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Over 3,500 Empty Houses on Lanzarote

Friday May 10, 2013

Over 3,500 Empty Houses on Lanzarote

Five years after the construction boom came to an end, there are hundreds of uninhabited properties in areas such as Arrecife and Playa Blanca, with no likelihood of the market recovering in the near future.

The Spanish estate agents Remax Cony have just confirmed that they had their best year in some time during 2012, with 148 sales in total. This doesn’t quite reach the 190 sales they made in 2006, but does constitute a much higher level of activity than in the three previous years. The director of the company on Lanzarote, Juan Antonio Peña, also said that whilst there weren´t many people who could afford a house purchase at the moment, those who could were able to secure properties at 40% to 50% less than the 2007 price.

He also revealed that the majority of buyers at present were either island residents or people from the Spanish mainland, suggesting that the foreign buyers´ market is still somewhat subdued.

Arrecife and Playa Blanca are the two areas that have seen prices fall the most, with 1,500 unsold properties in the island capital and over 2,000 in Playa Blanca. There is also the likelihood that prices will continue to fall in these urban zones over the next couple of years. In contrast, the tourist town of Costa Teguise still has latent demand, as very few developments went into construction without being sold. Available plots in Puerto del Carmen are also holding their own in relation to pre-crash prices, as short supply of building land in the town continues to keep prices buoyant.

And in some areas of the island, prices have even risen over the last few years, with the bungalows at Famara cited as one of the main areas where demand has strengthened sales prices. Puerto Calero is another location that has seen little decline in asking prices, due to the sparse number of properties for sale in the enclave and the high quality of those that do go onto the market. The same effect is also true for rural properties, with no falls in prices in general.

Juan Antonio blames the banking sector´s entry into the market as property owners as one of the main reasons for steep declines in prices in towns such as Playa Blanca. These financial institutions create a distortion in the normal workings of the real estate market, especially as they are able to offer the best mortgage conditions for the properties they wish to sell, compared with other properties for sale in the same location.

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