REACT NewsletterHappy EasterMarch 2006in this issue

* Don't Rely on an Estate Agent

* Re-Sales are best bet

* Don’t Move Money Around

Greetings!

Welcome to the March edition of our newsletter, which you will find to be very informative to say the least. The sun is now tearing into the beaches and with the Easter holiday's around the corner, investors and holiday home owners are all set to put their feet up. The property market has balanced out evenly with both purchaser and vendors making very handsome gains. The continuing rise of property has now evened out and an average of 12% across the board is now much more realistic. Mortgage rates still hold at an average 2.5% base rate compared to England’s 4.5%. A difference we are noticing is now first time buyers from England are now favoring the overseas property market, as they are able to gain access to the property ladder, with a realistic mortgage. This then provides a second income for them offering the banks in England further security for lending against a new home. Overall the market is steady, and seems to be now, on a great level for everyone to enjoy the sunshine

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Don't Rely on an Estate Agent

One would assume that the finding and purchasing process is where the expertise of an estate agent comes in. But the system in the UK doesn’t work like that, and largely it doesn’t work like that abroad either.

 In the early days, I used to believe that when estate agent asked you how they could help, they actually meant it (whether I was the buyer or the seller). As we all know it’s just a considerate way of luring you in, then selling you something they simply want to off load and make.....

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~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Re-Sales are best bet

HOMEBUYERS in the Canaries have been warned to stop putting their money into new developments. A lengthy study by a group of property experts has cited poor returns on investments in new-build houses in comparison with resale homes. The research shows resale property values in the archipelago have increased by a whopping 185 per cent years. And resale properties in the Canaries are increasing in value faster – at an incredible three times the rate of a new home. And the worth of buying a resale property is made all the clearer by lower average taxes between new and resale homes.

Last year, the average taxable value of a Canary resale home was 1,648.5 per square meter, where the average for a new build was 1,763.3 per square metre. And that is despite a 12.2 per cent rise in the figure for resale homes in comparison to a 4.8 per cent rise in the average tax value for new houses .The figures released by Tasaciones InmobiliariasSA, (Tinsa) also found that homes in rural areas of Tenerife are increasing in value faster than those in tourist resorts, with the highest increases in value recorded in Los Realejos. There prices increased by 15 per cent, in Guia deIsora by

12 per cent and in Icod de Los Vinos and Los Silos by

11 percent. The director of Tinsa, LuísLeira Docampo, released the figures on Monday and predicted a slight slowdown in the Canary housing market.

Do campo said changes in interest rates would dictate the slow down. Alvaro Arbelo, director of Caja Canarias said the increase in house purchases for investment purposes was not a positive element for the economy of the islands and at some point there would have to be a correction. He said it was a worrying factor in an economy that was trying to

become competitive.

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~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Don’t Move Money Around

When a lender reviews your loan package for approval, one of the things they are concerned about is the source of funds for your down payment and closing costs. Most likely, you will be asked to provide statements for the last two or three months on any of your liquid assets. This includes checking accounts, savings accounts, money market funds, certificates of deposit, stock statements, mutual funds, and even your company 401K and retirement accounts...

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Article submitted on 2008-09-12