Homes Worth Less Than €100K Experience Highest Price Rises

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

Second-hand Housing Is More Appealing To Buyers

23 February 2015 – El País

62% of the homes purchased in Spain last year were second-hand.

The second-hand segment is winning by a landslide in the race to sell more homes in the Spanish real estate sector. Overall, sales increased in 2014 for the first time in four years – breaking the trend observed since 2010 – and they did so thanks to the used home segment.

62.7% (200,065) of the 318,928 homes sold in 2014 were second-hand and just 37.2% (118,863) were new builds, according to the statistics of the Association of Registrars. According to INE, sales of second-hand homes increased by 18.4%. By contrast, sales of new builds plummeted, falling by 16.9%.

All indicators suggest that second-hand homes will continue to dominate transactions throughout 2015. Thus, the gap between new and used housing will become increasingly larger. Why? The main factor tipping the balance is price; second-home homes are more affordable for the long-suffering buyer. Used homes are between 5% and 15% cheaper, according to Manueal Gandarias, Director of the Research Unit at In euros, “the difference between an average used home and an average new build in Spain amounts to approximately €400 per square metre”, according to calculations by the appraisal firm Tinsa.

Second-hand properties ended the year with an average price of €1,347 per square metre, whereas new builds stood at €1,624/m2, according to data published by the General Council of Notaries. Moreover, second hand properties are available for as little as “just over €1,021. This undoubtedly encourages future buyers”, says Chus de Miguel, Commercial Director at

Furthermore, the prices of used homes offer more room for negotiation when they are in private hands, especially for overvalued homes acquired during the bonanza years.

Another point in favour of second-hand properties is that they are taxed at a lower rate. Brand new properties are subject to a 10% VAT charge, whereas Property Transfer Tax (Impuesto de Transmisiones Patrimoniales or ITP) is levied on those that are already inhabited and it varies from 6% to 10%. Moreover, aside from a few exceptions, used homes are located in better areas, since new homes are often scarce in city centres, unless they are refurbished homes. “A high percentage of used homes are located in more established, central areas that have more services”, says Chus de Miguel.

Although new builds have a very important advantage: “the greater ease of financing offered by the developers and banks that own these homes”, says Jesús Duque, Vice President of Alfa Inmobiliaria. Loans are normally granted to the developer in the case of new builds, which may be subrogated to the potential buyer. And financial institutions offer more credit facilities to place their own products, be they new or used. The individual vendor is disadvantaged in this sense.

In terms of the state of the property, new homes are ready to move into and live in, whereas used homes may require the buyer to invest in a face-lift or comprehensive renovation. “Our clients prefer to buy a house in a good building, update it or renovate it to their taste and pay 20% less than they would pay for a new build”, says Fernando Sánchez, agent at Re/Max Urbe. And he continues “problems should not arise if the property has a favourable Technical Building Inspection (report), is energy efficient and has good insulation”.

Regardless of tastes, is it worth paying more for a brand new home? “If we are talking about the same area and similar characteristics in terms of a property, I do not think it is worth paying 10% or 20% more for a new home”, says Duque.

Before signing any agreements, experts advise that (potential buyers) perform a simulation of the annual costs that will result from the purchase. As well as of the monthly costs. One should appreciate that “new builds typically charge higher community fees (to cover the cost of swimming pools, gardens, sports facilities…) and that it is possible to find second-hand homes where the central heating and water costs are included”, say sources at

The fact that the second-hand segment is driving the reactivation of the real estate market is also explained by the fact that there is more supply. And “because the new builds sold by banks are also classified as second-hand”, say experts at Much of the stock held by banks is classified as ‘used’ even though it is actually brand new, because they are homes that they have absorbed from developers in exchange for the payment of debt.

And whilst the second-hand market is growing, the new build segment is contracting; it is plummeting because hardly any new homes have been constructed in Spain in recent years. It is true that the construction of new homes is now increasing, albeit at a very slow rate. By 2016, the panorama will have changed. Bankinter estimates that, after years of significant decreases, driven by low demand and developer paralysis, sales of new builds will return to a level close to 100,000 units by 2016 (with total sales amounting to 450,000).

Original story: El País (by Sandra López Letón)

Translation: Carmel Drake

Housing: Rental Yields Now Exceed 5%

3 February 2015 – El País

Property has become a safe haven again for savers and retirees.

Rental properties offer returns of between 5% and 7%. After almost seven years of falling prices, credit constraints and low yields on bank deposits, property “has become a safe haven again for savers and retirees” said Jesús Duque, Vice-President of Alfa Inmobiliaria.

Buy-to-lets have become a good investment option once more, as they provide much higher returns than those offered by financial institutions. Furthermore, prices continue to fall, although that trend is now slowing. The price of second-hand homes in Spain decreased by 0.1% during the month of January to reach €1,592 per square metre, according to the latest real estate price index published by Idealista. The year-on-year decrease was 5.1%. Nevertheless, the outlook is set to change as prices in five autonomous regions (Murcia, Valencia, Cataluña, Madrid and the Balearic Islands) increased.

To generate income, one cannot buy just any house. When looking to invest, one should focus on homes that have permanent demand, i.e. those with a central location. The most stable investments are properties located in middle class neighbourhoods, since they have risk-reward relationships that offer more stability over the long-term.

“It is much more worthwhile to invest in a neighbourhood in any city, rather than in a house on the beach, where the possibility of renting is usually limited to the summer months”, explains Duque. The greater the rate of rotation, the lower the profit. Several months may pass between tenants during which time the owner receives no income and also has to upgrade and repair the property. “Whenever possible, if you are looking for a stable investment, you should try to rent out your property for long periods”, said the expert.

Family homes amd those with space for at least two adults are better than one-person studios, for one-income households. And, almost more importantly, you must ensure that the rent will be collected and that it will cover the investment. This can be done through an objective analysis of the tenant’s ability to pay, but can also be supplemented by non-payment protection insurance, which although decreases the profitability of the operation, does provide security.

One should keep in mind that from the expected yield of 5% to 7%, an owner should deduct 1% to cover the payment of IBI, community costs, garbage collection, insurance and the repair and maintenance of the property.

Original story: El País (by Sandra López Letón)

Translation: Carmel Drake

Alfa Inmobiliaria’s Branch Network Grew By 4% In 2014

20 January 2015 – El Mundo

Alfa opens 12 new estate agencies in Spain and seven overseas.

Madrid and Valencia are the regions with the highest demand for new real estate agencies.

Alfa Inmobiliaria has announced that its estate agent network grew by 4% in terms of office numbers in 2014. The chain has 184 agencies, of which 108 are located in Spain and 66 overseas.

The new offices are mainly located in Madrid and Valencia, the areas in which demand for housing has increased over the past year. Jesús Duque, Vice President of the Company, says that “the sector has began its recovery. 2014 was the first year of net growth in terms of office numbers since 2009”.

Currently, Alfa Inmobiliaria employs 265 workers in Spain across its office network. Alfa Inmobiliaria provides real estate “packs” to self-employed people looking to start a business; the packs include 35,000 homes, both for sale and for rent, a methodology for working, the support of the brand and the ability to agree joint operations to facilitate work.

In this way, the company facilitates the entry into the business of any entrepreneur willing to risk the minimum capital, supplying him/her with all of the knowledge and tools necessary. And, when the time comes, Alfa supports his/her transfer to an office. The franchisee him/herself determines the speed of each step, which may vary depending on previous experience and the business skills acquired, but he/she will always be supported by the team at Alfa Inmobiliaria.

Original story: El Mundo

Translation: Carmel Drake