Spanish Property Up 12% for SIPPs 1st Year

(by Kevin Barnett, 08 Oct 2005)

Three leading Spanish banks are now forecasting property price growth of 12 percent for 2006, the key year for the second homes sector due to new tax changes in the UK that allow self invested pensions to put their money in sunbelt homes.

Spain is likely to get the lion's share of the extra £billions of pension money when the new SIPPs (self invested personal pensions) start in April 2006. Spanish banks are gearing themselves to provide special low interest SIPPs mortgages and developers offering Sipps-safe homes in favourite Costas.

The latest bank equity growth forecast has come from Caixa Catalunya, reporting that the country's economy “remains sturdy” and, supported by strong buying trends from Spanish families, they see house price inflation of 16 percent to the end of 2005 followed by a fall to 12 or 13 percent through 2006.

That's in line with current levels and matches CAM Bank and Caja Murcia forecasts of 12 percent for 2005 (currently nearer 16%) and 12 percent growth for 2006. Both banks are big investors in Spanish real estate developments and mortgage providers to Spanish and foreign buyers. They are members of the newly-formed SIPPs in Spain organisation, with PropertyInSpain.Net, Travelex, Spanish lawyers, leading developers and property valuers.

DEVELOPERS AGREE ON HOMES MARKET

Jose Ivars, of SIPPs in Spain developers, Blauverd said: “We plan to launch the first SIPPs friendly development shortly - at prices below the current forecast levels. Already there are many signed up buyers through the SIPPs in Spain grouping. If the SIPP pension is getting 12 percent growth a year, this has got to be one of the best returns in many years."

Spanish developer Grupo Lar Sol managing director, Chus de Miguel confirmed: "Prices are continuing to rise, but at a much slower rate than in previous years."

SIPPs in Spain, spokesman, Alberto Linares said: “Our research with pension providers indicates that SIPPs holders will be happy with a return below that being forecast by the Spanish banks. Spain is able to combine economic security and unlimited tourism lettings potential for the SIPPs homes with a better than average investment return.”

Spanish housing minister, Maria Antonia Trujillo claims her department's policies are successfully taking the edge off the property investment boom to ensure there is no sharp bump later on. The Spanish government is committed to building more social housing and stimulating the rental market to slow price inflation.

SIPPs in Spain membership includes 50 Spanish banks, UK SIPPs providers, five leading developers, TINSA, the national valuers chain, top insurance company Ocaso, PropertyInSpain.Net, MortgagesInSpain.Net and Travelex, the biggest currency firm and Siemens Smart Homes.

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