Editorial:
There is no doubt but that Spain has changed. Government calculations show that this country will return next year to a GDP similar to the pre-crisis year of 2007, albeit with two million less people in work. The news this week is that unemployment is in fact down, but it still remains shatteringly high (EPA figures of 23% and ten points higher in Andalucía at 33.6%). Are these levels of unemployment at all possible in a modern European country?
Housing:
'Thousands of villa rental clients are facing a holiday nightmare after a major booking site was hijacked by fraudsters. Conmen have potentially left tens of thousands of tourists without a place to stay in Spain after hacking into the emails of holiday home-owners, via rental site Owners Direct.com. By diverting enquiries, scammers are able to masquerade as the owner in order to get booking fees paid into their own bank accounts...'. The story continues at The Olive Press.
According to a report in Spanish News Today, the Spanish property crisis is over, says the Banco de España – or rather – 'the adjustment of the real estate sector is, in principal, complete'.
'The average period of ownership of a Spanish property has increased by 55 per cent, from 7 years 4 months in 2007, to 11 years and 4 months in 2014, according to new data from the Property Registrars...'. Found at Mark Stüklin's Spanish Property Insight.
Another home condemned to demolition, and another mayor out of a job. This time, in Taberno (a village in Almería), after a house was built illegally with the permission of the mayor Antonio Martos (PP) who has now been 'inhabilitated' from politics for seven years, pending appeal. The owner of the home, on this occasion, is Belgian. An interesting twist however: the judge says the house will not be demolished until the owner 'receives full and complete indemnification on his investment' (a rule initially approved in the Senate following a proposal from the AUAN and SOHA property-owners associations). Story at Europa Press.
Later: it appears that in a second vote in the 'Senate Commission of Justice', carried on May 5th, the majority Partido Popular voted against the ruling Nº 124 and indeed the proposals of all other groups – a final vote on the issue of recognising the rights of 'buyers in good faith' will be held in the coming days. David Jackson explains here.
Tourism:
Headline at El País in English: Spain remains Europeans top vacation destination, survey finds. British, French, Dutch, Italians and Swedish all prefer the Spanish ‛costas’.
Finance:
Unemployment is down, says Europa Press. The INEM (as it used to be called) puts the number at 4,333,016 for the end of April, a fall of 118,923 or 2.7% on March figures. 'It is the largest April fall since 1996', says the ABC, adding that the fall in unemployment from this time last year is a whopping 351,857 persons. Good news for the Government!
'Spain has recovered only five percent of €51.3 billion ($57.2 billion) of state aid given to the country's banking sector since 2009 to prevent its collapse, the Bank of Spain said on Monday. A total of €53.55 billion were provided to Spain's banking sector via a restructuring fund in the aftermath of the financial crisis, including €2.25 billion of contributions from the private sector...'. From The Local.
'Spanish families’ debt with financial institutions fell by 4% in March, compared to the same month in 2014, bringing the household debt total to 740,470 million euros, the lowest figure registered since August 2006...'. From Kyero.
Brussels is worried, according to El Mundo, about a possible rise in public spending in Spain brought about by the hiring of public servants ('funcionarios') in this election year.
'Bankia SA is preparing to sell 4.8 billion euros ($5.4 billion) of Spanish residential and commercial property as international investors return to the nation’s real estate market. The Madrid-based lender is offering 3.3 billion euros of residential properties, 1.1 billion euros of commercial units and land valued at 400 million euros, according to a document sent to investors by Credit Suisse Group AG, which is advising Bankia on the deal...'. Found at Bloomberg.
Politics:
El Paíspublishes a damning attack against the Partido Popular dominated administrations in the Valencia Community, from '...an economy mortgaged to building, irresponsible management and the continuous thievery of public resources...', which, says the newspaper, is now being taken apart as fast as possible to avoid proof of complicity. Various senior politicians and promoters are accused of 'megalomania, excess and waste in large iconic projects...' which have '...suddenly ceased and as if society itself had recovered its collective sanity and its sense of smell that allows it to recognize the stench of corruption...'. In short, the Valencian Community has become a basket case, says the paper. This blistering attack appeared before the latest scandal of the President of the Valencia diputación (See 'Corruption' below).
A survey from the 'obSERvatorio', noted in El Huff Post: Honours go to the Partido Popular 'after the collapse of Podemos' at 22%, PSOE At 21%, Ciudadanos at 19.5% and Podemos at 18%. Another survey. This one is a questionnaire called Encuestamos – On 1,000 people surveyed, it gives the honours to the PSOE with 24%. The PP follows at 22.9% and Podemos third at 21.2%.
