Foreigners Bought 12.5% Of All Homes Sold In H1 2015

2 October 2015 – Expansión

Investment / In some autonomous regions, foreign citizens are purchasing up to one third of the houses being sold.

Foreign investors are buying one out of every eight homes sold in Spain. And in some autonomous regions, that figure increases to one in every three. That is the main finding from data released by the Association of Registrars, which published a guide – in English – yesterday aimed at foreign citizens interested in purchasing a home in Spain…”.

Foreign purchasers accounted for 12.5% of all residential property sales registered during the first half of 2015, “and even represented between one third and one quarter of purchases in certain autonomous regions, such as the Balearic Islands, where they accounted for 33.5% of all purchases made during the second quarter”, said the registrars.

The Balearic Islands were followed by the Canary Islands (27.5%) and Valencia, where overseas buyers were responsible for 25.7% of all home purchases. Murcia, Andalucía and Cataluña recorded percentages of between 12% and 15%, whilst in Madrid, 4.7% of all home purchases were made by foreigners.

Those were the headlines presented by Beatriz Corredor, the Director of Institutional Relations at the Association of Registrars. The former Housing Minister said that “the trend is rising”. In other words, foreigners are expected to continue their activity over the next few quarters. “The level of interest is not waning”, at least for the time being, added Corredor.

The guide, entitled “Guide to buying a property in Spain” has been prepared in collaboration with the Royal Institution of Chartered Surveyors (RICS) and the International Association of Property Professionals (‘Asociación Internacional de Profesionales de la Propiedad’ or AIPP). The intention is for registrars to accompany foreigners seeking to buy a home in Spain through each stage of the process. “The booklet guides potential buyers through the different stages, in chronological order, from the search for a property through to the registration of the purchase in the Property Register, with detailed explanations about the procedures that need to be followed during each phase, along with useful advice and warnings about the precautions that should be taken and the differences compared with other legal systems”. In fact, the guide contains a list of information and considerations that would be of interest to any purchaser thinking of buying a home: information that can be obtained from the Commercial Register, location and physical characteristics of the home, energy efficiency certificate, licences and insurances.

The intention is to “make the way in which homes are sold in Spain more professional”, says Afredo Millás, the Chairman of RICS. Millás confirmed that the guide is aimed primarily at buyers from the UK, which is hardly surprisingly, given that British citizens are responsible for one in every five foreign buyer purchase (19.85%), well above the purchases made by the French (8.1%), Germans (7.65%) and Belgians (6.5%).

Original story: Expansión (by J.M.L.)

Translation: Carmel Drake

Notaries: House Prices Decreased By 2.4% YoY In Q2 2015

16 September 2015 – El Confidencial

We are clearly living in a skewed market. The experts in the sector have been saying as much for several months now and the various sets of data being published about the housing market in Spain tell the same story week in week out.

Just one week ago, the House Price Index (IPV) published by the National Institute of Statistics (INE) showed a 4% YoY increase in house prices in Q2 2015. That percentage raised alarm bells as it fuelled fears that the market may be overheating again. Today, data from the Ministry of Development shows an increase of 1.2% during the second quarter of the year compared with the same period last year, a more moderate rise than reported by INE.

Now, to cool tempers, data from the notaries reflects exactly the opposite, a YoY decrease of 2.4%, taking the average price per m2 to €1,247. According to the General Council of Notaries, this decrease is due to a 3.1% YoY fall in flat (apartment) prices, meanwhile family homes experienced an increase of 3.4%. Moreover, these latest statistics reflect important differences between the prices of second-hand homes and new properties, with a decrease of 4.5% and an increase of 9.4%, respectively.

Which data is most reliable?

According to INE, “All of the parameters relating to property prices are skewed, the market is not yet operating with any kind of normality”. As such, any figures that are published should be interpreted with caution.

In terms of statistics, rather than depending on one official set of data as an indisputable reference, we are faced with multiple reports that only serve to generate confusion and contradictions. At the state level, for example, we have data from the Ministry of Development and INE, meanwhile the notaries and registrars supply their own data to the market, and so do the appraisers and real estate websites.

