16 November 2015 – Cinco Días
On Friday, the property registrars published their real estate statistics for the third quarter of the year. According to the figures, prepared using data obtained from operations recorded in the registries, the changing trend in house prices that began in 2014 continued to strengthen during Q3 2015. The Index of Repeat Sales House Prices (based on the Case & Shiller methodology applied in Spain) recorded a QoQ increase of 2.2%. In the last year, prices have increased by 6.6%. The rate of growth in recent quarters is continuing to abate the cumulative decline recorded since the peak levels of 2007, which now amounts to 28.4% on average.
One of the explanations behind the price rises is the trend in house sales. During the third quarter, the registrars recorded 92,786 operations in total, which represents the highest volume in the last ten quarters, and an increase of 6.4% compared with the second quarter. It also represents an increase of 16.6% compared with the same period in 2014.
“The cumulative YoY data for the third quarter confirms this positive trend, showing that during the last twelve months, 348,388 operations have been recorded, i.e. 13,255 operations more than the cumulative annual volume as of the second quarter 2015”, said the College of Registrars in a statement.
As usual, the distinction between new and second-hand homes explains this positive trend: there were 18,017 operations involving new homes, which represents a new historical minimum, with a decrease of 2.5% compared with the previous quarter. Meanwhile, there were 74,769 transactions involving second-hand homes, which represents a QoQ increase of 8.8%.
Purchases by foreigners
Each quarter, the registrars’ statistics analyse what is happening in terms of demand for homes by foreigners, however it does not differentiate between residents and non-residents. In any case, the operations closed by foreign citizens continued increasing in terms of their relative weight, to account for 13.5% of all house purchases in Q3 2015, above the 12.8% recorded in Q2, which means that foreigners made 12,000 more purchases in Q3.
By nationality, the British, who account for more than 23% of all purchases made by foreigners, are the clear leaders of this ranking. They are followed by the French (who accounted for 8.7% of all operations), the Germans (6.4%), the Swiss (6.4%) and the Belgians (5.5%). The Russians have dropped to ninth place in the ranking, accounting for just 3.4% of all purchases and confirming once again the downwards trend seen in previous quarters.
(…). In terms of new mortgages, the average amount loaned per home equals €109,744, which represents a QoQ increase of 2.09%. In the last year, this figure has increased by 4.6%, to record six consecutive quarters of increases.
Mortgage terms (durations) are also moderating, given that during the third quarter, the average term decreased from 23 years to 22 years and nine months.
On the basis of this data, the College of Registrars estimates that new borrowers are paying an average mortgage instalment of €531.86 per month, i.e. 0.02% less than in the previous quarter, which indicates, according to the experts, that access to housing is stabilising at optimal levels in terms of risk. In fact, this instalment amount represents 28.12% of wages, below the 33% threshold that the Bank of Spain considers is the optimal risk level for households when it comes to borrowing.
Original story: Cinco Días (by Raquel Díaz Guijarro)
Translation: Carmel Drake