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Strategies & Market Trends : Zeev's Turnips - No Politics
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To: DlphcOracl who wrote (13438)12/14/2001 10:07:12 AM
From: Steve Lee  Read Replies (1) of 99280
 
Regarding the disposal of "dirty money" held in pre-euro currencies. Appreciation of beachside properties in Europe, especially Spain/Canary Islands has been partially attributed to this. Crims have been buying up properties with cash with little regard for valuation. I was in the market for a beachside property in Tenerife 18 mths ago and was looking at £80,000 (about $112,000) for a 3 bed apt. The price has since doubled.

Of course there are many factors that can affect property prices but I believe the dirty cash theory for two reasons:

1) Rental income from the property is more or less the same as it was 18 mths ago. The rental yield is about 12% on holiday lets. This is very very low for short term rents. When the yield was double 18 mths ago I decided the yield was too low to buy it.

2) The cost of undeveloped land has not kept pace with the price of properties.
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