The British government is to trigger the infamous Article 50 on Wednesday 29th of this month. This is the mechanism to begin the UK’s departure from the EU. It should apparently take two years to achieve. Maybe.
It is the beginning of – at the very least – a leap into the dark. The seminal joke circulating on Twitter says: ‘Don’t forget, the clocks go forward one hour on Sunday and then back sixty years the following Wednesday’.
This may be a tragedy for the United Kingdom (or, yes, a blithe and fearless ascent into some fluffy Wonderland), but, on the whole, it could be a good thing for the remaining 27 States within Europe.
Two reasons: firstly, because the UK was always the one putting the brakes on the European project and secondly, ensuring that no one else follows the British exit, we can expect a slightly more democratic and sensible Europe – the future Home of Straight (and Curly) Bananas.
The losers in all this are the ones that Spanish Officialdom might describe dismissively as being ‘en una situación irregular’. Those of us who weren’t planned for in the European Utopia: the expatriate British in Europe, the expatriate Europeans in Britain.
Between one thing and another, these so-called ‘bargaining chips’ (who don’t have much political representation) add up to a little over four million souls - the population, for example, of Croatia.
We are left with the European reaction to all this – perhaps London Loves Business can explain:
‘...Fury has erupted by euro-sceptics after Jean-Claude Juncker boasted how harshly Britain will be punished and that no-one else will want to leave the EU. He said that the member states will all “fall in love” with each other again and this will ensure the survival of the Brussels club. Theresa May was also threatened that Britain will have to accept demands on the divorce bill as Brexit negotiators are preparing of up to a £50bn settlement that is regarded as Britain’s share of the liabilities. Mr Juncker was asked by Germany’s Bild am Sonntag about his concerns of other EU member states leaving the EU following our example in quitting. Mr Juncker said: “No. Britain’s example will make everyone realise that it’s not worth leaving.”...’.
Not a happy divorce it seems, but then, they never are...
From Viva (a commercial site): ‘Interest in Spanish property among European buyers reaches double-digit growth, stats show’. British buyers are affected by the Brexit issue, so ‘...Spanish property portal Kyero has taken a slightly different approach in recent months and grouped together ‘Europeans’ as a single entity… and the results are eye-opening. When classed as a single group, the data shows that Europeans account for 60% of all enquiries for Spanish property that Kyero receives, with growth reaching double-digit figures since last summer...’.
From Mark Stücklin’s Spanish Property Insight: ‘Brexit is causing anxiety for more than just the British on the Costa del Sol, reports the Spanish daily El Mundo. This gives you a local perspective, though judging by the readers’ comments you often see on articles like this, some locals welcome Brexit and would be delighted to see fewer Brits around. “What is happening at a national level we notice even more clearly in Málaga,” Violeta Aragón Correa, from the local SACP developers association, told the paper. “Purchases by the British, who are traditionally our best foreign clients, are declining.”...’.
‘Is there a new housing bubble in Spain? House-prices are rising for the third year in a row and the volume of purchases is growing, as the banks open the doors to fresh mortgages, while at the same time, the rise in rentals encourages investors to buy houses to reach higher returns than they might find elsewhere. Following the recovery that started in 2014, the price of housing reached in 2016 "significant increases" that exceeded 10% in some large cities and coastal areas such as Barcelona, Bilbao and San Sebastian, according to the latest Tinsa report, Spain’s main real estate appraisal company...’. From Público here.
From El Boletín, the message is even bleaker: ‘Renting a flat if you are not a tourist, the new “Mission Impossible”. The high returns provided by short or seasonal rentals reduce the traditional rental availability and there are those who buy apartments to rent them through the Internet...’.
Across Europe, houses versus apartments. In Spain, the majority of families live in apartments. In fact, Spain has the highest proportion of apartment users in Europe at around 66%. The European average is 42%. A graph from Paul Kirby here.
‘...One of the greatest and most shameful scandals of the Spanish real estate boom and subsequent crash that started around 2008 was the fact that so many off-plan buyers, who paid tens or even hundreds of thousands of Euro in deposits and off-plan stage payments to developers, ended up losing all their money, with no property to show for it...’. An article from Mark Stücklin on how to get your money back.
The national coordinator for the various associations for urban justice (CAJU) has awarded their annual ‘Justice in Construction’ prize to the Spanish Senate for its work in changing the laws on urban planning. The story at Teleprensa here.
The Costa del Sol hotel industry (AEHCOS) is not happy about the competition from the 20,000 legally registered tourist apartments in the region. They are worried, they say, about the image of the Costa del Sol... More at Hosteltur here.
