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Tourist Property Prices Wilt in Euro Drought   by Roger Munns



Spain and Portugal have suffered one of their worst droughts


on record this summer, with consequences from empty


swimming pools for the tourist to economic disaster for


farmers losing their crops and livestock.

Roger Munns, Managing Director of Tribune Properties,


predicts that property prices in the two European countries


could drop as much as fifteen per cent in some areas as more


owners decide to put their villas and apartments on the


market.

‘For many owners of second homes the original motivation to


buy was to have somewhere they could spend time in a


relaxing environment. Coupled with the thought of a good


investment for the future, the market for overseas homes


from buyers in the UK, Germany and Scandanavia has really


taken off in the last twenty five years.

But soaring temperatures and a strain on the water supply


could have consequences for their rental returns next year,


which many owners rely on to meet their overseas mortgage.

Many holidaymakers want to rent a villa with a pool – but


the attraction soon goes if the pool is empty. Some golf


courses are having to cut down on watering their greens too,


and it won’t take a big fall in tourism to mean the


difference between breaking even and not being able to meet


the mortgage commitments for some overseas property owners.

This autumn could see more properties than usual being put


on the market, with a consequential fall in prices’.

Early warning signs of a potential fall in property prices


have already been seen on the Spanish Mediterranean island


of Menorca, which has enjoyed better rainfall this year than


the Spanish mainland and no water restrictions, but some


villas being cut in price by over ten per cent.

Water restrictions on the mainland are having an impact on


potential villa buyers, with many questioning the value of a


swimming pool when they might not be able to use it.

Portugal has recently asked Spain for 6 million Euros in


compensation, as water levels in the River Douro which runs


through both countries fell below limits established in a


bilateral agreement,with Portugal coming close to accusing


her neighbour of stealing her water.

Good Time to Buy

‘For anyone considering buying a property in Portugal or


Spain, this September and October could be the ideal time to


buy’, say Tribune Properties. ‘Unusually many properties


were being reduced in price in August, traditionally a good


month for sales.

We normally see villa and apartment prices being dropped mid


September onwards when the tourists and potential buyers are


thinner on the ground as some owners are keen to sell and


don’t want to wait until the following Easter before having


a real chance of selling again.’

The drought isn’t the sole cause of property prices falling


add Tribune Properties, saying it has accelerated price


falls and come on top of an already poor year for many


estate agents in Europe.

‘A good barometer for European property are the tax havens


of Monaco and Andorra which don’t rely on ‘tourist’ buyers,


but usually have a steady supply of buyers interested in


taking advantage of the zero income tax rate. Andorra is in


the Pyrenees and has no water supply problem – but estate


agents were twiddling their thumbs this summer waiting for


buyers to to show – and they didn’t.

Monaco similarly has had no water supply problems, but has


also seen a lack of buyers. The tourists are still visiting


the Principality and hotels in Monaco and Monte Carlo


have been as busy as ever, but again there is a lack


of serious property buyers, and negative property inflation


is quite possible in Monaco this year for the first time in


a decade.

With more property available on the market we would suggest


buyers draw up a list of three or four villas they have


viewed and liked, and then suggesting to the owners that


they would consider buying at fifteen per cent below the


advertised asking price to see which ones are prepared to


consider it.’

Sea Water

One possible answer to secure the long term tourist trade


and consequential property market is to follow Malta’s


example of building desaliniation plants, converting sea


water to drinking water, sometimes known as ‘reverse


osmosis’.

The Mediterranean island competes with Portugal and Spain


for the attention of second home buyers, and has a healthy


tourist industry – despite having no rivers and low


rainfall, allowing the island to function normally even in


drought conditions.

The water from this source can be used for agriculture and


ensuring adequate reserves to fight forest fires for example


- it might just be the answer too for the swimming pools and


golf courses – and would allow a plentiful supply of high


quality for domestic use.



Author Info:

For real estate in Andorra http://www.propertyandorra.com ,
real estate Monaco http://www.monacoproperty.net

For details of hotels in Monaco, Monaco weather,Monaco map and the Monaco Grand Prix
http://www.yourmonaco.com


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