La Generalitat Approves a Law that Provides for the Expropriation of Vacant Homes

5 March 2019 – La Vanguardia

The Government of Cataluña has approved a decree law establishing around thirty urgent measures to improve access to housing in the region.

The objective of the law is three-fold: to address the lack of social housing available for rent; to facilitate instruments to combat emergency situations and evictions; and to moderate increases in residential rental prices.

The measures range from fines to the expropriation of homes that have been empty for two years (from large property owners at a reduced price, which is no case may exceed 50% of the market price), to forcing the banks to rehouse in social housing properties any residents that they choose to evict.

Another measure in the pipeline, for introduction later this year, includes a plan to increase the minimum rental term, which currently stands at three years, to increase it to between six and ten years, depending on whether the owner is a private individual or a real estate company. Moreover, efforts are being made to limit rental price increases to CPI.

Original story: La Vanguardia (by Luis B. García)

Summary/Translation: Carmel Drake

The PSOE Proposes that Town Halls Buy Homes to Rent Them Out

21 February 2019 – Eje Prime

The PSOE wants to create a public stock of rental homes, with reference prices, which will end up affecting market prices. To this end, in its framework program for the municipal elections to be held on 26 May, the party led by Pedro Sánchez is proposing that Town Halls purchase (already built) homes for rental, although without considering those that come from evictions executed by the banks.

The text reflects the “absolute priority” of creating a public rental stock that is “sufficiently large” with which to develop active policies that facilitate access to housing for citizens and which “affect the prices in the rental market”, according to reports from Europa Press (…).

In terms of public subsidies for the rental sector, the socialists propose taking into account the different life needs of each cohort, such as young people who want to buy their first home and older people who are looking for family consolidation projects. Similarly, they foresee the creation of a stock of rental homes for young people (…).

Original story: Eje Prime 

Translation: Carmel Drake

Ministry of Development to Promote 5,000+ Rental Homes for Less than €400

19 November 2018 – La Razón

The Minister of Development, José Luis Ábalos, has announced that his Ministry is going to transfer €21.5 million to the Public Land Management Company (‘Entidad Pública Empresarial de Suelo’ or Sepes) to promote the construction of more than 5,000 social housing rental homes, which will cost no more than €400 in Madrid, Barcelona, Valencia, Sevilla, Ibiza and Málaga.

At the Europa Press Informative Breakfast, the leader of the Ministry of Development said that the creation of these 5,000 homes, together with the 1,500 already included in the State Housing Plan, would account for almost one third of the 20,000 homes recently promised in Congress.

Specifically, Ábalos said during his appearance in the Lower House that the Ministry is going to promote a stock of 20,000 public homes for rental over the next four to six years with the aim of increasing the supply of such homes and helping to stop their rising prices.

For Ábalos, these measures lay the foundations for a housing policy that aims to guarantee access to housing. Nevertheless, he said that he is aware that this task, together with the protection of access to housing, will require the assistance of all of the administrations and political forces. For that reason, he urged that a “major agreement from the State for housing in Spain” be reached.

Decapitalising the stock of social housing

In this vein, he confirmed that the stock of social housing has been decapitalised to an affordable price and pointed out that this represents only 2.5% of the housing stock in Spain and that is “one of the lowest rates” in the European Union.

“Access to housing is a total headache for the middle and working classes and merely a pipe-dream for young people”, he added, after indicating that spending on housing by Spaniards living in rental properties is “well above the European average”, which is generating “a situation that cannot be permitted”.

During his speech, the Minister made it clear that recovering talent, raising the Minimum Inter-professional Wage (SMI), providing more wage stability and increasing pensions “are the right proposals to provide stability for Spain”.

He also said that work is being performed on long-term measures to increase the supply and recover the stock of homes, although he pointed out that work is also being carried out in the short term to modify the Urban Rental Law (LAU) to “limit guarantees” and give tenants more stability, and on the Civil Procedure Law (…).

The Royal Decree for Housing: due before the end of the year

When asked about when the Royal Decree that integrates the package of measures announced at the beginning of the legislature is going to come into force, Ábalos confirmed that the plan is for it to be approved before the end of the year because, in his opinion, “some of the measures are urgent and we need to get on with them”. In this way, he said that the real estate market in Spain is “reaching breaking point”.

In this vein, he said that “in Madrid, there are a lot of people who share flats because they do not have any other choice and all of that affects the minimum life project”. “What we are doing is not going to have a direct or immediate effect, but the urgency is vital in cities such as Madrid and Barcelona”, he said.

Original story: La Razón 

Translation: Carmel Drake

ST: House Prices Rose By 2.5% In 2016

4 April 2017 – El Mundo

The average price of housing in Spain experienced an average annual increase of 2.5%, to reach €1,469/m2, according to the Real Estate Sector Trend Report from ST Sociedad de Tasación. In the second half of 2016 alone, house prices rose by 1.5%. Despite this YoY increase, the average salary required to acquire a home remained stable at 7.4 years.

