- Property prices up 5.4% in year to April 2018 (Tinsa)
- New home growth picked up sharply towards end of 2017 (ST Sociedad de Tasación)
- Balearic homes attracting particular interest (Taylor Wimpey España)
A new report from the ST Sociedad de Tasación, one of the largest real estate valuation firms in Spain, has shown that the average price of new and second hand residential properties in Spain increased by 4.3% over the course of 2017. New home growth picked up significantly during the second half of the year, rising to 2.3% from a rate of 1.7% for the first six months of 2017. The company’s Confidence Index has also ticked upward, with confidence increasing in the first quarter of 2018.
Figures from Tinsa reveal that the trend has continued into 2018. The price of new and second hand housing was up by 5.4% in the year to April 2018. It is the highest growth rate since Q3 2007, according to Tinsa.
Price growth in the Balearics has been particularly high, at 5.6% in the year to April 2018. Leading Spanish home builder Taylor Wimpey España reports that demand is also strong, with Mallorca properties proving particularly popular.
“We’ve seen some excellent growth in the Spanish property market over the past year, with metropolitan areas and the Balearic and Canary Islands faring particularly well. Not only are prices rising, but also consumer confidence and satisfaction, which is excellent news for the market as a whole.”
Marc Pritchard, Sales and Marketing Director of Taylor Wimpey España
Customer satisfaction stood at 100% for the most recent month (March 2018) for Taylor Wimpey España’s Balearic properties, having remained well above 95% since late 2017. With resorts such as Marina Golf available, it’s easy to see why. The modern, Mediterranean-style village complex offers three-bedroom homes with south-west-facing private terraces and gardens, all surrounded by some of the islands top golf clubs. A generously proportioned communal pool with solarium area and golf course views, and delightful landscaped gardens, complete the offering. The last homes on the development are now key-ready, with prices starting at €549,000.
Also popular on the island is Acquamarina, a collection of two-bedroom apartments just 1 km from the sea and 6 km from the nearest golf course. Mallorca is a popular destination for golfers as well as for cyclists and, of course, water sports and beach lovers.
Spain’s economy does well from foreign property buyers, who are drawn to locations such as Mallorca for both second homes and primary residences. Visitor numbers were up 6% (to 13.7 million) in the year to March 2018, according to the National Institute of Statistics (INE). The number of foreigners registering with Spain’s social security system was also up, by 8.1% over the course of 2017.
“Spain’s myriad attractions mean that it remains a popular choice for those looking for a better lifestyle, from families with young children to retirees. Brits in particular have a long-standing love of Spain, making up the largest proportion of visitors from any single country and the key buyer group for foreigners purchasing Spanish homes. With price-growth at a ten-year high, we expect 2018 to be a very strong year for the Spanish property market.”
Marc Pritchard, Sales and Marketing Director of Taylor Wimpey España
UK’s Sunak says public finances won’t be fixed overnight
By William Schomberg and David Milliken
LONDON (Reuters) – British finance minister Rishi Sunak said on Sunday he would not rush to fix the public finances as he readied a budget plan which will pile more borrowing on top of almost 300 billion pounds ($418 billion) of COVID-19 spending and tax cuts.
Sunak, who is due to deliver his budget to parliament on Wednesday, promised to help the UK economy through a gradual lifting of lockdown measures that will last at least until late June. But he also said he would “level with people” about how Britain’s 2.1 trillion-pound debt pile would carry on growing without action.
“This is not something that’s going to happen overnight. Given the scale of the shock we’ve experienced, the scale of the damage, this is going to take time to fix,” Sunak told Sky News on Sunday.
“But it’s important … to also have strong public finances over time.”
Sunak declined to comment on specific tax moves – including a widely reported plan to raise corporation tax – ahead of his budget speech.
He also would not say if he would stick to his Conservative Party’s promises made in 2019 – before the pandemic – not to raise the rates of income tax, value-added tax or national insurance contributions, the biggest sources of tax revenue.
The Sunday Times said Sunak was planning to raise income tax revenues by 6 billion pounds by freezing the point at which people start paying the basic rate of income tax and the threshold at which they begin paying the higher rate.
Britain has suffered the biggest COVID-19 death toll in Europe and the heaviest economic shock among big rich countries, according to the headline measures of official data.
In response, Sunak has racked up the country’s biggest ever peacetime budget deficit to protect jobs and help businesses, and to increase funding for health and other services.
“We went big, we went early, and there’s more to come and people should feel reassured by that,” Sunak told BBC television.
Businesses such as shops, bars, clubs, hotels, restaurants, gyms and hair salons will be offered 5 billion pounds of additional grants, the government said on Saturday.
BORROWING COSTS EDGE UP
But Sunak also raised the prospect of a fiscal reckoning to prepare Britain for future economic shocks and he noted a recent rise in the cost of borrowing from record lows as debt markets worldwide price in more inflation from the global stimulus push.
“Interest rates have been at very low levels, which does allow us to afford slightly higher debt levels,” he said.
