19 December 2016 – La Vanguardia
After nine years away, since the financial crisis first started to crush the real estate bubble in 2007, cranes have returned to form part of the Spanish landscape during 2016, They are a visible sign of the recovery that the real estate sector has been enjoying since 2014.
With just a few weeks to go before the end of the year, real estate investment is on track to set a new record in 2016, of almost €14,000 million, thanks to large-scale operations such as the merger of two giants in the sector, Merlin and Metrovacesa, to create the largest real estate company in Spain, with assets worth more than €9,300 million.
This year, the growth of the economy, improvement in employment, low interest rates, return of financing and the continuous inflow of foreign capital have combined to allow the real estate sector to consolidate its recovery despite the political uncertainty that hung over Spain for most of the year.
After almost a decade of paralysis, the property developers that survived the crisis and others created more recently have set cranes up on the streets, especially in cities with the most economic and tourism activity, where the “stock” is now practically non-existent and demand for new homes a reality.
Quabit is planning to invest €470 million between now and 2020 on the purchase of urban land on which it will build more than 3,000 homes; and Neinor Homes has set itself the objective of launching around 40 new developments this year and selling more than 1,500 homes.
The newly formed company Dospuntos, controlled by the US fund Värde Partners, plans to invest €2,000 million over the next six years and complete 2,000 homes per year from 2019 onwards. Vía Célere has just bought the largest available plot of land in the centre of Madrid from Repsol and Adif, which is ready for the construction of homes.
Inveravante, owned by the business man Manuel Jové, and the real estate subsidiary of BBVA, have joined forces to promote 850 homes; the German investment fund Aquila Capital and Ónice will spend €100 million building luxury homes in La Moreleja; whilst Ibosa will invest another €30 million converting the Hotel Foxá M-30 into homes.
The recovery of the sector is undeniable. According to the notaries, house purchases grew by 10.3% in September, a percentage that rises to 13.2% according to INE, after registering eight consecutive months of increases and growth of 10% in terms of the signing of mortgages for house purchases.
The Ministry of Development calculates that prices rose by 1.6% during the third quarter, to complete 6 consecutive quarters of increases, whilst permits for the construction of new homes soared by 32% in September to reach figures not seen since 2011.
Moreover, house purchases by foreigners grew by 19.7% during the first half of the year, with Britons leading the ranking, despite the threat of “Brexit”. (…).
During 2017, the number of transactions is expected to grow by 6.5% and prices are forecast to rise by 3.5% to reach 2004 levels. Meanwhile, Tinsa estimates that prices will remain stable or will increase by between 1% and 2%, at most, during 2017, in line with forecasts for the end of this year. (…).
Original story: La Vanguardia (by Cora Serrano)
Translation: Carmel Drake