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residential Market News: Spanish Real Estate Intelligence

Aedas Revolutionises the Property Development Sector by Building 500 Turnkey Homes for Ares

12 April 2019 - El Confidencial

Aedas Homes has decided to launch a new line of business by building complete housing developments for other companies. In this way, the listed property developer hopes to generate value from its production over-capacity; it anticipates recording revenues of around €70 million from the initiative.

In this vein, the company led by David Martínez has reached an agreement with the fund Ares to build 500 homes in its name in three different locations: Torrejón de Ardoz, Alcalá de Henares and El Cañaveral (all in Madrid).

This is the largest turnkey project in the sector since the outbreak of the real estate crisis, a decade ago and as such, represents a real milestone.

The three largest listed property developers in Spain, Neinor, Aedas and Metrovacesa, are all living by the famous mantra “reinvent yourself or die”. As such, they are expanding their operations as they seek to actually generate the high turnover figures that they promised when they made their stock market debuts.

With this latest announcement, Aedas is sending a clear message to its competitors. It has over-capacity in its production model, which means that it can handle turnkey projects on a large scale, as well as deliver the roadmap that it is already committed to.

With the additional 500 homes from this project, Aedas Homes could end the year with more than 3,000 units launched, compared with the 2,580 initially planned for the year.

Meanwhile, Ares Capital is immersed in its commitment to the Spanish real estate market, with a particular focus on the residential segment, with homes both for sale and for rent.

Original story: El Confidencial (by Ruth Ugalde)

Translation/Summary: Carmel Drake

 
Bank of Spain Warns of Mismatch Between Housing Supply and Demand

11 April 2019 - El Confidencial

According to the Bank of Spain, there is a mismatch between the homes that buyers are demanding and those that are available for sale. Indeed, that is one of the main conclusions of the latest report published by the supervisory body entitled the “Recent evolution of the housing market in Spain”.

According to the report, one of the key characteristics of the Spanish property market is its high degree of heterogeneity by region, type of home (new and second-hand) and buyer nationality. “The characteristics of the homes demanded do not necessarily match with the available supply, in certain places, and may differ in terms of size, quality and location”.

In addition, the Bank of Spain warns about the difficulties that young people are facing when it comes to affording a home, as a result of their precarious working conditions. Their situation is further compounded by changes made in recent years regarding tax breaks (the removal of them) for buying a home and the growth of the rental sector.

The Bank’s analysis focuses on Madrid and Barcelona, which are both very close to the peaks of the boom in terms of rental prices. Meanwhile, house prices are currently around their 2006 levels.

Nevertheless, according to the report, it does now seem easier to obtain a mortgage or at least one with more favourable terms for the borrower. Interest rates have decreased and lending periods (mortgage terms) have increased. Approval criteria and general financing conditions have also been relaxed.

Original story: El Confidencial (by E.S.)

Translation/Summary: Carmel Drake

 
Les Rivages to Invest €12M in 55 Luxury Homes in Almuñécar

10 April 2019 - Eje Prime

The French property developer Les Rivages is planning to invest €12 million in the construction of 55 beachfront homes in Almuñécar (Granada). The building work will begin after the summer and the homes, which will each have between 2 and 3 bedrooms (one will have 4 bedrooms) and a terrace spanning between 30m2 and 40m2, are expected to be ready within less than a year.

This represents Les Rivages’s first venture outside of Estepona (Málaga) and the company specialising in luxury coastal second homes is reportedly planning more projects in the area.

The French firm made its Spanish debut in Estepona in 2015 with the construction of 12 luxury beachfront apartments in the Guadalobón area, which had sales prices of between €1 million and €1.3 million.

Original story: Eje Prime (by Marta Casado Pla)

Translation/Summary: Carmel Drake