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Spain and Portugal have suffered one of their worst droughts on record this summer, with consequences from empty swimming pools for the tourist to economic disaster for farmers losing their crops and livestock.

Roger Munns, Managing Director of Tribune Properties, predicts that property prices in the two European countries could drop as much as fifteen per cent in some areas as more owners decide to put their villas and apartments on the market.

‘For many owners of second homes the original motivation to buy was to have somewhere they could spend time in a relaxing environment. Coupled with the thought of a good investment for the future, the market for overseas homes from buyers in the UK, Germany and Scandanavia has really taken off in the last twenty five years.

But soaring temperatures and a strain on the water supply could have consequences for their rental returns next year, which many owners rely on to meet their overseas mortgage.

Many holidaymakers want to rent a villa with a pool - but the attraction soon goes if the pool is empty. Some golf courses are having to cut down on watering their greens too, and it won’t take a big fall in tourism to mean the difference between breaking even and not being able to meet the mortgage commitments for some overseas property owners.

This autumn could see more properties than usual being put on the market, with a consequential fall in prices’.

Early warning signs of a potential fall in property prices have already been seen on the Spanish Mediterranean island of Menorca, which has enjoyed better rainfall this year than the Spanish mainland and no water restrictions, but some villas being cut in price by over ten per cent.

Water restrictions on the mainland are having an impact on potential villa buyers, with many questioning the value of a swimming pool when they might not be able to use it.

Portugal has recently asked Spain for 6 million Euros in compensation, as water levels in the River Douro which runs through both countries fell below limits established in a bilateral agreement,with Portugal coming close to accusing her neighbour of stealing her water.

Good Time to Buy

‘For anyone considering buying a property in Portugal or Spain, this September and October could be the ideal time to buy’, say Tribune Properties. ‘Unusually many properties were being reduced in price in August, traditionally a good month for sales.

We normally see villa and apartment prices being dropped mid September onwards when the tourists and potential buyers are thinner on the ground as some owners are keen to sell and don’t want to wait until the following Easter before having a real chance of selling again.’

The drought isn’t the sole cause of property prices falling add Tribune Properties, saying it has accelerated price falls and come on top of an already poor year for many estate agents in Europe.

‘A good barometer for European property are the tax havens of Monaco and Andorra which don’t rely on ‘tourist’ buyers, but usually have a steady supply of buyers interested in taking advantage of the zero income tax rate. Andorra is in the Pyrenees and has no water supply problem - but estate agents were twiddling their thumbs this summer waiting for buyers to show - and they didn’t.

Monaco similarly has had no water supply problems, but has also seen a lack of buyers. The tourists are still visiting the Principality and hotels in Monaco and Monte Carlo have been as busy as ever, but again there is a lack of serious property buyers, and negative property inflation is quite possible in Monaco this year for the first time in a decade.

With more property available on the market we would suggest buyers draw up a list of three or four villas they have viewed and liked, and then suggesting to the owners that they would consider buying at fifteen per cent below the advertised asking price to see which ones are prepared to consider it.’

Sea Water

One possible answer to secure the long term tourist trade and consequential property market is to follow Malta’s example of building desaliniation plants, converting sea water to drinking water, sometimes known as ‘reverse osmosis’.

The Mediterranean island competes with Portugal and Spain for the attention of second home buyers, and has a healthy tourist industry - despite having no rivers and low rainfall, allowing the island to function normally even in drought conditions.

The water from this source can be used for agriculture and ensuring adequate reserves to fight forest fires for example - it might just be the answer too for the swimming pools and golf courses - and would allow a plentiful supply of high quality for domestic use.

For details of hotels in Monaco, Monaco’s weather, a map of Monaco, the Grand Prix and direct contact details for the Hotel de Paris, Columbus Hotel and others visit http://www.yourmonaco.com

For property and real estate in Malta http://www.maltaproperty.info and for Andorra property http://www.propertyandorra.com

Tags: Andorra property, Monaco Grand Prix, Monaco Hotel, Monaco Map, Monaco weather, Monte Carlo HotelAndorra property, Monaco Grand Prix, Monaco Hotel, Monaco Map, Monaco weather, Monte Carlo Hotel

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The annual yacht show in Monaco always guarantees Europe’s second smallest country’s hotels are full, and this year will be no exception.

