The real estate sector is now at a turning point as the housing prices slow their slump but the foundations of economy, such as situation on laboral market or credit granting, both factors that regulate demand, creep forward without any improvement.
In this context, only 28% of 250 top executives who took part in the research ‘Tendencias 2014’ (2014 Tendencies) by CB Richard Ellis, reckon the housing prices would reach the rock bottom level in 2014. The respondents who expect further depreciation say that they will be smaller than of 10%.
What is more, 60% of all participants is afraid that it will take more time for recovery to arrive. The same number is prone to say that Sareb´s activity will pull the prices down or at least stabilize them.
The real estate consultant firm reminds that in 2013 almost half of the sector expected drop-offs in housing prices but the results of the latest report indicate that “the residential is stretching”.
Another approach to the results shows that one in every four respondents thinks that in 2014 about 175.000 new houses will be started. (…). Housing refurbishment will be the strongest residential locomotive this year, as 40% claim.
After all, offices will still be the main investment target in 2014. So think 37% of the surveyed people who declare interest in this sort of assets (in 2013 their percentage was 33%). When it comes to retail, from 22% believing in it a year before, their group rose to 25%. Only about 19% of the respondents would gamble on the residential market, similarly in 2013. Those investors expect a rise in GDP in medium-term, pulling behind reduction in unemployment and boost in consume, so that the office´ and trade premises´rent could go up in 5 years.
At the report presentation conference press chairman of CBRE Valuation Advisory, Javier Kindelan, explained that the fixed preferences among the investors are set in a moment of “recovery” in overall Spanish real estate market. This could also improve investment in hotel (10% of the surveyed) and industrial (9%) sectors. In case of hotels the five-star and low-cost investment would prevail.
In turn, CB Richard Ellis reckons that the entrance of the great international investors on the market has been essencial for enhancing liquidity and opening the door for institutional ones who are still frightened by the risk.
Thus, according to the report, the year 2014 will watch mostly those funds on the property stage (50% of the respondents, the same opinion shared 67% in 2013), occasionally accompanied by family offices (from 6% last year to 12% of opinions this year). (…).
Enrique Martínez-Laguna from CBRE España points out that foreign funds could contirbute to Spanish economy revival if they improved asset value for post-sales with higher yield to more stable investors.
He also believes that in 2014 transfers of large asset lots from financial entites to servicers will increase, although their size might be reduced due to the fact that asset management has got a little profitability margin and it may increase only in case of great volume.
Moreover, he highlights that 2014 will host more Asian investors, especially from China (…) and South America.
Translation: AURA REE