Tuesday, November 24, 2009

Andalucian announced 1 billion Euro to boost property market

The Junta de Andalucia, The government of Andalucia recently announced a subsidy of 1 billion Euros to help liquidate the regions excess properties in the region estimated at around 70,000 newly-built homes.

According to Kyero.com, the plan applies to local residents living in Andalucia including International residents who pay tax in Andalucia and the maximum mortgage is €245,000 and only applies to newly built properties. Moreover, the Participating banks will lend 100% interest for first 3 years and from years 4 to 8, the Junta de Andalucia will subsidize the mortgage payments and at the end of year 8 the subsidy will be added to the loan.

The way it works is the Developers must put there properties in at least 20% discount but most importantly at mortgage cost so the Junta wont be helping the developers make a profit but just help clearing the stock. Mortgages must be 100% loan to value and 30 years with a maximum interest rate of 1% over Euribor and buyers will save as much as 40% over 8 years, according to calculations by the Junta.

Industry analysts believe that the Andalusia housing market in general will benefit and hopefully take a large amount of the excess stock of the market. They suggested that foreigners - including Britons - could profit as a result of a rise in prices being stimulated in the area by the measure.