Resort Group News Current Affairs |
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| Financial Independence for Young Spaniards? - 2nd May 2008 Prohibitive housing costs and inflexible financing opportunities make it increasingly difficult for young people in Spain to move out of their parents' homes. Spanish institutions are considering unusually aggressive techniques to address the situation. It's getting harder and harder for young people in Spain to leave their parents behind and purchase a first home; a financial move that requires over 50 per cent of their income, according to a recent study. This percentage peaks in Madrid, where over 70 per cent of a young person's salary is needed to buy a home, and meets its lowest point in Extremadura at just over 30 per cent. These dismal figures, along with an increase in housing costs of 130 per cent between 1995 and 2005, have led to proposed legislative changes that aim to facilitate the access of youth and other disempowered groups to the housing market. Growing sales of residential and vacation homes (spurred by the continuing expansion of the Spanish market and increases in employment) along with a large influx of foreign immigrants, has led to a situation where inadequate financing conditions make it difficult for young people to purchase a home without entering into almost life-long debt. A considerable number of empty homes that cannot be re-introduced into the market also present an obstacle to those wishing to buy a first home. The Bank of Spain has announced that more aggressive measures will have to be taken in order to solve the current situation. Giving impetus to the rental market and increasing the number of government-sponsored homes for people of limited financial means are a few of the suggested solutions. On a larger scale, the Bank proposes implementing changes in the legal system that will allow for more speedy real estate related trials, and plans on revising aspects of Spanish law that block the entrance of empty homes into the rental market. The Consejo de Juventud de España, a youth advocacy group with support at local and national levels, has demanded the creation of a series of public housing complexes that would require no more than 20 per cent of a person's total income, enabling people with modest salaries to move out of their parents' homes at an earlier age than is currently achievable. Ultimately, organisations like the Bank of Spain and the CJE aim to make it possible for the youth in Spain to participate in the same level of financial independence enjoyed by young people in countries such as the US, where the expense of renting or buying a home and owning a vehicle is not as prohibitive. |
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| Low cost carriers see rise in passenger numbers - 10th April 2008 In contrast to a fall in the proportion of passengers taking chartered flights, the number opting for cheap flights is growing. While EasyJet saw passenger numbers rise by almost 17% in April (to 2.8million over the same month last year), only 13.4% of overall passengers flew on UK charter carriers (or about 34.9million) - representing a decrease of two million compared to 2004 and a 20 year low. EasyJet's total revenue in the 12 months ending April 2006 was also up by more than 20% to £1,468 million (passengers carried rose by 14% in the 12 months to more than 31 million). This rise in interest is supported by a recent web poll by Hitwise to find the most popular search item. While 'ebay' remained the most popular search term in the four week period (0.7% of all search terms), Easyjet was the most searched for airline - followed by Ryanair and British Airways. Across the travel sector, the top 20 search terms were: easyjet, ryanair, cheap flights, expedia, british airways, thomas cook, travel insurance, easy jet, travelodge, flights, national express, cheap holidays, ryan air, bmi baby, thomson holidays, flybe, bmi, lastminute.com, bmibaby. The latest figures from the Civil Aviation Authority (CAA) suggest that the stories are inter-connected - with the demise of the traditional package holiday and more flexible travelers opting for budget airlines. CAA figures also show that the proportion of passengers at UK airports flying on UK scheduled airlines reached 50.5% in 2005 - an increase of 7.3 million passengers on 2004. Another significant finding was a major rise in the use of regional airports - with Liverpool (up by 32% or 1.1 million passengers) and Bristol (up by 13% or 0.6 million passengers) the most popular. Over the last 10 years terminal passenger numbers at regional airports have doubled from 47 million in 1995 to 95 million in 2005. A CAA spokesman remarked that this rise in overall passenger numbers wasn't due to more people flying, "but that more people are flying more frequently." |
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| Romania presents a 'property trap' for agents and buyers - 8th March 2008 The latest in a growing line of maturing East European economies promising high growth, could Romania be the market that finally exposes the shortcomings of the 'get rich quick' property markets? Identified as the number one property hotspot by TV's A Place in the Sun in its recent top 20, Romania has gained in profile substantially over the last few months. Still negotiating with the EU for full accession in 2007, it has benefited from association with more established CEE markets like Bulgaria and Croatia which are also in membership talks. However, as more agents and investor buyers search this market for prospects, there are several key issues they should be aware of. Writing in the Bucharest Daily News, tax specialist Raymond Breden highlights a number of property pitfalls that foreign buyers should consider - from earthquakes (five tremors in Bucharest in the last 18 months of around 5 on the Richter scale) to disputed title. In an article entitled 'The property trap in Romania: think before you buy!' the tax director from KPMG Romania urges buyers to find out whether the land or property is actually owned by the vendor: "Incredible though it may seem there is still no reliable third party agency whereby you can check ownership with any degree of certainty. In the UK, for example, you can look at the Land Registry and see who is the registered owner (sic). In Romania, there is the concept of a Land Registry but it cannot be relied upon as absolute proof of ownership." Breden highlights an issue arising from the 1960s when land was confiscated by the Ceausescu regime. While it has been handed back since then, the law of succession is complex (mainly because owners have since died and so a new owner must be identified). "You have to trace back the ownership pre-confiscation, identify the heirs of that person and see whether the property was returned to the rightful heirs," writes Breden. "This is all very difficult to prove, particularly as this is not registered in the Land Registry." Law of the land A new law concerning the acquisition of land rights by foreign private individuals has been published in the Romanian Official Gazette (on 14th November 2005), but it will only enter into force when Romania joins the EU (due for 1st January 2007). Under these proposals, EU citizens will be able to own agricultural and forest land in Romania only seven years after Romania's accession to the EU and five years after for those looking to open offices. Non-EU citizens will have to wait until after this delay. A recent anti-speculation law also has implications for foreign buyers. For any land acquired after 1st January 1990, the seller must pay a tax of 10% applicable to the tax base - which is calculated by subtracting the base value of the subject land from the sale price (the base value of the land is calculated as the acquisition price multiplied by 5%). Tax rates, and the tax basis for real estate transactions, will be subject to an amended fiscal code. The tax rate will be set at 2% applicable to the tax base (determined as the transfer price in the case of a sale-purchase agreement involving land). A move toward anti-speculation suggests that Romania has learned from neighbours like Bulgaria and Croatia but, again, these are issues that broadly speculative investor buyers should be aware of. Role of the agent Another potential trap is unscrupulous agents or developers selling land that has a claim on it by a 'purported heir', but no public record of the fact. A buyer could later find themselves 'squatting' effectively on someone else's property. The situation in Northern Cyprus is a good indicator of the problems that can arise and pioneering agents should be just as wary as buyers of chasing 'fool's gold'. |
