6 October 2016 – El Mundo
Some of the main players in the real estate and finance sector, such as Sareb and CaixaBank, have commented that the recovery that will take place in the housing sector over the next few years will be “selective”. They call for “caution” because the “wounds” of the last decade “are still healing”.
That was one of the conclusions to emerge from the panel debate about financing in the real estate sector at the National Conference of the Association of Property Developers and Constructors in Spain (APCE), which is currently being attended by 400 professionals in Madrid (5 and 6 October).
The Chairman of Sareb, Jaime Echegoyen, has confirmed that although the recovery in the real estate sector is still “selective”, we are seeing “favourable signs that indicate that it is here to stay”. Echegoyen described the current situation in the real estate market as a “sweet moment” thanks to the “favourable factors” at play, such as low interest rates, the professionalization of the sector and growing demand, which is why he highlighted that “it seems like the real estate recovery will last”.
We are doing everything right between us, we have learned the lessons of the past and we are benefitting well from economic growth”, said the Chairman of the bad bank, who added that it is “a reflection of the past and of what we hope for the future”.
Nevertheless, Echegoyen encouraged the sector to work to avoid repeating the erroneous actions of the past, without falling into the trap of financing innovations and, he asked that players “exert caution and a watchful eye”, given that “low interest rates have helped a lot, but they may not last for long”.
In the same vein, the Director General of CaixaBank, Juan Antonio Alcaraz, said that “the wounds are still healing” and he pointed out that entities are still recording a “steady decline” in their mortgage loans to individuals, as they are not “able” to replenish them. Moreover, he criticised the new regulatory standards, such as the code of good practice for the sector, which “have profoundly changed the rules of the game in terms of the relationship between banks and borrowers”, and contributed to the decrease of the loan book.
Nevertheless, Alcaraz clarified that mortgages to individuals are rising at a rate of 50%, but from historical lows, and he explained that we are currently seeing a change in the way that mortgages are granted, with more importance being given to people’s borrowing capacity and to interest rates.
In terms of financing, he warned that the new online platforms that facilitate financing may mean that a time comes when “we tear our hair out”, just like in the past, when it comes to the “problem of regulating” these sources of financing.
In this sense, Alcaraz referred to the impact of changes such as the introduction of floor clauses and the suspension of evictions, which means that legal uncertainty sits at the top of the list of factors that may harm the sector, followed by regulatory and digital issues. (…).
Original story: El Mundo
Translation: Carmel Drake