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...remember to say you saw it in the SOL TIMES
SOLTIMES FEBRUARY 2010
Sales: 950 430 820 email: sales@soltimes.com
UK Jobless Data Worse Than Expected Market Commentary 17th February 2010 UK Jobless claims were up 23,500 against the expectation of a fall of 10,000 so not good feedback for the employment sector. This data for January was disappointing but not wholly unexpected and simply reinforces the fact that the employment sector remains very sluggish. Although we may have officially exited the recession in the UK on paper the reality is that they still have a long a painful road ahead. The official unemployment rate remains at 7.8%. In addition to the employment data we also had the minutes from the February interest rate meeting for the UK. The BoE minutes came in 9-0 as expected to keep interest rates and Quantative Easing on hold. Although all members voted to leave the size of the asset purchase programme unchangedit was noted that some members felt the arguments for a further increase were “finely balanced”. This underlies the uncertainty within the Monetary Policy Committee on the future impact of the £200 billion already introduced and therefore the MPC will not close the door on further QE if required. Sterling is likely to remain subdued as the BoE feel that inflation will fall further in 2010
and further expansion of QE is a weapon that they will use again if necessary. So to Greece and yesterday it was agreed to give the government time to co-ordinate their future policy on their budget. However there was a clear tone of anger from the EU for the shocking handling of their finances to date and they have until the end of March to come up with some answers. The EU also stripped Greece of its voting rights at next months meeting in an attempt to demonstrate their anger towards Greece. So although no firm agenda or plan in place the markets have started to feel more comfortable or possibly bored with the affairs in Greece and investors once again started to dip their toes in again. The USD and the JPY weakened in line with a tentative return to risk. GBP/USD pushed back through 1.57 and tested 1.58 in early trading and EUR/USD pushed through 1.37. The contents of this report are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. Currencies Direct cannot be held responsible for any loss or damages arising from any action taken following consideration of this information. Information provided by Currencies Direct, leading providers of foreign exchange. Call to find out how we can help you get the best rates and save your transfer fees. Contact the Mojácar office on 950 478 914 or 0871 218 5001 from the UK or email almeria@currenciesdirect.com
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UK and Spain technically out of recession but growth in the economy is still very negligible. In fact, fresh data released only this week confirmed fears that the eurozone economy stagnated in the last quarter of 2009. This week (11/02) an emergency summit of EU leaders and finance ministers has taken place to discuss the woes in the market caused by worries over the Greek economy and the country’s huge budget deficit. EU leader’s response to the Greek debt crisis failed to impress financial markets. In fact most analysts concluded that the united response was lukewarm to say the least as it has not addressed the underlying problem. The consensus is that it has done very little to calm those fears. The eurozone leaders decline to rescue Greece from sovereign default, if it needed be, paved the way for speculators to round on the euro taking it to a nine month low against the dollar at 1.3606 on the morning after the summit. Also, the buck does not stop in Greece as a handful of debt-ridden eurozone countries are facing financial difficulties, albeit not as severe as the Greece. Analysts have termed these are the PIGS or PIIGS as there is a 5th country that has shown vulnerability in their economy. Portugal, Ireland, Greece, Spain and Italy all have huge budget deficits and a slack economy. What does the above mean for the property market here in Spain? Well, this is a very interesting question and despite the market fever, a fall in the single currency is not a bad thing at all as the euro is seen by most analysts as overvalued anyway and any loss in value that the euro experiences will help to boost exports from the eurozone. From a British point of view: for some time now an undervalued sterling or overvalued euro (whichever way you want to look at it) coupled with the slowdown in the UK economy as a whole has stopped some British buyers from coming out of their comfort zone and investing in Spain. On the other hand, the same factors have allowed British owners of properties in Spain to sell their investment or holiday homes at very attractive prices without losing too much in their target currency i.e. less euros can now buy more sterling and so on. Is this now set to change with the euro being perceived as overvalued? In my opinion, the sterling will not gain many inroads against the euro, at least not this year, as the British economy is not in good shape either (in fact it is in a terrible state!), and in a year of election, there is simply too much uncertainty in the UK economy to warranty a rally from investors / speculators to back the sterling. Also the Bank of England is not set to imminently raise the Bank of England base rate from the historically low of 0.5%.
With property prices in Spain at all time low, the choice for those with capital or access to finance has now become even clearer. Buy now and take advantage of very low property prices in Spain. Bricks and mortar is not just a safe investment but also an investment that you and your family and friends can take pleasure from. Historically, properties always outperform other type of investments in the long term. The fact that one can buy now cheaply only makes the argument to buy now even stronger. This penthouse apartment on Puerto Marina, Mojacar Playa is a great example of a bargain property where the vendor has decided to slash the asking price for this 1-bed / 1-bath property with stunning sea views and put it on the market for a very competitive price of 90,000 Euros. More details on our website www.veritashomes. co.uk under ref. 1264.
The example above highlights only one property but we have many others on our books that are being offered for sale at a massive discount. This of course is the reason why here at Veritas Homes we are being so successfully in shifting properties around. If you have a quality property that you wish to sell at a realistic price in today’s market then please get in touch with us. As I have been saying all along the reason for the increase in property sales is a culmination of several factors including of course price. Our message to both sellers and buyers remains unchanged: The outlook is good, the climate is great and at Veritas Homes we want to help you buy or sell in Spain and to give you something to smile about. So, when the temptation is to wallow in doom and gloom, to moan about the weather or the economy and the weak sterling, or anything else that is upsetting you; remember that you, only you, can make it happen.
Those wanting to discuss about any of the issues raised in this article please pop into the Veritas Homes office on the square just before the Hotel Puntazo and Rohha Lifestyle between Sunflower and Viva Restaurant or e-mail André at andre@veritashomes.co.uk By André dos Santos