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Although the year started buoyantly world property and financial circumstances have definitely had an effect on some sectors of the property market in Tenerife.

The main factors that effected the market were:

• Fear of a collapsing world property market following the US crisis

• Rising interest rates in the UK and Europe

• Uncertainty caused by the run on the Northern Rock BS

• The inevitable collapse of property prices in certain parts of Spain

• A reduction in average disposable income in the UK

• Recovery of less predictable investments, i.e shares and pensions

Whilst it would be true to say that the circumstances above have slowed down our rate of enquiries for property in Tenerife and the increases in property value have slowed considerably there have still been some pockets of above average performance.

The best performing investments have been in the older holiday complexes that are being sold into private ownership by timeshare and property companies and subsequently modernised.

The best deals this year with the highest growth potential and performance have been in Atalaya Court; Laguna Park and MareVerde. In general, good holiday property suitable for the short term rental market is still in demand as there are no more holiday complexes being built.

The real slow down in demand was seen in the residential sector with many 'off plan' investments coming to completion as news of the US property crisis broke. Coupled with the continual rise in UK Mortgage Rates squeezing domestic buying power several new properties remained unsold after completion.

We are pleased to report that the market and our enquiry rate is showing signs of steady recovery although buyers are now looking predominantly for the real bargains which are still getting bought as quickly as they appear on the market. It is still possible to buy well located studios requiring refurbishing for under £60,000 but these deals are getting few and far between.

The interest rates are starting to fall again in the UK and we look forward to seeing renewed growth within 2008.

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