Tinsa & Sociedad de Tasación are the Banks’ Preferred Appraisal Companies

17 May 2018 – Expansión

Last year, the banks commissioned appraisals for properties worth €200 billion. The valuation of these assets was performed by a well-nourished group of entities that have been authorised by the Bank of Spain to undertake these types of operations.

Tinsa and Sociedad de Tasación swept the board in this sector, with market shares of 28.7% and 13.9%, respectively, according to the total revenues for the sector for 2017, which amounted to €284 million, according to data from AEV, the main trade association.

The appraisal sector was particularly badly hit by the consequences of the real estate crisis, given that their valuations, which in some cases did not reflect the reality, contributed to the inflation of the real estate bubble which then burst.

The appraisals performed last year represent one third of those recorded in 2007 when the figure reached €600 billion according to data from the Bank of Spain.

There was also a lack of professionalism in this sector, on which the Bank of Spain has imposed several sanctions in recent years, in some cases on firms that have now disappeared.

More control

Following the crisis, the banks also liquidated their own appraisal companies and, since then, independence and professionalism have reigned.

“The Bank of Spain has increased its control over the sector in the last three years, something that is good news and that works in our favour”, says Juan Fernández-Aceytuno, CEO at Sociedad de Tasación. By way of example, he comments that the supervisor now “requires us to provide 350 information fields for every appraisal”. (…).

In another change, Santander commissioned its appraisals from half a dozen different companies last year, namely: Tinsa, Eurovaloraciones, Ibertasa, Tasaciones Hipotecarias, Krata and Hispania de Tasaciones.

The group explains in its accounts for last year that its strategy, when it comes to choosing these entities, is governed by “the requirements of independence, neutrality and credibility to not undermine the reliability of their valuations” (…).

BBVA works with fifteen appraisal companies including Tinsa and Sociedad de Tasación. The bank confirms that it engages these entities due to “their reputation, independence and recognition in the market, given that they are capable of providing valuations that most appropriately reflect the reality of the market in each region” (…).

Bankia is the entity that engaged the fewest appraisal companies in 2017. It hired Tinsa, Gesvalt, Tecnitasa, UVE and Arco Valoraciones. Sabadell, by contrast, reports in its accounts for last year that it worked with around 30 firms.

Original story: Expansión (by E. del Pozo)

Translation: Carmel Drake

Tinsa: House Prices Fell by 1.7% in Barcelona & Rose by 4.5% in Madrid in Q4

30 December 2017 – Expansión

The real estate market is continuing on the path to recovery, but it has encountered an unexpected obstacle: “the process” (‘el procés’ in Catalan). In fact, the instability generated by the independentist challenge in Cataluña caused a slow down in the rate of growth that had been seen in both Cataluña and Barcelona until September, when the Catalan capital was leading the reactivation of the sector.

The path that Madrid and Barcelona had been following together diverged in the last quarter of 2017 when house prices in Barcelona decreased by 1.7% compared to the previous quarter, whilst in the Spanish capital, they rose by 4.5%, according to the Local Markets Index compiled by the appraisal company Tinsa. That figure represents the first decrease in the Catalan capital since Q2 2016.

“The political situation had a negative impact on house prices in Barcelona during the final quarter (of 2017)”, explained Jorge Ripoll, Director of Research at Tinsa. According to his explanations, “we are seeing a build-up of demand, primarily amongst investors, which has now started to spread to other buyer profiles”.

The quarterly decrease in Barcelona was concentrated in some of the districts that have some of the highest prices, such as Ciutat Vella (which saw a decrease of 5.8%), Les Corts (-5.5%) and Sarrià-Sant Gervasi (-1.1%); and they were not offset by the increases recorded in other neighbourhoods, such as Nou Barris (4.6%) and Sants-Montjüic (4.2%). Meanwhile, the growth in Madrid was boosted by significant increases in the districts of Chamartín (8.4%), La Latina (7.9%) and Carabanchel (6.9%).

This data means that Madrid outperformed Barcelona in terms of cumulative growth over the course of the year. In this way, the Spanish capital went from a YoY increase of 15.5% in Q3 to 17.1% in Q4, the highest of any of the provincial capitals. By contrast, the YoY increase in Barcelona moderated from 20.6% in Q3 to 14.8% in Q4, making it the second-placed municipality. In the Spanish capital, the most significant YoY increases were recorded in the following districts: Centro (21.1%), Salamanca and Retiro (both 17.6%); whilst in the Catalan city, prices soared in Sants-Montjüic (26.5%) and Sant Martí (24%).

The pull of the country’s two largest cities meant that house prices in Spain rose by 4.2% last year, accelerating significantly with respect to the 0.6% recorded in 2016 to reach an average price of €1,264/m2. This represents “moderate growth” according to Ripoll, who highlights that 2017 marked “the start of the recovery”.

