17/10/2014 – El Confidencial
From around 60.000 surplus properties in 2009, the Community of Madrid is set to pressure the volume to less than 12.000 by the end of 2015. This means an absorption of 80% of the stock within 6 years.
Spain as a whole will also stand tall in terms of drainage. From having exceeded the number of 900.000 unsold units in 2010, 2015 will close at 563.000 properties, or 40% less. The data has been provided by the 21st Edition of Real Estate Heart Rate Monitor (XXI Edición del Pulsímetro Inmobiliario) elaborated by MAR Real Estate in cooperation with the Institute of Business Practice (Instituto de Práctica Empresarial or IPE) and the Spanish Realtors Association (Red Nacional de Asesores Inmobiliarios Cualificados or RAIC).
According to the report, ‘it is a sustainable growth scenario, housing means an investment opportunity to some savers, especially if low returns on other alternative options considered’.
Likewise, the study indicates that small savers are shifting their deposits on housing, amounts ranging from €100.000 to €500.000, focusing on Madrid, Barcelona and the coast, where two thirds of transactions are sealed in cash, while nationally the number posts 25%. The figure has doubled since the beginning of the recession.
The IPE’s Real Estate Institute director Jose Antonio Perez states that foreigners are beyond the shrinking volume of surplus stock. ‘Non-residents buy more and more, led by the British, the French, Germans, Belgians, Scandinavians, Russians and the Chinese who come to Madrid and some coastal areas. Spain regains its attractiveness thanks to the sun, the cuisine, the entertainment and the infrastructure. And in order to enjoy all that, square meters are a must’, he adds.
In fact, it is expected that sales in Madrid’s Community will reach 47.000 units in 2015. Better performance will trigger re-valuation of Spanish homes which will cost around €192.000 on average. To compare, last year the mean showed €174.000 per unit, while in 2012 – €200.200.
In Madrid only, the number of transactions is predicted to hit 29.200 deals, surpassing the 2008 and 2009 levels.
Turn in Tendency
Additionally, the report states that a change in tendency in the real estate sector has been proven by official statistics. All in all, the study bases on them. Thus, the market saw an increase in sales – BBVA puts it down to improvement in unemployment rate -, new construction reactivation and a delicate rebound in housing prices, especially clear in big cities like Madrid where in some areas the product falls short.
‘The vicious circle has become the virtuous circle. The downward tendency broke with an exception for several cities and zones where recovery will arrive late‘, says Daniel Sanz, architect and the head of Madrid office of MAR Real Estate.
‘This is the moment to select best homes at best prices in neighborhoods like Chamberi or the center in general, where currently deals, prices and demand, above all for rehabilitation projects, are at their heights. These areas have not only overcome the crisis but they begin the new cycle with almost inexistent surplus’, the specialist explains.
Original article: El Confidencial (by E. Sanz)
Translation: AURA REE