Spain’s National Institute of Statistics show a fall in mortgage approvals for Lanzorote during the first quarter of 2008, Lanzarote property prices are starting to soften and the housing market has now become a buyers market.
For over a decade property on this small speck of Spain, located just 62 miles off the coast of Africa, has been a hot favourite with overseas investors. As this enviable geographical location creates a clement year round climate that draws tourists in droves. Whilst providing owners of holiday properties with a reliable year round rental income.
Despite the credit crunch and the weakening pound visitor numbers to Lanzarote are in fact up by 8.7% so far this year. With British tourists leading the way. But now, property prices on the island look set to start heading in the opposite direction – as mortgage approvals in the province of Las Palmas, of which Lanzarote is part, have fallen by nearly 36% during the first quarter of 2008.
This reflects the fact that local banks – as elsewhere around the world – have started to tighten their lending criteria. Affecting many British based buyers who have traditionally taken out mortgages on the island in order to take advantage of the more favourable interest rates available within the Euro zone.
At the same time, vendors have also been squeezed – as banks have also started to impose more realistic valuations – so effectively helping to drive prices down.
As a result, all of Lanzarote´s largest estate agencies are now starting to list a growing quantity of price reduced property. With some offering discounts of up to nearly €250,000 on larger luxury villas.
According to Nick Ball of leading Lanzarote property portal, Lanzarote Guidebook; “Property prices on the island are now definitely starting to soften. Despite the fact that tourism, which drives the property market, is still as robust as ever. We list over 2300 properties across the island and a growing proportion of these have now been reduced in price. Creating the ideal conditions for buyers in search of a genuine bargain.”
source: www.lanzaroteguidebook.com