How Spain’s healthcare works for UK citizens. ‘...Healthcare within the EU works on a reciprocal basis. It relies on the legal principle that people can move around the EU and take their social security, pension, and healthcare entitlements with them. If the UK leaves the EU with no deal, the position of UK citizens in other EU countries that rely on reciprocal healthcare arrangements will be determined by the law of the country in which they reside...’. The excerpt, from The Conversation, comes from a larger article on ‘What a ‘no deal’ Brexit would mean for the healthcare of British pensioners in Spain’.
On European capitals wooing banks from the City of London: ‘...Madrid is also keen to flaunt its abundant stock of commercial and residential real estate ... Madrid currently has 250,000 square meters of office space but that could rise to as much as a million in two years’ time, when Brexit negotiations are expected to have terminated, said Ricardo Martí Fluxá, the president of Spain’s Association of Real Estate Consultants. That’s a four-fold expansion in just two years — proof, if ever needed, that Spain’s real estate industry is back on its feet...’. from Wolf Street here.
Public debt rose again in Spain and in January reached a new high of 1,114,000 million euros. The calculation is that each and every person that lives in Spain owes some 24,000 euros. A report at El Mundo looks at the subject here (Thanks to Per).
The ongoing crisis with the stevedores continues, as the Government took a defeat on a motion to change the laws regarding what appears to be little more than a monopoly controlled by powerful local families in the ports. An EU fine is growing daily.
From El País in English: ‘The number of Spaniards born in Spain but now living abroad has grown for the eighth year in a row. The amount of people listed in 2017 on PERE, a register of Spaniards with foreign residence, is 794,209; last year, that figure was 766,996, according to data released on Wednesday by the National Statistics Institute (INE)...’. The number is, of course, higher, as not all Spaniards abroad have registered with their consulate. Público rates the number of Spaniards abroad at a million, with another 1.5 million foreigners abroad holding Spanish nationality.
Problems for those who live in rural Spain are examined by Público here. It appears that 35% of country-folk live under the risk of poverty or social exclusion.
El País in English discusses the end of the ‘fracking bubble’ in Spain here.
Following from a Government defeat in a bid to resolve the stevedores’ issue, Mariano Rajoy has warned the Opposition that a lack of support could force another general election. He says ‘...he is ready to do “the impossible” in order to see this political term through, but that he needs “a bit of political stability in order to do so.”...’. More at El País in English. That Government defeat over the stevedore issue is examined at El Español here. ‘The Executive of Mariano Rajoy suffered in Parliament last Thursday a historic defeat by not being able to validate the ‘royal decree’ law imposed by Europe to liberalize the stevedores sector. Since 1979 no government had had trouble gathering the simple majority needed to validate a law of this nature. The coup, interpreted in the Moncloa and in the Popular Party as "a betrayal" by both Ciudadanos and the Coalición Canaria in evidencing the weakness of the Government, has reactivated the theory that perhaps the only exit to the current legislature is "an early election"...’.
ETA has announced its firm decision to disarm completely by April 8th. Its locations of weapons and explosives will be turned over to the police by that date ‘unconditionally and unilaterally’. The Spanish official line is rather nonplussed, as ETA was always a useful enemy... the story at El Huff Post here.
From El Confidencial: ‘No more ambiguities and hesitations. Three months after the European Court of Justice ruled that the Western Sahara is not part of Morocco, the Spanish government finally accepts the verdict and braces itself for the storm with which her southern neighbour will react. Spain knows in advance that this pronouncement will displease Rabat and asks whether there will be reprisals...’.
Why has the Government kept quiet on the issue of Cristiano Ronaldo’s fiscal evasion, asks Vozpópuli here.
A big PSOE fish – the anticorruption prosecutor is asking for four years prison for Narcís Serra (the Spanish vice-president under Felipe Gonzalez 1991 to 1995, minister for the defence 1982 to 1991 and previously the mayor of Barcelona. Wiki). The issue is to do with improper procedures at the Caixa Catalunya bank. The story at Público here. The story of the bank’s irregular activities in the property market is at El Mundo here.
The alleged corruption in Aguagest (with darts at both the PP and the PSOE). A video from Asturias Verde here.
Almost two people are processed daily for political corruption in modern Spain, El País reports wearily.
Indeed, it’s at every level... here’s a story from Sur in English: ‘PP councillor resigns over a job offer in return for a vote to oust the mayor of Mijas. The local PP offered a Podemos councillor a job at Club La Costa and said he wouldn’t be reported for a salary irregularity if he agreed to help the party regain power in Mijas...’.
Spilling the beans – an article at Finanzas explains how Hacienda gets information from anonymous denuncias from the Public, often friends, colleagues or sometimes even family. Last year, the tax people received some 12,500 of these tip-offs. (Thanks to Jake).