Luis Gestoso, a senior member of the Murcian Autonomous Region and head of Emergency Services in the regional government, has resigned from the Partido Popular Party after thirty years militancy, because, as he tells El Diario, the party is 'saturated by corruption'.
The Economist from London says that Spain suffers from 'amiguismo' in a leading article called 'Inside Jobs: Research suggests that government cronyism may cripple Spain’s economy'. The magazine notes that '...Researchers are beginning to see links between Spain’s excessively cronyistic and corrupt public administration, and the defects that have made it so hard for the economy to recover...'. El Confidencial covers the report, adding that 'corruption is the single main cause of the crisis here'.
Juan Carlos Monedero, co-founder and Nº 3 in Podemos, resigned his position in the party executive on Thursday. Hounded, perhaps, by the Media? Another departure the same day was the editor of El Mundo, Casimiro García-Abadillo, who has been substituted by the owners of the newspaper Unidad Editorial by the younger journalist David Jiménez.
The Podemos manifesto, analysed by El Diario here.
'Susana Díaz fails in first attempt to become President of Andalucía'... David Jackson explains the situation here. 'I'll be President sooner or later', said Ms Díaz defiantly.
Gibraltar First Minister Fabian Picardo says that, if the UK was to leave Europe, then the Rock would be at the mercy of the Spaniards. The ABC appears to think this might be a good idea...
Local Elections:
Campaigning officially starts at midnight tonight (pasting up thousands of posters...). The campaign lasts two weeks, before 'a day of reflection' and then the vote on Sunday May 24th. The PP, the PSOE, Ciudadanos and IU seem to be the main local parties (since Podemos won't field local candidates), together with smaller groups, independent or regionalist parties, Greens, Podemos-clones and so on. Regional elections will be held on the same day (Although not in Andalucía, Catalonia, Euskadi or Galicia). Not everyone can vote in the local elections, of course. You need to be registered on the padrón and over 18. If you are a Spaniard living abroad, then there are various difficulties. The Electoral Register admits problems for the 1.8 million Spaniards concerned (thanks, apparently, to the election reform of 2010). 20 Minutos explores the issue here and Radiocable puts the probable participation at as little as 5% thanks to the bureaucratic hoops. Meanwhile, El Diario reckons that only about 10% of foreign residents in Spain (at 464,000) are legally able to vote in local elections (furthermore, of course, most of this sub-set won't bother anyway).
Corruption:
Alfredo Rus, the president of the Valecia diputación (county council) and mayor of Játiva, says he won't resign, but that he won't seek re-election later this month. The problem? There's allegedly a recording going around of a fellow who sounds a lot like Sr Rus counting twelve thousand euros in what appears to be a bribe. The Partido Popular has suspended his party membership. The damage to the Partido Popular in the forthcoming regional and local elections is discussed at Valencia Plaza here. One site, Mirada Crítica is sufficiently outraged about Sr Rus' activities and his wages from four different public bodies, to publish the headline 'El gánster Alfonso Rus cobra de la Diputación, del Ayuntamiento, de las Cortes y del PP'. They call him 'a gangster'! Lastly, it appears that the politician was inclined towards a 3% commission, says La Sexta TV.
The 'B account' has existed in the Partido Popular's books since the party began, according to new information found at El Diario here and here.
'Around €1,300 million set aside for Guardia Civil training courses is unaccounted for.
Judge Mercedes Alaya – renowned for her uncovering of the ERE scandal – had originally estimated that €950 million was unaccounted for between 2002 and 2011...'. From The Olive Press. For Spanish readers, El Correo also has the story.
Courts
'A Spanish judge Monday took a step towards seizing the assets of Cristina, sister of King Felipe VI, pending her trial in a fraud scandal that has shamed the royal family. It said Cristina, 49, had failed to pay a €2.7 million ($3 million) court bond to cover her liability in the case. It ordered her to hand over a list of her assets with a view to impounding them...'. From The Local.
The ex-mayor Joaquín Tur and the current councillor for urban planning Ana Sala, both from the Alicante town of Calpe, will be in court on May 13th and 14th for town-planning irregularities. More at the virulently anti-speculation site Urbanismo Patas Arriba.
Various:
The University of Málaga is holding a conference in November on the foreign-language media in Spain called: '3º Encuentro Internacional Transfopress. Los medios en lengua extranjera: diversidad cultural e integración'. More at their site here.
Sometimes newspapers find an unlikely story and run with it. Sometimes, those unlikely stories are merely inventions. Here are ten of the worst, reported as gospel by parts of the Spanish press.
Welcome to Balanegra, the 103rd municipality in Almería, after successfully breaking off from Berja with the support of the Consejo Consultivo de Andalucía, an official body.