According to Juan Fernández-Aceytuno, Director General of the appraisal company, “the positive variation experienced over the last 18 months confirms the recovery that we have been predicting since 2015”. “Nevertheless”, he clarified, “the average behaviour of prices is not the same across every province”.

In this way, by province, Barcelona experienced an annual increase of 5.5%, followed by the Balearic Islands, with an increase of 4.6% and Madrid, 4.4%. By contrast, Teruel with a reduction of -2.1% and Álava with a fall of -1.6% experienced the highest price decreases, followed by Pontevedra (-1.4%), Zamora (-1.3%) and Burgos (-1.1%).

By autonomous region, the price of new and second-hand homes are still decreasing in some areas, led by Asturias with a decrease of -0.5%, followed by La Rioja (-0.4%) and Castilla y León (-0.3%). Meanwhile, Cataluña (4.8%), the Balearic Islands (4.6%), Madrid (4.4%) and Melilla (3.3%) recorded the highest annual increases.

7.4 years of salary to buy a home

ST Sociedad de Tasación’s Real Estate Effort Index, which defines the number of years of full pay that an average citizen needs to buy an average home, did not change, remaining stable at 7.4 years in the first quarter of 2017.

The Balearic Islands continued to be the region where it takes the longest to acquire a home (14.4 years), although that figure has decreased with respect to 2016. By contrast, La Rioja is the region where it is easiest to access housing (4.9 years), followed by Murcia, where it takes 5.1 years of full pay to buy a home.

Meanwhile, the Accessibility Index prepared by ST Sociedad de Tasación reflects a slight improvement at the state level for the third consecutive quarter. Based on a benchmark of 100 points for those cases in which the capacity for indebtedness is sufficient, the average level in Spain in the first quarter of 2017 amounted to 107 points, three points above the level in the previous quarter. The state average remained above the minimum salary level for the acquisition of an average home for the fifth consecutive quarter.

By autonomous region, Madrid, Cataluña and the Balearic Islands continued to register insufficient levels for the acquisition of a home, with Cantabria moving into positive territory.

Confidence increases in the real estate sector

ST Sociedad de Tasación’s Real Estate Confidence Index continued its upward trend during the first quarter of 2017, registering an increase of 0.9 points, to reach 55.4 points, out of a total of 100. The index hit its lowest ever value in December 2012, at 30.6 points.

By autonomous region, La Rioja exceeds sixty points, with 60.2, followed by Madrid (58.4) and the Balearic Islands (57.6), which reported the highest confidence indices. By contrast, Castilla y León (50.7), País Vasco (51) and Murcia (51.2) recorded the lowest levels.

Original story: El Mundo

Translation: Carmel Drake

Community Of Madrid Will Buy Homes From Banks For Social Housing Stock

22 November 2016 – El Mundo

Next year, the regional government of Madrid, led by Cristina Cifuentes, will spend €10 million buying homes in the free market to incorporate them into the stock owned by the Social Housing Agency – the new Ivima. “We hope to buy properties from Sareb and other financial institutions with significant “stock””, said the Community of Madrid’s Minister for Transport, Infrastructure and Housing, Pedro Rollán (pictured above, right).

According to his calculations, it currently takes around six months for the autonomous Administration to hand over the keys to a social housing property to a claimant (…). The collapse of the real estate market means that the cost of constructing a new social housing property through the Public Administration and the cost of development by a private property developer is almost the same.

“We want to acquire around 60 or 70 homes, depending on the final price. The idea is to take advantage of the exceptional circumstances that we are facing at the moment, to facilitate access to housing for people who need it, as quickly as possible”, he said. (…).

Agreements with Bankia and La Caixa

Despite the sale of almost 3,000 homes to an overseas investment fund, the Social Housing Agency owns a significant real estate stock, comprising 23,690 properties of which, approximately 300 are free market properties “which are being repaired or which belong to the Emergency Social Housing Plan. In other words, they are reserved for use by citizens in the event of a catastrophe or emergency”, said a spokesperson for the regional government.

The regional government has been in conversations with Bankia and La Caixa since the beginning of its term in office to try to reach an agreement about the use of this housing stock, which cannot be put on the market.

“This is the first time that the Community of Madrid is going to undertake an operation of this kind”, said a regional spokesperson. Previous regional governments put in place measures to facilitate citizens’ access to housing, but none of them went this far.

Nevertheless, the Socialist spokesman for Housing, Daniel Viondi, does not share the Minister’s enthusiasm. (…). The parliament member says that the Minister has not specified “how many homes there are going to be, where they will be located or how much they will cost, and furthermore, there won’t be any regional budgets available until at least March”. (…).

“Cifuentes is turning the Community of Madrid into an estate agent. It costs more to buy such properties than build them from scratch and she is missing out on the opportunity to create thousands of jobs and to give the construction sector the boost it needs. For every €1 million invested in public housing, economic activity amounting to €6 million is generated”, he said, according to his data. (…).

Original story: El Mundo (by Jaime G. Treceño)

Translation: Carmel Drake