Besides Madrid and Barcelona, the cities that recorded the highest price rises were Palma de Mallorca (13.7%), Pamplona (12.5%), Burgos (8.8%) and Vitoria (8.2%). In total, 30 of the 49 provincial capitals analysed in the study recorded positive growth. They also included important urban nuclei such as San Sebastián (6.1%), Sevilla (5.9%), Alicante (5.7%), Málaga (4.5%) and Valencia (3.9%). Of the 19 provincial capitals that recorded negative figures, the most notable decreases were recorded in Bilbao (-3.5%), Vigo (-0.6%) and Zaragoza (-0.8%), although Ciudad Real (-12.6%) recorded the worst result.

The decrease in house prices in Barcelona during the fourth quarter means that the Catalan capital was knocked off of its podium by San Sebastián as the most expensive town in Spain per square metre. In this way, the average house price in the Donostiarra city amounts to €3,231/m2. Meanwhile, the average house price in Barcelona amounts to €3,129/m2, and so, the sizeable gap – of approximately 20% – was maintained with respect to Madrid, where appraisers estimate that the average house price amounts to €2,601/m2 (…).

In terms of the effects that the Catalan crisis may have on the performance of the sector over the medium-term, Ripoll highlights that if the uncertainty experienced over the last quarter is prolonged, the negative evolution in Barcelona “may become endemic and result in a contraction”. Moreover, “we cannot rule out that” that phenomenon “will affect the rest of Spain” (…).

In this way, the average price of €1,264/m2 represents a return to the levels last seen in Q3 2013 and means that prices have decreased by 38.3% on average with respect to the historical maximum reached in 2007 (…).

Original story: Expansión (by Ignacio Bolea)

Translation: Carmel Drake

House Prices Forecast To Rise By 5% In 2017

6 June 2017 – Expansión

Growth / The sharp fall in house prices during the crisis years, combined with the pent-up demand, the reactivation of mortgage lending and the recovery of the Spanish economy means that property developers, appraisal companies, real estate companies, funds and consultants alike are all predicting fresh rises in house prices this year. Nevertheless, the professionals stress that the growth in prices will vary by area, with Madrid and Barcelona leading the recovery.

In 2016, house prices rose by 4.7% in Spain on average, according to the National Institute of Statistics (INE). That growth rate was the highest since the burst of the real estate bubble, a decade ago. And the experts believe that that figure will not only be repeated in 2017, it will actually be bettered. “According to CBRE’s Trend Barometer which reflects the views of the 100 most senior directors in the real estate sector, one out of every two surveyed believe that house prices will grow by between 3% and 6% in 2017 at the national level, whereas only 21% shared that optimism in 2016. It is the first time since the start of the crisis that the experts are forecasting a general rise in house prices in Spain”, explained Adolfo Ramírez Escudero, President, CBRE Spain. (…).

According to the majority of the experts, the increase will amount to around 5% this year…(…).

Although all of the experts are optimistic about the overall trend in prices, several are quick to point out that this increase will vary by region. “The recovery in prices is proving selective and heterogeneous. Although prices are soaring in certain places, they have still not bottomed out in other markets”, said Pedro Soria, at Tinsa.

“Salaries have not risen to a level that makes us think that prices are going to soar, although there are some exceptions in specific areas of the large regional capitals where we have detected strong demand”, said David Martínez, CEO at Aedas Homes.

By area, Madrid and Barcelona account for the best forecasts in terms of price rises. (…).

Similarly, in addition to the two major cities, the positive outlook is starting to spread to new areas. “Prices are on the rise primarily in the major capitals and on the islands”, said Sandra Daza, at Gesvalt.

The improvements in the macroeconomic variables mean that the good feelings about the housing market this year are also expected to have an impact over the coming years. “House prices are going to continue to rise over the next few years. This year, we expect to see an average rise of around 5%, but the shortage of buildable land in those areas where demand exists means that we can expect to see higher rates of growth in the future”, said Javier de Oro, at Aliseda, the real estate arm of Banco Popular.

In this sense, and despite the price rises that have been seen in recent quarters, the experts point out that we are still a long way from the figures seen before the burst of the bubble. “We are entering a period of growth, which may last three or four years. It is true that there are cycles, but I don’t think that we’ll ever see the price decreases of the past again”, said Juan Antonio Gómez-Pintado, President of the property developer Vía Célere and of the sector organisations Asprima and APCE. (…).

Whilst in the case of new homes, the upward trend in prices seems clear, in the case of second-hand properties, a recovery is also being seen but at a slower pace. “So far this year, our real estate index has been registering very slight YoY decreases, of just a few tenths of a percentage point, which shows us that second-hand house prices in Spain are stabilising”, said Beatriz Toribio, Head of Research at Fotocasa. (…).

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

What’s In Store For The Housing Market In 2017?

