15 March 2016 – El Mundo
One in every four properties brokered by the Alfa Inmobiliaria network, which has more than 200 agencies operating across Spain and Latin America, does not exceed €100,000 in terms of price. And those homes are precisely the properties that are increasing by the most in terms of price, as well as the ones that are being sold the fastest.
According to the real estate chain, one hundred thousand euros is the maximum amount that many Spaniards are willing to pay nowadays for a home to rent out. “The high yield that these homes offer is generating an increase in the price of this type of home”, says Jesús Duque, the Vice-President of Alfa Inmobiliaria. “That, and the fact that it is cheaper for buyers to purchase a home of this kind to rent. Nevertheless, there are significant differences between what a resident in Madrid or Barcelona can find versus what is available in other cities”.
“This psychological barrier seems to have instilled itself in the minds of buyers, which together with demand from investors”, says Duque, “is what is generating a higher increase in prices – of approximately 10% p.a., and, as a result, faster-closing operations”.
And regardless of whether the home is to live in or is an investment property, “this price bracket is where we are seeing the highest price rises”, says Duque.
The other feature of these operations is that the people making these purchases tend to be small-time savers and individuals who are moving out of home for the first time or buying their first home, and in many cases, they are not resorting to bank financing. “Almost 40% of buyers – and/or their families – have the savings necessary to finance the acquisition outright, which means that these operations are being closed within very short timeframes”, says Duque.
The US housing market has grown by 11%, with respect to the first month of 2015, according to The National Association of Realtors.
In Spain, we expect to see a similar evolution, says Duque. Despite the slow down in the world ecnomy, the housing market is emerging from the situation of paralysis that it underwent during the worst years of the crisis. Just like in the US, we expect to see an increase, not only in the number of operations, but also in house prices”, says Duque.
Original story: El Mundo
Translation: Carmel Drake