‘10,000-weapon arsenal seized in Spain was intended for the hands of terrorists in Europe. Spanish police have now released photographs of the weapons that were confiscated in January. The anti-terrorist operation stopped weapons including anti-aircraft guns, howitzers and grenades from falling into the hands of extremists in France, Spain and Belgium. Some of the weaponry was said to be powerful enough to “bring down an aircraft.”...’. The item comes from Liberty Park Press here.
Two items from The Olive Press follow:
‘Albert Rivera says he offers his ‘total support’ to British expats living in Spain. The Ciudadanos leader was speaking at a party rally in Mijas. Speaking exclusively to The Olive Press afterwards, Rivera backed Brits living here, with Brexit currently causing concern among Spain’s British expat community. “I offer all my support to British people here in Spain,” he said. “I know there are a lot of British people who wanted to carry on being in the EU, but it looks like it’s going to be confirmed soon the UK is going to start the process of exiting. “I fully back the good relationship the Spanish and UK governments have, despite this decision.” Rivera also praised the Costa Del Sol’s British community during his speech, highlighting the area’s multi-cultural mix...’. (Here).
‘Spain backs common agreement to secure rights of British expats ‘in principle’. While not making promises, the country has said it agrees to a reciprocal deal ‘in principle’. It is good news for UK Prime Minister Theresa May, who has been keen to secure a commitment from EU countries to protect the rights of Brits living on the continent after Brexit...’. (Here).
The story ‘Brexit Breakthrough: Spain backs PM's bid to win fair deal for British expats’ also appears in The Daily Express here (with one of those photographs of nostalgic Britons surrounded by the Union Flag in some far-away bar...). An alternate (and rather more probable view) comes from Eurocitizens here: ‘UK Nationals will lose all citizenship rights on Britain’s departure from the EU’.
‘We feel like third-class immigrants’, headlines an article about Spaniards in the UK, where there is rather more worry about their future than might be found with British ex-pats in Spain. An article at El Confidencial here. ‘Don’t worry’, says someone, ‘nothing will happen to you’...
If you are in Madrid on Saturday 25 March, you can help swell the group of British citizens in Spain who will be doing what Madrileños do best.... demonstrate through the streets of their lovely capital city!
EuroCitizens, based in Madrid, are asking all of us to join them on Saturday 25 March, the 60th anniversary of the signing of the Treaty of Rome that led to the creation of the European Union which allowed us to live and make our homes in Spain.
There will be other celebratory demonstrations through Europe and the one in Madrid starts in Plaza del Callao at 18.00 with several other groups taking part.
It is an excellent opportunity to get across our message that British and Spanish citizen rights are under threat from Brexit.
We all want to defend our vision of a more open and tolerant Europe, so we hope to see you there...
‘The leadership of Podem, the Catalan affiliate of national anti-austerity party Podemos, announced Tuesday after lengthy negotiations that Podem has agreed to unite with the Barcelona en Comú movement led by Barcelona Mayor Ada Colau and other left-of-centre parties to transform their En Comú Podem electoral coalition into a permanent progressive Catalan political party. The new party, which will be formally debuted on 8th April following a constituent assembly, will unite Podem, Barcelona en Comú, Iniciativa per Catalunya Verds (ICV), Esquerra Unida i Alternativa (EUiA) and the Equo environmentalist party...’. From Progressive Spain here.
‘Catalan President, Carles Puigdemont and Catalan Vice President, Oriol Junqueras, accused the Spanish State of “having abandoned all Catalans” by refusing to open a dialogue in order to come to an agreement on a referendum. “We won’t give up on this right. We will do whatever it takes to allow the Catalans to vote on a referendum this year,” they warned in an op-ed published this Sunday in ‘El País’, Spain’s number one newspaper. Puigdemont and Junqueras also encouraged Rajoy to learn from the United Kingdom’s example and allow Catalans to vote, just as the Scots did in 2014. “We are already at the negotiating table. Is anybody else coming?” they asked rhetorically...’. From Vilaweb in English here.
The Housing Sector: a Summary
by Andrew Brociner
We have been examining the housing sector for some issues and from all sources of information considered, it appears as if we are still in a period of consolidation.
While prices may be picking up slightly, we are still in the same range where we have been for the last few years. Moreover, they remain heterogeneous on a national level, with some regions showing increases and others still decreasing. Also, within these regions, usually only a few provinces are driving much of the increase, while others within the same regions are still registering decreasing prices. So, even though there are some positive signs, the picture as a whole is still mixed.
Sales have increased primarily in Madrid and Barcelona provinces, but not much elsewhere. As for the other provinces, the level of sales continues to be where it has been in the last few years. So, as far as sales is concerned, it is only those two provinces which are showing any increase this past year.
