• There is no damp or infestations
• The electrical installations are in perfect condition
• This place never gets flooded
• Taxes and maintenance costs are low
• It’s a quiet area
• They are going to build a golf course here
• Your sea view is safe

Valencia-based Bancaja, the savings bank in question, is desperate to shift some of the properties it now owns. By offering free mortgages it hopes buyers will be tempted to take many of those properties off its hands. The offer only applies to homes that belong to Bancaja or one of the developers it has financed, which is the key to understanding this promotion. It’s bad business for banks to be lending money for free, but if it means getting properties off the balance sheet, well, it might be a price worth paying.

If inflation picks up, as many expect it to, this offer represents a nice little discount for buyers. Assume inflation of 4% p.a: A loan of €200k would only worth around €177k in real terms after 3 years. Of course if they are using this promo to try and flog over-priced property then you wouldn’t be getting such a good deal after all.

For the time being at least, Spanish lenders are doing everything they can to avoid dropping their prices to where the market really is. Doing so would mean recognising losses on their loans, which they can’t afford to do. So, in the meantime, mortgages for free.

It’ll be interesting to see if any other Spanish lenders follow suit.

Like many projects that carry the Trump name, Newland is simply licensing The Donald’s brand. Widely believed to be the most expensive of the many new towers sprouting in Panama City, the Trump Ocean Club’s progress has been closely watched, amid concern the Panama City market is over heated.

Last year the Fitch Ratings service downgraded the project, due to “the significant deterioration in global real estate markets and an increase in liquidity risks associated with the timely payment of principal and interest on the notes.” Some analysts feared that some buyers would simply walk away from their deposits, but Newland reported only eight defaults. (Buyers are required to pay 30 percent during construction and 70 percent upon completion.)

The tower remains on schedule to open in August 2010, the developers say.

Not exactly words to whip up a market tornado. When Bank of England statistics released a few days later revealed a similar upward trend, CML’s Samter was quick to reiterate the council’s caution, noting the group sees “volatility” and down months ahead, “as the recovery is likely to be sporadic and shaky at first.”

The current move may be fueled primarily by high-end deals, Andrew Montlake of mortgage brokers Coreco told the Telegraph:

“This sector of the market tends to start moving first before slowly trickling down to the rest of the market as lenders are happier to lend to what they see as quality applicants with higher incomes and sizeable deposits.”

But he added: “There is still a big squeeze in terms of availability and competitive mortgage rates in the wider market despite buyer demand being strong.”

Villa Shamballa

Case in point is a modern villa on a hillside less than 1 mile from Monaco, which recently hit the market with a hefty price tag of 38.5 million euro.

On one-hand, the price for “Villa Shamballa” seems a bit steep, even for the Riviera. Sure, the estate covers 3,400 square meters and features 10 bedrooms, two pools, a guest house and the requisite “wine cave,” as detailed on the estate’s Web site. But that price range can buy a Versailles-style grand castle or a private island.

Nevertheless, this is the Riviera, so a potential buyer must consider the pedigree as much as the square footage. The house was built by retired real estate developer Jean-Claude Rahn and his wife Ursula Neuerberg, a member of the family behind German cigarette manufacturer Haus Neuerburg. Houseguests have included Prince Albert and Claudia Schiffer, according to a spokesman for the estate. (The ability to say “Claudia Schiffer slept here,” alone should add a few euro to the price.)

Beyond Claudia’s aura, the main draw is undoubtedly the location—a picturesque hillside covered with luxury estates, offering a 180 degree view of the Mediterranean. You can’t put a price on the Riviera, any agent will tell you. The villa is not far from Villa Leopolda, the Lily Safra estate which reportedly attracted a 500 million euro bid from a Russian oligarch last year.

The much-discussed price drew skeptical snickers from many in the industry. But it’s the French Riviera, so anything is possible.

-A commitment to leave 40 percent of the site as open space, including a 100-acre park styled after New York’s Central Park.

- A 25-km network of bicycle lanes.

- Charging stations for electric vehicles integrated into parking garage designs

- A centralized pneumatic waste collection system for wet and dry waste, eliminating the need for trash trucks.

- And, in what will certainly be a controversial stance, smoking is banned in public areas and office buildings.

Find the full list of features here.

But the listing really pushes the SmartHome features, which include “customizable color touch screens with wall, remote and desktop controls” in each room, plus invisible speakers, iPod docking stations and a programmable lighting system. And there’s also “his and hers baths with Kohler steam showers with a six-head jet system thermostatically controlled by Kohler’s DTV panels both inside and outside of the shower.”

You don’t need a fancy economic degree to figure out the reasons for the sea of empty homes. “Modest economic forecast and negative population growth estimates” are blamed for the surplus. In other words, the flow of overseas buyers has dried up for all those new, ground-breaking, one-of-a-kind developments.