Also from Almería, the impossibly awful Hotel Algarrobico on the beach outside Carboneras has just successfully had its building licence confirmed (again) by the Andalucian Superior Court of Justice. What will happen now? More here.
A huge white shark off the coast of Magaluf... says The Daily Mirror responsibly. Ideal has the story as well. The Local says it was just a large tuna fish.
Some wag in Cèrda, a small town in Alicante, has re-named a street christened only two months ago by the disgraced politician Alfonso Rus. The street, was 'Carrer Alfonso Rus' (what hubris) and, judging by the photo at El Diario, is now 'Carrer dels dos millons de peles', or in English, 'Street of the Two Million Pesetas'.
From El País in English: 'Fifth skyscraper to join Madrid’s landmark ‘Four Towers’. Constructor OHL announces plans to add another building at Cuatro Torres site'.
See Spain
'Brits make up two-thirds of holiday home buyers in the verdant northern region of Cantabria, knowing they can lay their hands on excellent deals and a way of life that differs vastly from that seen on the Spanish Costas. Rolling green hills, dairy cattle, central European-style chalets in gardens with lawns and hedges, clean and attractive towns and cities, picture-postcard villages and dramatic countryside for walking, cycling or riding horses...'. From Eye on Spain here. The same site has an enthusiastic report on Asturias as well, here.
What's on in Málaga. A useful guide at Malakao here.
'Visiting Extremadura is a journey into the heart of old Spain, from the country’s finest Roman ruins to beautiful medieval cities and villages. Mérida, Cáceres and Trujillo rank among the country's best-preserved historical settlements, while extremeño hamlets have a timeless charm, from the remote hills of the north to beguiling Zafra on the cusp of Andalucía in the south...'. From Lonely Planet.
A site called On The Pulse offers a wide range of useful information for property owners and visitors. Here is their link to a number of guides they have prepared – on fish, wine, castles, medieval towns, fiestas, museums and places to visit.
More Comments on the Housing Sector
by Andrew Brociner
We have been looking at the housing sector in the last three issues, examining the decreasing population and the declining number of new households set up, the large stock of unsold houses and the lack of price movement.In this issue, we offer some further analysis for the lack of demand for houses.
Admittedly, perhaps not many people look at how much cement is used in Spain, but it is an interesting indicator of construction. The present data has entries up to February 2015. As can be seen in the next chart, activity is not really picking up:
We are still very close to the low point of December 2013. As we have pointed out, even if there were all that demand for houses – which there isn't – there is still the problem of the glut of unsold houses.
Demand, which hit a staggering five million tonnes a month in 2007, has dwindled to below one million for the last few years, taking us back to before the boom period.
We can look as well at houses to be constructed.
As can be seen on the graph above, there is nothing in the pipeline to suggest that construction will be picking up any time soon. The statistics are available until January 2015 and the values are very low. Again, there is not much demand and the stock of unsold houses remains.
There is also a new trend among Spaniards: they are renting more than before. In the current economic situation after the housing boom ended and the ensuing prolonged period of astronomical unemployment – especially youth unemployment – most young Spaniards cannot afford to buy houses and do not have easy access to credit as before, as this has dried up after the boom, although there are some encouraging signs of this starting. There was also a large amount of personal debt and Spain went through a period of de-leveraging. Also, the idea that houses are a safe asset has been demystified after a very long period of declining prices. For all these reasons, Spaniards are now renting more housing than before. This is clearly detracting from demand which only adds to the lack of demand coming from the demographic trends.
We have said that the population in Spain is falling for various reasons such as the continual decline in the fertility rate, the end of the boom with its outflow of migrant workers and the exodus of young Spaniards due to the high unemployment rate. To add to this, there is still a decreasing foreign population in Spain as well, as there were 4,862,682 in July 2013 and 4,538,503 one year later, representing a decline of 6,7%. The decrease in new households being set up confirms this state of affairs, down by an enormous 82% since 2007.
So, looking at these factors of the declining population, the decrease in new households and the tendency of the Spanish to rent, there is clearly less of a demand for houses than before. This diminished demand comes against the backdrop of a very large stock of unsold houses, both old and new. In this context, the lack of price movement in the indices is comprehensible. Things can also change, however, if, for instance, Spain were to go through a period of high growth able to generate adequate employment, for the unemployment rate, while beginning to decline, is still stubbornly high. But the demographic trends are in place for a long time to come. And so far, there is not much to suggest things are changing.
Finally:
'The Andalucian Cat' by Buzz McIntyre and the Gloominati. Modest jazz piece with nice photos on YouTube.
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