“But that can always change and we’re seeing that in the last few weeks,” he said. “We have to be acute to that possibility.”
The opposition Labour Party said Sunak was already putting pressure on local authorities to increase taxes.
“We are an outlier both in terms of having had the worst economic crisis of any major economy but now also in having a government that seems to be focused on increasing tax right now on families when other countries have focused on securing the recovery,” its finance spokeswoman Anneliese Dodds said.
(Reporting by William Schomberg; Writing by David Milliken; Editing by Susan Fenton)
Sunak warns of bill to be paid to tackle Britain’s ‘exposed’ finances – FT
(Reuters) – British finance minister Rishi Sunak will use the budget next week to level with the public over the “enormous strains” in the country’s finances, warning that a bill will have to be paid after further coronavirus support, according to an interview with the Financial Times.
Sunak told the newspaper there was an immediate need to spend more to protect jobs as the UK emerged from COVID-19, but warned that Britain’s finances were now “exposed.”
UK exposure to a rise of one percentage point across all interest rates was 25 billion pounds ($34.83 billion) a year to the government’s cost of servicing its debt, Sunak told FT.
“That (is) why I talk about leveling with people about the public finances (challenges) and our plans to address them,” he said.
The government has already spent more than 280 billion pounds in coronavirus relief and tax cuts this year, and his March 3 budget will likely include a new round of spending to prop up the economy during what he hopes will be the last phase of lockdown.
He is also expected to announce a new mortgage scheme targeted at people with small deposits, the UK’s Treasury announced late on Friday.
Additionally, the government will also announce a new 100 million pound task force to crack-down on COVID-19 fraudsters exploiting government support schemes, it said.
(Reporting by Bhargav Acharya in Bengaluru; Editing by Leslie Adler and Cynthia Osterman)
G20 promises no let-up in stimulus, sees tax deal by summer
By Gavin Jones and Jan Strupczewski
ROME/BRUSSELS (Reuters) – The world’s financial leaders agreed on Friday to maintain expansionary policies to help economies survive the effects of COVID-19, and committed to a more multilateral approach to the twin coronavirus and economic crises.
The Italian presidency of the G20 group of the world’s top economies said the gathering of finance chiefs had pledged to work more closely to accelerate a still fragile and uneven recovery.
“We agreed that any premature withdrawal of fiscal and monetary support should be avoided,” Daniele Franco, Italy’s finance minister, told a news conference after the videolinked meeting held by the G20 finance ministers and central bankers.
The United States is readying $1.9 trillion in fiscal stimulus and the European Union has already put together more than 3 trillion euros ($3.63 trillion) to keep its economies through lockdowns.
But despite the large sums, problems with the global rollout of vaccines and the emergence of new coronavirus variants mean the future path of the recovery remains uncertain.
The G20 is “committed to scaling up international coordination to tackle current global challenges by adopting a stronger multilateral approach and focusing on a set of core priorities,” the Italian presidency said in a statement.
The meeting was the first since Joe Biden – who pledged to rebuild U.S. cooperation in international bodies – U.S. president, and significant progress appeared to have been made on the thorny issue of taxation of multinational companies, particularly web giants like Google, Amazon and Facebook.
U.S. Treasury Secretary Janet Yellen told the G20 Washington had dropped the Trump administration’s proposal to let some companies opt out of new global digital tax rules, raising hopes for an agreement by summer.
“GIANT STEP FORWARD”
The move was hailed as a major breakthrough by Germany’s Finance Minister Olaf Scholz and his French counterpart Bruno Le Maire.
Scholz said Yellen told the G20 officials that Washington also planned to reform U.S. minimum tax regulations in line with an OECD proposal for a global effective minimum tax.
“This is a giant step forward,” Scholz said.
Italy’s Franco said the new U.S. stance should pave the way to an overarching deal on taxation of multinationals at a G20 meeting of finance chiefs in Venice in July.
The G20 also discussed how to help the world’s poorest countries, whose economies are being disproportionately hit by the crisis.
On this front there was broad support for boosting the capital of the International Monetary Fund to help it provide more loans, but no concrete numbers were proposed.
To give itself more firepower, the Fund proposed last year to increase its war chest by $500 billion in the IMF’s own currency called the Special Drawing Rights (SDR), but the idea was blocked by Trump.
“There was no discussion on specific amounts of SDRs,” Franco said, adding that the issue would be looked at again on the basis of a proposal prepared by the IMF for April.
While the IMF sees the U.S. economy returning to pre-crisis levels at the end of this year, it may take Europe until the middle of 2022 to reach that point.
The recovery is fragile elsewhere too. Factory activity in China grew at the slowest pace in five months in January, and in Japan fourth quarter growth slowed from the previous quarter.
Some countries had expressed hopes the G20 may extend a suspension of debt servicing costs for the poorest countries beyond June, but no decision was taken.
The issue will be discussed at the next meeting, Franco said.
(Additional reporting by Andrea Shalal in Washington Michael Nienaber in Berlin and Crispian Balmer in Rome; editing by John Stonestreet)
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