If anything, the 31,000 number sounds light, considering the drop in demand. And that means, if Dubai is a true open market, prices should continue to fall, as well.

The latest report from Colliers International (available here) found prices dropped 48 percent from the second quarter of 2008.

Chris and Annie Stewart

Life in the Alpujarras of Andalucia was tough before he turned the experience into a series of bestselling books, explains best-selling author Chris Stewart, talking to Mark Stucklin of Housematix.

“Annie has only been stung once by a scorpion, though admitedly it was in bed” says best-selling author Chris Stewart, a smidgen defensively, about the home he shares with his wife in the Alpujarran mountains of Southern Spain. Scorpions might not loom large in most people’s idea of heaven, but they’re a fact of life in this part of rural Spain, where Stewart, 58, and his wife Ana, 53, from Horsham, in Sussex, are living their own idyll in the foothills of the Sierra Nevada mountain range, home to Spain’s highest mountain (and some of its best skiing).

Stewart isn’t just living the Spanish dream, he wrote the script; his books about life as an Englishman in rural Andalucia – Driving Over Lemons, A Parrot in the Pepper Tree, and The Almond Blossom Apreciation Society – have sold over a million copies in the UK, inspiring who knows how many Britons to try a new life in Spain. Stewart has done for Southern Spain what Peter Mayle did for Provence, though not everyone will thank him for it.

Ironically, the man who inspired Britons to go in search of a better life under the Spanish sun does not live amongst his fellow countrymen in the British ghettos of the Costa del Sol. “Places like Marbella and Puerto Banus are Sodom and Gomorrah to us,” says Stewart, who lives in one of the most isolated places in Spain.

Head inland towards Granda from the Costa del Sol, leaving behind the coast’s ugly developments and sweaty crowds, and you enter a different world of dramatic countryside and empty spaces as the snow-capped peaks of the Sierra Nevada come into view. In Spring it is lush with flowers and fragrant bushes, but for the rest of the year it can be quite desolate, which appeals to Stewart. “There is so little wild and savage terrain left in Europe, but we have got it here.”

The Stewart’s 70 hectare sheep farm, 68 of which are “savage terrain”, is about half an hour down a rough dirt track from the town of Órgiva, nestled in the fork between two rivers that gush with ice-cold snow melt in the Spring. Thanks to the rivers their farm, known as El Valero, is inaccessible by car for much of the year, and can only be reached by a rickety old footbridge. “Being on the wrong side of the river means that very few people come along this way ,” explains Stewart, who keeps an old jalopy on the house-side of the river to make life easier for them. “It’s a big part of what makes this place so special.”

Here the Stewarts live in what feels like their own secret garden, which they share with 7 cats, a dog, and a misanthropic parrot that inspired his book ‘A Parrot in the Pepper Tree’. “The parrot hates everyone except Annie, but especially me,” explains Stewart. Their 18 year old daughter Chloë, born 2 years after they arrived, has just left home to go to the University of Granda.

Annie with her misanthropic parrot

“You need fortitude, and a certain type of woman to live here,” says Stewart, who has slowly been improving the property since they arrived in 1988 as “refugees from Thatcher’s Britain.” They bought it off an ill-natured old peasant who then didn’t leave for months, providing Stewart with rich material for his amusing books on life amongst Alpujarran shepherds and weirdo expats. They have turned it into a model organic farm, where they are almost self sufficient. “Annie grows, I cook. Producing our own food is almost enough reward in itself.” says Stewart, who once did a french cooking course, and who seems to have done everything in life except don a suit and go to work in an office.

Ana has 4 kitchen gardens, where she grows everything from mangos and avocados to herbs for their salads. “We are members of an organic olive oil cooperative, so we are genuinely organic; no pesticides, and home-made compost,” explains Ana.

Their homestead is made up of 2 buildings built in traditional Alpujarran style where the previous owner used to live in squalid conditions with his livestock. They have turned one of the buildings into their living quarters, simple, but comfortable and charming, with a Moroccan touch to the decor. The other building contains guest rooms, utility rooms, the library, and “the erstwhile rat room”. “We didn’t always have seven cats,” explains Chris drily. “It’s not called the erstwhile rat room for nothing.”

Early on in their time at El Valero the Stewarts were given planning permission to do whatever they liked, so long as they respected local building and architectural traditions. Alpujarran houses are whitewashed affairs built on one level with thick stone walls and low, flat roofs, using natural material found close at hand like launa mud, esparto grass, and roof beams from eucalyptus trees. One feature that isn’t typical is a cupola they have built above the larder, just off the kitchen. “In a way, it is a return to the architectural roots of the region, as domes are part of Islamic architecture, and the Moors ruled here for hundreds of years,” Stewart says. “I can’t explain why, but it keeps the larder very cool.”