28 December 2016 – Cinco Días

“The real estate market can look forward to a new smooth and long expansionary cycle”. That is the consensus of the majority of analysts who have spent the past few days preparing their end of year report and forecasts for next year. Although the forecast figures are unlikely to coincide exactly, the fact is that the trend is unanimous. Provided there are no major macroeconomic changes, in other words, provided employment continues to grow and interest rates continue to remain a minimum levels, all of the experts consulted, be they property developers, construction companies, intermediaries such as the API, notaries, registrars, appraisal companies or bankers, agree that: 2017 will be better than 2016.

This does not mean that there are no clouds on the horizon. For the consultancy firm Knight Frank, the main risk is the political context at home and, to a lesser extent, overseas. “During the months when there was a caretaker Government, many projects were frozen; now the main uncertainty is whether the new Govenrment will manage to approve the budgets”, said Ernesto Tarazona, Managing Partner of Residential and Land at Knight Frank.

In this way, provided there aren’t any new political upheavals, 2017 will be the year in which more homes are sold and constructed and at higher prices. In terms of production, experts calculate that if this year around 70,000 new homes are going to be finished, then next year that figure should increase to around 100,000. Meanwhile, in terms of transaction volumes, next year could be the first year since 2008 when we see more than half a million homes being sold once again, according to Tinsa.

On the other hand, the forecasts vary the most when it comes to house prices, with predicted increases ranging from 2% to 5%. The VI Observatory of the sector, compiled by the Spanish Association of Value Analysis (AEV), together with the Head of the Applied Economics Department at the University of Alicante, Paloma Taltavull, and a group of 21 experts states that the evolution of house prices will be contained due to two essential factors: the stock that still needs to be sold or leased, of which they calculate that 25% is owned by the banks; and the weakness in terms of demand that still persists across the majority of the country. In the opinion of these experts, prices will end this year with nominal increases of around 3.8%, and will continue to rise by around 3% in 2017. Other sources, such as Bankinter, raise that percentage to 5%, due to the booms currently happening in the real estate markets in Madrid and Barcelona, where house prices are rising at double-digit rates given the scarcity of supply of new homes.

What all of the experts seem to have rejected is that the market may generate a new bubble over the medium term, given that: house sales are growing in a sustainable way, in line with new mortgages; and they are doing so in regions with the greatest economic activity and highest levels of job creation. Moreover, the recovery in terms of the promotion of new homes will act as a buffer to prevent one-off price spikes amounting to anything more. (…).

Original story: Cinco Días (by Raquel Díaz Guijarro)

Translation: Carmel Drake

BBVA Research: House Prices Will Rise By 3.5% In 2017

19 October 2016 – Expansión

(…). BBVA Research indicated yesterday, in its report entitled “The Real Estate Situation in Spain” for Q2 2016, that “the improvement in sales is permitting a gradual appreciation in house prices”, which are expected to grow by 2.5% this year and by 3.5% next year. It added that this rise will be accompanied by very significant growth in terms of transaction volumes, given that sales are forecast to grow by 10% this year and by 6.5% next year, to reach 475,000 real estate operations in 2017.

This report echoes data published by Spain’s National Institute of Statistics (INE) and the Bank of Spain, as well as by property registrars and several appraisal companies. One of them, Tinsa, recently indicated that house prices rose by 2.4% in September, with a strong increase in rental prices. Nevertheless, BBVA Research went a step further and said that this positive trend will continue well into next year, and may even accelerate thanks to job creation, improved confidence, the opening of the credit tap and demand from overseas buyers.

All of this will reinforce the effect that the price rises seen in recent months have had in terms of encouraging the market and investors who do not want to miss out. In this sense, BBVA Research said that “the path observed in terms of residential property prices is generating positive expectations, which will become a new factor that will support the demand for housing”. As a result, the sector will manage to offset some of the forecast deterioration in other factors next year, such as economic growth (which will slow by almost one percentage point in 2017, according to the main analysts, including BBVA itself), the moderation in global growth and the expected increase in oil prices.

Knock-on effect

Nevertheless, this increase in prices and transactions is not isolated, but rather is generating even greater positive effects in other aspects of the market. In this way, permits for new homes have recovered at a rate of almost 35% across Spain as a whole and by more than 100% in regions such as the Canary Islands and La Rioja. As a result, 90,000 new permits are expected to be signed next year, with housing starts at record highs compared to recent years.

In addition, the market for land is also enjoying more activity, with a 19.2% increase in the surface area sold during the first half of the year. This increase has also been accompanied by an increase in land prices (5.9%) following an increase of 4.3% in 2015, which reflects the outlook for the sector. Meanwhile, the purchase of land has undergone a significant change in recent years, given that at the start of the crisis, the major investors were individuals and now 70% of buyers are companies, thanks to the return of credit to the market.

Original story: Expansión (by Pablo Cerezal)

Translation: Carmel Drake