27/06/2014 – Expansion
Areas close to the coasts have watched housing fever during the real estate bubble growth, later on followed by the wiping-out burst. As usual in the sector, improvement does not come up equal in all places, varying at the city and even the district level.
In its “Costa Española 2014″ (“Spanish Coast 2014”) report, leading appraisal company Tinsa stated that “there are promising signs of more vivid developer activity in occasional consolidated areas”. The study analyzed data obtained from the real estate market in 100 coastal cities.
Referring to “occasional” areas, the firm means mainly Costa del Sol and Costa Blanca where “both prices and permits number increased depending on location and asset type”.
Moreover, Tinsa explains that “even thought new construction remains halted in general, the shoreline of, for example, Alicante has observed rise in building permits issues”. The phenomenon is right now extremely difficult to find in Spain.
Across-the-board, Tinsa spots “stabilization” in values, above all in the aforementioned areas (Malaga stands out), as well as in the beach zones of Levante and Catalonia where residential assets already creep towards the bottom, while the slump continues in Cadiz, Huelva and Tarragona.
According to Tinsa, the Mediterranean Coast accumulates a 47.7% drop-off since the maximum levels in 2007, almost by 8 bps more than in the rest of the country. “The Canary Islands have overcome the recession best”.
Coastal municipalities where the home depreciation hit the most acutely are Casares (Malaga) with nearly 60%, Pineda de Mar and Mataro (both in Barcelona) with 57.2% and 52.2% respectively. On the other side, Barbate (-26.7%), A Coruña (-28.3%) and Manacor (-28.6%) registed the slighest declines in property values.
Weighting the tendency up in annual terms, prices advanced in Marbella (Malaga 4.8%), Sant Feliu de Guixols (Girona, 2.5%), Las Palmas de Gran Canaria (1.5%) and Manilva (Malaga, 1.3%).
Speaking of the foreign purchase, Tinsa points out that “Russians and the buyers from the Central and Eastern Europe prevail when it comes to holiday accommodation, inclining towards luxury products, principally on the coasts of Catalonia and Malaga”.
At this point, it is worth to mention that in 2013 expats carried out over 35% of all purchases in Alicante, Gerona, the Balearic Islands, Santa Cruz de Tenerife and Malaga.
In the first quarter of 2014, foreigners bought the most property in Tarragona (51%), Santa Cruz de Tenerife (44%) and Malaga (38%).
The report also informs that the sale term extended significantly over the past 12 months in great majority of the localizations. However, gradually the time necessary for selling a property shrinks, mainly due to bargain prices slashed by banks, involuntary holders of the stock for sale.
Overally, Tinsa claims the housing values will keep falling until the end of the year and since 2015 a new stage of sector recovery will begin.
Íñigo Valenzuela, Marketing Director at Tinsa predicts the “positive” data we are observing nowadays will lead to an absolute “zero” at the end of 2014.
Original article: Expansión (by Juanma Lamet)
Translation: AURA REE