Working within those guidelines the Stewarts have gradually transformed the place from a rough peasant dwelling into a home with bags of character. For example, what used to be an filthy storeroom has been turned into a beautiful library, wall to wall with books, where a simple desk and chair stand infront of a window with a dramatic view of the valley below. Stewart worked on his books in this inspirational spot.

Down at the bottom of their lush and exotic garden is an ‘eco’ pool that appears to be Stewart’s pride and joy. It uses fresh water filtered by a series of pools containing plants that remove waste naturally, whilst the water is circulated by a huge water wheel driven by solar power. “We used to swim in the river, which was romantic in a way, except form the snakes, wasps, and horseflies. The pool is less romantic but much more pleasant, and once you have swum in it you’re done with chlorine pools for ever. It went over budget by 10,000 Euros, but it was worth it.”

Electricity comes from 4 large solar panels, and thanks to careful use the Stewarts live with all the mod cons save aircon. “We’ve become naturally parsimonious, and always switch everything off when we leave a room,” says Chris. “But we have all the electricity we need to run the food processor, bread baking machine, lights, computer, and music system.” Music is important to Chris, who was the original drummer for the band Genesis, and plays classical guitar.

Visitors to El Valero could be forgiven for thinking that life in the Alpujarras is a bed of roses, but the Stewart’s idylic life disguises a harsher reality. “Farming in this area is purely subsistence, and it’s not easy to make a living,” warns Chris, whose income as a best-selling author has made life much more comfortable than it was when he eeked out a living from farming, selling seeds gathered from wild flowers, and shearing sheep locally and as far afield as Sweden. “We would still be here without the books, but living very frugally,” says Annie, who worked as a sheperdess and horticulturalist before them moved to Spain.

So how do their fellow Britons living in the area make a living? “There seem to be quite a few alternative medicine types about, but I don’t know who the patients are,” says Annie. “There is a cannabis cup in the area every year, so there is some homegrown business, but it’s small time. Then there is renting out a cottage, which is getting more competitive. Most of all, people seem to finance their property purchases and lifestyle with vast profits from selling up in the UK.”

But property here is nothing like as cheap as it used to be, making this option harder. “Prices in the Alpujarras rocketed to ridiculous levels a few years ago, but people still paid them,” says Ana. “10 years ago a Dutch couple bought a farm over the river for less than 100,000 Euros, and sold it a few years ago for 600,000 Euros, having split it into 2 properties. Asking prices are still stupid, though I’m not sure anyone is paying them now.” 20 years ago, when the Stewarts bought, they paid 25,000 pounds for El Valero.

Stewart’s best known book Driving Over Lemons may be funny and inspiring, but it’s not a good instruction manual on how to go about buying property in Spain. “We did everyting wrong, but it turned out right,” admits Chris. “We bought in the most outrageous way without checking anything, and we bought on the ‘wrong’ side of the river, which turned out to be blessing. This place has brought us nothing but luck and joy.”

Not all those who have followed in his footsteps have been so lucky. Many have bought what turned out to be illegal properties, and are now living with the threat of fines or demolition. To help forget their sorrows they should read Stewart’s latest book ‘Three Ways to Capsize a Boat’, a hilarious and uplifting account of Stewart’s life at sea before moving to Spain.

And what advice does Chris have for anyone thinking about buying property in rural Andalucia? “Stay in the area for a year before you buy. Live through all the seasons, get to know the people, and get to know about water. In this part of the world the 3 rules for buying are not ‘location, location, location, but ‘water, water, water.”

Beautifying the Spanish coast

It has always amazed me how little outcry there has been in the Spanish press and society about the depraved goings on in the Spanish property market, and Spain’s uniquely grotesque town planning model, especially in the Valencian Region, home to the Costa Blanca (and some of the most venal politicians on earth).

I was interested to read an article in the Spanish daily La Vanguardia that offered some sort of explanation.

Referring to the horror of speculation and over-development that has been the main dish of Spain’s coastal building boom in the last decade, the author, Susana Quadrado, in an article entitled ‘Requiem to the Coast’, asks “why have we not heard a squeak from anyone? Where are the intellectuals, the town planners, the architects, the naturalists, the politicians, and the citizens who protested against these aberrations in the ‘80s?”

One answer is offered by a Valencian friend of hers. “Everyone here has gotten rich quickly and easily. But nobody is blind. There is a sense of collective guilt, but it is covered in a blanket of silence.

So, whilst everyone was making money, nobody complained about the monstrous way that Spain has been built in recent years. An old story.