a partner in this development and head of the ubiquitous Kühn & Partner (why is it that estate agent ubiquity in Mallorca appears to be Germanic, what with Kühn and Engel & Völkers?), he can “smell the indication that more (very rich people) are coming.” Coming to Mallorca, that is.
Chances are that if you’ve got 34 million quid to lavish on a Mallorcan pile, you’ve probably also got sufficient stashed away not to be too bothered if the whole place goes belly-up. With all the dire predictions of the effects of climate change on Mallorca, I can’t help feeling that I’d rather put my 34 million quid into a place in Estonia. But maybe for the super-rich, the long-term doesn’t exist. Not sure I’d be confident that in 40 years’ time 34 thousand quid, let alone 34 million, could be recouped from a property investment here.
Knew it wouldn’t last. Restaurant of the week thing, that is. Here’s the first of Bar Of The Week. A real cracker, too.
LA BIRRERIA
Where: C/. Colón 3, Pollensa, just off the Plaça Major by Bar Espanyol but with a terrace in the square.
What: Over 50 types of beer. Plus snacks like pinchos (snacks on bread), pa amb olis (which are also snacks on bread to be honest).
When: Every day.
Who: Pep is your main man.
Why: Delightful stone-walled interiors, very relaxing atmosphere, music, nice terrace in the main square. Oh, and all those beers. From all over the place, and some stonkers from Belgium. 12%, my friends. 12%. Be careful!!
Short weather word: It is still rather unsettled. Rain again this morning. Not what the boys want.
And so, briefly returning to Sitcom Quiz, today’s title. Who starred in it?
PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
Tuesday, May 01, 2007
The Start Of Summer
First of May. Public holiday.
When isn’t it a public holiday here? I get endlessly confused by public holidays. Just when you think it’s some religious deal, turns out to be nothing of the sort, like Constitution Day. So May 1 is boring old Labour Day. Not a saint in sight. You could be forgiven for thinking that the only saint who is not celebrated here is Simon Templar.
Not that Labour Day will be given its rightful celebration. Oh no. The first year in Britain when this became a holiday I was still at university. My what a craic. We kidnapped a prominent member of the Socialist Workers’ Party, got him drunk and took compromising photos. All in the best of taste of course.
Spain may have enjoyed something of an economic miracle, but it still tries its hardest to suppress productivity. Take a saint, any old saint will do. Have a holiday.
That economic miracle, that economic boom, has been based to a large extent on property, and property prices. Well, things are not looking so good. The Spanish stock market has been hit by investors divesting their property stocks in anticipation of the bubble bursting in the Spanish property market. About time, too. Property is overpriced. Not necessarily wonderful news for all those on Estate Agent Street in Puerto Pollensa. Or maybe it will be, if property becomes more affordable.
But back to saints. The Catalan for saint is sant. I heard a joke yesterday. Who’s the saint for food? Santwich. Doesn’t really work in its written form, but I thought it was quite funny.
One other thing about the first of May is that denotes the start of summer, in that here spring and autumn more or less don’t register in people’s consciousnesses. Summer is May to October, in other words the main tourist season.
Pop quiz – the title of the last piece came from Jefferson Starship, in the days when they still were Jefferson.
Index for April
British products - 17 April 2007
Cafe Bony - 17 April 2007
Can Picafort - 27 April 2007
Corruption - 27 April 2007
Cyclists - 19 April 2007, 25 Apirl 2007, 27 April 2007
Didis Coast Adeventure - 25 April 2007
Driving - 7 April 2007
Eroski Syp - 17 April 2007
Estate agencies - 19 April 2007
Grupo Boulevard - 11 April 2007
Language -17 April 2007, 19 April 2007, 21 April 2007
Peter Maffay - 25 April 2007
Nordic walking - 25 April 2007
Parking - 3 April 2007
Religion - 11 April 2007
Road deaths - 13 April 2007
Roads - 20 April 2007
Roundabouts - 7 April 2007
Sa Pobla Cricket Club - 1 April 2007
Sunbeds - 27 April 2007
Taste of India - 3 April 2007
Tourists - 3 April 2007, 7 April 2007
Traditions - 21 April 2007
Trencadora - 25 April 2007
Vamps - 3 April 2007, 11 April 2007, 15 April 2007
Weather - 13 April 2007
(PLEASE REPLY TO info@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE. TA.)
When isn’t it a public holiday here? I get endlessly confused by public holidays. Just when you think it’s some religious deal, turns out to be nothing of the sort, like Constitution Day. So May 1 is boring old Labour Day. Not a saint in sight. You could be forgiven for thinking that the only saint who is not celebrated here is Simon Templar.
Not that Labour Day will be given its rightful celebration. Oh no. The first year in Britain when this became a holiday I was still at university. My what a craic. We kidnapped a prominent member of the Socialist Workers’ Party, got him drunk and took compromising photos. All in the best of taste of course.
Spain may have enjoyed something of an economic miracle, but it still tries its hardest to suppress productivity. Take a saint, any old saint will do. Have a holiday.
That economic miracle, that economic boom, has been based to a large extent on property, and property prices. Well, things are not looking so good. The Spanish stock market has been hit by investors divesting their property stocks in anticipation of the bubble bursting in the Spanish property market. About time, too. Property is overpriced. Not necessarily wonderful news for all those on Estate Agent Street in Puerto Pollensa. Or maybe it will be, if property becomes more affordable.
But back to saints. The Catalan for saint is sant. I heard a joke yesterday. Who’s the saint for food? Santwich. Doesn’t really work in its written form, but I thought it was quite funny.
One other thing about the first of May is that denotes the start of summer, in that here spring and autumn more or less don’t register in people’s consciousnesses. Summer is May to October, in other words the main tourist season.
Pop quiz – the title of the last piece came from Jefferson Starship, in the days when they still were Jefferson.
Index for April
British products - 17 April 2007
Cafe Bony - 17 April 2007
Can Picafort - 27 April 2007
Corruption - 27 April 2007
Cyclists - 19 April 2007, 25 Apirl 2007, 27 April 2007
Didis Coast Adeventure - 25 April 2007
Driving - 7 April 2007
Eroski Syp - 17 April 2007
Estate agencies - 19 April 2007
Grupo Boulevard - 11 April 2007
Language -17 April 2007, 19 April 2007, 21 April 2007
Peter Maffay - 25 April 2007
Nordic walking - 25 April 2007
Parking - 3 April 2007
Religion - 11 April 2007
Road deaths - 13 April 2007
Roads - 20 April 2007
Roundabouts - 7 April 2007
Sa Pobla Cricket Club - 1 April 2007
Sunbeds - 27 April 2007
Taste of India - 3 April 2007
Tourists - 3 April 2007, 7 April 2007
Traditions - 21 April 2007
Trencadora - 25 April 2007
Vamps - 3 April 2007, 11 April 2007, 15 April 2007
Weather - 13 April 2007
(PLEASE REPLY TO info@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE. TA.)
Subscribe to:
Posts (Atom)