The show has grown in popularity over the fifteen years since it began, and this year will see Monaco’s Port Hercules play host to over ninety of the world’s finest yachts and five hundred of the world’s best yachting companies.

The luxury yachting market has tripled in the last eight years, and helped along by orders from Russia’s ‘nouveau riche’, the industry has seen an increase in orders of over a quarter in the last year alone.

But while luxury and Monaco are often associated, poor sales and a possible drop in property prices haven’t been seen in the Prinicpality’s real estate sector for over a decade.

Monaco Real Estate

In contrast to the highly successful Yacht Show, property sales in Monaco have been unusually slow in 2005. Although only a square mile in size there are over a hundred estate agencies battling for buyers to choose their services, and at times it seems that every third or fourth retail unit has been commandeered by a property company in Monte Carlo, the best known and most sought after area of Monaco.

According to Monte Carlo property specialist Henri Boulanger some estate agents are being squeezed, and are viewing the yacht show as the last opportunity to turn a dismal year into a good one.

‘The yacht show attracts a wealthy clientele in considerable numbers, and the type of person who might be buying a luxury yacht might well be thinking about buying a property in Monaco as well.

While it wouldn’t be etiquette to actively pursue buyers, many estate agents in Monaco are desperately hoping to see their doors open and for one or two potential buyers to call into their offices.

With good two bedroom apartments starting at over a million Euros, and penthouses with Mediterranean views often over five million and some of them over ten million, it can take just one sale to turn a bad year into a good one.’

Monaco’s property price inflation has often risen by over ten per cent a year in the last decade, but a combination of events have conspired this year with a possible stagnation in prices for 2005, and potentially even a fall.

The passing earlier this year of the popular Prince Rainier, Europe’s longest reigning monarch, cast a cloud over the area which it is just emerging from, but economic factors have also played a significant role in the downturn of the real estate market.

‘The strength of the Euro against the American dollar has led many of our potential buyers from the US to delay their viewing visit from this year to next, and earlier this year another source of important buyers from the UK held back until after the election to see what the outcome would be’, explains Henri, adding ‘and now with the uncertainty of the economy after the recent tragedy of Hurricane Katrina it is quite possible that some US buyers will delay their visit even more, or possibly to cancel buying in Monaco altogether’.

Monaco Grand Prix

No surprise then that while the tourists will be in Monaco in the same and possibly increased numbers than last year, the prospect of several dozen potential property buyers descending upon Monaco and staying in her best hotels over a few days is seen as an opportunity not to be missed by the realtors.

But what is surprising perhaps is that the Yacht Show is viewed as a better opportunity than the Monaco Grand Prix for her realtors.

‘The Grand Prix attracts tens of thousands of people to Monaco every May’, explains Henri, ‘And every April we get a lot of new enquiries for property in Monaco, with the buyers asking to view apartments in Monte Carlo with views of the race circuit during the Monaco Grand Prix weekend. But what they don’t realise is that many of the apartments for sale have been rented out for the weekend, and viewing is impossible.

Even if an apartment hasn’t been rented out for corporate hospitality it would take all day to get from one apartment to another. The Grand Prix is a great tourist event for Monaco, and some of the estate agents go away for a few days. They won’t be doing that during the Yacht Show!’

The fifteenth annual Monaco Yacht Show is being held this year from September 21 to 24. Full details can be found at www.monacoyachtshow.com
and Monaco hotel details
http://www.yourmonaco.com/hotels

For a guide including a Monaco map, Monaco weather, direct contact details for hotels in Monaco including the Hotel de Paris and Columbus hotels and the Monaco Grand Prix can be found at
yourmonaco.com

Tags: European property, Monaco Grand Prix, Monaco Hotel, Monaco Map, Monaco weather, real estateEuropean property, Monaco Grand Prix, Monaco Hotel, Monaco Map, Monaco weather, real estate

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