There are several ongoing concerns which explain this situation. One is that the stock of new houses remains high. There was far too much construction taking place during the boom and this stock is being reduced very slowly. In the last few years, the absorption rate has been about 5%, which given the massive stock, is far too little, and this, together with the fact that construction kept right on going for a few years after the boom was over, explains why we are saddled with so many of these constructions so many years later.
While sales have picked up in the last two years, it is the sales of second-hand houses which make up this increase, while the sales of new houses has continued on a downward trend which has lasted many years now. This decreased demand for new houses, together with the excessive construction which took place even after the boom, also explains the large stock of new houses still present.
Another reason for this situation is that the population of Spain remains lower than during the boom. Emigration and low fertility explain why this is the case and the reason behind these two factors is economic, and unemployment in particular: emigration because of better prospects abroad; and fertility as it is inversely correlated with unemployment. Given this population situation, the number of new households set up in Spain is still very low and therefore, the demand for housing remains low.
These elements of supply and demand are clearly affecting the price of housing. The demand factors, such as the reduced number of households set up and decreased population, and the supply factors such as the large stock of new houses since the boom, lead to a dampening of prices. That we are still in a period of consolidation nine years after the boom ended, is concerning and has lasted longer than a normal cycle. This was, however, to be expected, as too much construction went on and prices were rising by extraordinary amounts as we were in a bubble and we are still feeling its repercussions.
It might be tempting to jump on a few positive signs and say that everything is now fine again, but there are some statistics that cannot be ignored: one is that nine years on, some areas still have not bottomed out. This by itself is quite worrisome. Second, sales of new houses have been on a continuous downward trend and are a fraction of what they once were. Added to that, much of the stock of new houses is still present. Third, the figure for new households set up has been steadily decreasing and is at a very low level. And while there are some positive signs, given the heterogeneity of the market, we can only conclude that we are still consolidating.
Oh dear, only 28 of the 350 parliamentarians in the Lower House can speak a second language, says El Confidencial sorrowfully. Famously, Mariano Rajoy is not among them.
A depressing video from The Guardian made – no doubt – for ‘the home market’, makes British ex-pats look stupid. Easy to do? You decide. Less jingoist in content, a Barcelona-based blogger called Timothy Parfitt takes a look at The Guardian’s video of the British bowlers in Orihuela. Maybe we ex-pats should make our own video, he suggests reasonably.
‘One third of Andalusian sewage plants are not safely processing waste. More than 60 centres were found to be breaching national regulations through practices dangerous to both people’s health and the environment, according to a study by Ecologistas en Accion. It found that Estepona and Istán are the worst offenders on the Costa del Sol, along with San Roque and Barbate on Costa de la Luz and the Pradollano plant for the Sierra Nevada ski resort...’. From The Olive Press.
Census figures, drawn from the padrón, are usually incorrect. Sur in English calls on residents to register on the town hall’s books (el padrón municipal) and also discusses how the figures could be improved: ‘Foreign residents urged to do their bit to keep census figures current. The national statistics institute is working closely with town halls across the province to encourage foreign residents to register and renew when necessary...’.
The Spanish Union of Wine-tasters is thrilled to report that fifteen of the eighteen prize-winning wines chosen in the Gran Bacchus de Oro 2017 come from Spain itself, including six from Andalucía. Twenty one countries participated in the competition. The story here.
The best and worst carne picada (minced meat) available in the supermarkets. Four of them analysed have less than 80% meat!
The University of Málaga has created a prize to encourage the study between Ireland and Spain. The George Campbell Prize, named after a famous Irish artist (born in Wicklow, Ireland in 1917) who spent six months of every year in Málaga, comes with an annual prize for the best investigation on the close relationship between the two counties. More here. A video on the artist, ‘Looking for George’, is here . Some of his painting are here.
The Local brings us Spain’s best Parador hotels to visit this springtime...
Spain’s best restaurants – in the middle of nowhere. The Guardian goes out to lunch.
Pitbull & J Balvin – ‘Hey Ma’ featuring Camila Cabello. A jolly Reggaeton song from Cuba, apparently. YouTube here.
Business over Tapas 23 March 2017 Nº 201
A digest of this week's Spanish financial, political and social news aimed primarily at Foreign Property Owners:
With Lenox Napier and Andrew Brociner. Consultant: José Antonio Sierra
For subscriptions and other information about this site, go to businessovertapas.com
***Now with Facebook Page (Like!)***
Note: Underlined words or phrases are links to the Internet. Right click and press 'Control' on your keyboard to access.
Business over Tapas and its writers are not responsible for unauthorised copying or other improper use of this material.