All of these reports are prepared on the basis of different methodologies. In this way, the data published by the Association of Registrars differs from that released by INE and again from that supplied by the notaries. The first group publish data with a delay of two or three months, i.e. they release information about prices and transactions signed before notaries two or three months earlier. Therefore, they do not really show the increase or decrease in prices in a given month, but rather what happened in the market several months ago. By contrast, the data issued by the notaries is more or less published in real time. As such, the statistics generally do not reconcile with each other. However, if instead of looking at the exact figures or percentages, we focus on their evolution over time, all of the indicators seem to be telling the same story – the market is stabilising.

That is because we find ourselves in a market that has now emerged from the emergency room, although it is still in need of professional care. In other words, the market has not been discharged from hospital yet and it will take months, if not years, for it to return to any kind of normality.

That is mainly because we are starting from a position of historical lows in terms of sales, mortgages and the construction of new homes; therefore any upwards movement may distort the figures. As a result, it is not surprising that we are talking about increases in terms of sales and the granting of mortgages at rates exceeding double figures. We are starting from zero and therefore any upwards movement distorts the percentages.


Furthermore, we should not forget that we are dealing with a very heterogeneous market. The level of activity is not the same in Madrid as in Albacete, nor is it the same in the neighbourhood of Salamanca as in Usera. Clearly, prices and the market in general will begin their recovery in those areas in which demand is highest and supply is scarce.

Original story: El Confidencial (by Elena Sanz)

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

House Prices Rose By 2.5% In 2014, After Six Years In Decline

16 February 2015 – Expansión

Changing trend / The Association of Registrars (el Colegio de Registradores) reports the first house price increase since the real estate bubble burst. House purchases by foreigners break historical records.

The housing market is generating positive results in a disparate and heterogeneous way, step by step, but it is on the road to recovery and that is what matters. The figures vary a lot depending on the statistical source chosen, but the trend does not: the residential real estate market has changed direction and is heading towards the famous light at the end of the tunnel. That was certified by the Association of Registrars yesterday, which announced a 2.55% increase in house prices in 2014.

This is the first rise in house prices since the crisis erupted in 2008. Based on these results, the cumulative decrease in prices from the peak levels achieved in 2007 is almost -32%, according to the registrars’ methodology, which is based on the methodology of repeated sales, proposed by the economists Case and Shiller, which takes into consideration only data from those homes that have been sold at least twice during the period under analysis (1995-2014, in this case).

The Repeated House Sale Price Index (Índice de Precio de la Vivienda de Ventas Repetidas or IPVVR) “shows the change in the trend that we have observed during the last few quarters, leaving behind a long period of price decreases, and making way for a phase characterised by stability and small quarterly increases”, say the registrars.

Specifically, the IPVVR “shows that prices increased by 0.91% during the last quarter, taking the cumulative annual increase to 2.55%”. In this way, 2014 “was the year in which the house price trend turned a corner”, they explain.

This means that “in terms of prices, the real estate market seems to be bottoming out and heading towards price consolidation, at levels similar to those last observed in 2003”.


77,881 house sales were recorded during the fourth quarter of 2014, representing an increase of 7.33% on the same period in 2013. In 2014, 318,928 house sales were recorded in total, which represented a decrease of 3.1% with respect to 2013. This data is almost identical to that compiled by INE (319,389), although according to the National Institute of Statistics (Instituto Nacional de Estadística or INE), the volume of sales increased by 2.2%. In both cases, the data shows a trend towards stabilisation.

One of the main stories to come out the registrars’ statistics is that the purchase of homes by foreigners reached a new record high last year: accounting for 13% of all transactions. Foreigners acquired 41,492 residential properties in total, whereby completing five consecutive years of growth, up from from 4.24% in 2009.

The composition of nationalities remained relatively stable, although the decline in the number of Russian investors was noteworthy; they moved from third place (in the ranking of foreign purchasers) to sixth place in a single quarter. Thus, the British led the ranking, accounting for 18.6% of foreign purchases in the fourth quarter, followed by the French (9.4%), German (7.2%), Belgian (6.9%), Italian (6.1%), Russian (5.8%), Swedish (5.8%), Chinese (4.1%) and Norwegians (3.7%).

Finally, mortgage debt per household grew by 0.89% year-on-year in the fourth quarter.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake