Tag: autonomous region

Aedas Homes Exceeds its Forecasts for 2017

11 December 2017 – El Mundo

During the eleven months to November, the property developer Aedas Homes, which made its debut on the stock market in October, doubled its land purchase target for the development of housing that it had set for the entire year 2017, according to a presentation submitted to Spain’s National Securities and Exchange Commission (CNMV).

By the end of November, Aedas Homes had acquired land for the development of 865 homes, more than double (108% more) the forecast for year as a whole (416). Moreover, the property developer intends to incorporate land for an additional 130 homes before the end of the year.

In general terms, Aedas Homes has already exceeded its forecasts for 2017, and, according to the company, it expects to see some solid results, taking into account that prices have risen by 7%.

Until November, the property developer had launched 35 projects, above the forecast for the year as a whole (34). Aedas had also exceeded the planned number of homes under construction, with 758, compared to the forecast for the year as a whole of 583.

In terms of pre-sold homes, the total number at the end of the eleventh month of the year amounted to 832, very close to the planned number of 845.

Minimal impact of Catalan crisis

Meanwhile, according to the property developer, the impact of the Catalan crisis has been “minimal”. The company says that pre-sales in Cataluña “are continuing to grow” and that the projects launched in the region “already have 50% of their units pre-sold”.

Cataluña is the third largest market for Aedas Homes, after Madrid and the Costa del Sol. At the end of November, seven of the 35 developments that the company had underway in Spain were located in Cataluña. The developments in the Catalan region comprise 355 homes, a number that exceeds the forecasts for the year as a whole in the autonomous region, which amounts to 322 units.

Currently, Aedas Homes has 16% of its land portfolio in Cataluña, comprising a surface area of 1.5 million m2, with a value of €1.37 billion. In this way, it has sufficient land to build 2,245 homes in the region, out of its current portfolio capacity (for the country as a whole) of 13,044 homes.

Original story: El Mundo 

Translation: Carmel Drake

Cepco: New Build Starts Could Reach 80,000 Units By Year-End

7 November 2017 – Cinco Días

With barely two months to go before the end of the year, forecasts abound about what is going to happen to house prices, house sales and construction activity in the residential sector. After three years (2014, 2015 and 2016) during which the sector has gradually emerged from the worst real estate crisis in recent history, 2017 is going to be remembered as the year in which the improvement in all the variables was consolidated, property developers returned to the stock market and overseas investment in the sector reached record levels.

The only but that continues to mark this recovery is its heterogeneity, given that prices are not rising by the same amount in every autonomous region and homes are nowhere near as easy to sell in Cáceres as they are in Madrid (for example); moreover, cranes are not expected to return to certain regions for a long while yet.

Nevertheless, 2018 can be summarised by the fact that we expect to see more of the same. Prices will continue to recover, even reaching double-digit growth rates, above all in Madrid, Barcelona and certain parts of the Mediterranean Coast; transaction volumes may exceed the 500,000 unit threshold; and the number of new homes started will amount to 80,000 units, if the current rate continues.

And that is because the statistics in aggregate terms reveal some very significant increases, both in terms of transaction volumes and new home starts. For example, between January and August 2017, 56,000 new homes were sold in Spain, up by 5.8% compared to the same period last year, according to the latest report from the Spanish Confederation of the Associations of Construction Product Manufacturers (Cepco).

That represents quite an accelerated rate, with which permits for new homes are trying to keep up. During the first seven months of this year, 49,200 new permits were granted, up by 9,700 compared to the same period last year, which represents an increase of no less than 24.4% in relative terms.

That is what is causing the experts to predict that if these trends continue, then work could begin on the construction of around 80,000 new homes by the end of this year. If that volume of construction ends up being confirmed, the level of activity recorded in 2016, when 64,038 homes were started, will have risen by 25%. Nevertheless, these figures are still well below the more than 865,000 new home permits that were granted in 2006. And a considerable distance from the 200,000 or 250,000 that the consensus of experts in the sector believes will represent the real estate market’s cruising speed over the medium term.

Meanwhile, the number of finished homes also grew significantly during 2017, by 40%, although in absolute terms the figures are still minimal (33,085), as Cepco’s research acknowledges (…).

Original story: Cinco Días (by Raquel Díaz Guijarro)

Translation: Carmel Drake

Notaries: House Sales & Prices Rose In Q2 By 14.2% & 5%, Respectively

31 October 2017 – El Mundo

House sales rose by 14.2% on average during the second quarter of 2017 with respect to the same period in 2016, to exceed 142,000 transactions, whereby moderating the YoY increase experienced in the previous quarter (20.3%) by six points, according to data from the General Council of Notaries.

By type of dwelling, flat sales recorded a YoY increase of 15.3% during the second quarter of 2017, and whereby accumulating 14 consecutive quarters on the rise. In terms of prices, the average cost of homes purchased during the second quarter was €1,387/m2, up by 5% YoY. Meanwhile, the price of flats (in general) rose by 5.6% YoY to €1,529/m2.

According to the Notaries, the sale and purchase of homes rose in every autonomous region during the second quarter of 2017, with the exception of the País Vasco, where sales fell by 0.4% YoY. The highest increases were recorded in the autonomous regions of La Rioja (25.9%), Asturias (21.6%) and Castilla-La Mancha (19.6%).

In terms of house prices, they decreased in Murcia (4.3%), Cantabria (3.7%), Aragón(0.5%) and Castilla y León (0.3%) but rose in the remaining 13 regions, in particular in Navarra (17.7%), Castilla-La Mancha (11.1%), Cataluña (9%) and the Canary Islands (8.9%).

On the other hand, the number of new mortgages granted in the second quarter of 2017 fell by 2.4% with respect to the same period in 2016, after having increased by 7.8% YoY during the first quarter.

Original story: El Mundo 

Translation: Carmel Drake

Idealista: Rental Prices Grew By 24% YoY In September

11 October 2017 – Eje Prime

Rental prices are continuing to climb in Spain. In September, the average price of rental homes rose by 24%, to reach €9.40/m2/month.

By contrast, in cumulative terms during the quarter, the index only rose by 0.5%, according to the real estate portal Idealista.

Eleven autonomous regions saw their residential rental price rises over the summer. The Canary Islands is the region where rental prices grew by the most (3.8%). It was followed by Madrid (3.7%) and Cataluña (3.1%). Meanwhile, the Balearic Islands was the region that saw the most significant decrease in rental prices during the last quarter (-5.9%). By provincial capital, Valencia recorded the highest rental price rise (6.1%), followed by Guadalajara (6%) and Sevilla (5.8%).

Barcelona is the Spanish city with the most expensive average absolute rental price, of €18.3/m2/month. It is followed by Madrid, at €15.3/m2/month, whilst Zamora and Ávila, which both have an average rental price of €4.5/m2/month, are the two cheapest cities in which to rent a home in the country.

Original story: Eje Prime

Translation: Carmel Drake

Ministry Of Development: The Housing Market Moved €36,390M In H1

10 October 2017 – El Mundo

The private housing market in Spain moved €36,390 million during the first half of 2017, which represents an increase of 21% compared to the same period in 2016, when the figure amounted to €30,020 million, according to data published by the Ministry of Development.

In this way, the monetary value of transactions involving private homes in Spain is maintaining the upwards trend seen over the last three years. In 2016, the figure amounted to €60,837 million, which represented the highest level since 2010, but which was still well below that peak (€80,782 million).

The more than €36,000 million that was moved in the residential real estate sector during the first half of 2017 corresponds to 254,816 transactions involving private homes that were bought and sold between January and June, up by 18% in YoY terms. Specifically, second-hand homes moved €32,477.4 million (up by 22%), whilst the volume moved by new build sales was much lower, at €3,912.5 million (+15.2%).

Madrid was the autonomous region that recorded the highest volume of private home transactions between January and June, at €7,803 million. It was followed by Cataluña (€7,451.9 million), Andalucía (€5,849.1 million) and the Community of Valencia (€3,976.4 million). Next in the ranking came the Balearic Islands (€1,988 million), País Vasco (€1,845.7 million), the Canary Islands (€1,662.1 million), Castilla y León (€1,040 million), Galicia (€902.5 million), Castilla-La Mancha (€780 million), Murcia (€702.3 million) and Aragón (€680.2 million).

Meanwhile, the regions where the housing sector moved the least money during H1 2017 were Asturias (€435.9 million), Cantabria (€372.9 million), Navarra (€369.9 million), Extremadura (€266.5 million), La Rioja (€172.9 million) and Ceuta and Melilla (€89.6 million between the two).

Original story: El Mundo

Translation: Carmel Drake

Threat Of Cataluña Independence Hurts Spain’s Largest RE Companies

10 October 2017 – Expansión

One of the sectors that is being hardest hit by the insecurity generated in Cataluña following the referendum on 1 October is real estate. In just one week, the large companies in the sector have seen their stock market valuations decrease by €717 million and how the credit ratings agency Moody’s has issued warnings about the negative effect of the political tension on the growth of rental income, occupancy rates and asset valuations.

The Socimi that is most exposed to Cataluña is Merlin. The real estate giant led by Ismael Clemente owns assets worth almost €1,500 million in Cataluña. The real estate company in which Santander and BBVA own stakes is also one of the companies that has most backed this market over the last year, positioning the Catalan capital, together with Lisbon, as one of its markets for highest growth.

In the context of that strategy, at the beginning of the year, Merlin purchased the iconic skyscraper Torres Glóries – also known as Torre Agbar – for €142 million. The building, which has a gross leasable area of 37,614 m2, is one of the candidates to house the European Medicines Agency (EMA), which will abandon its current location in London due to Brexit. Sources in the sector consider that the events of recent days completely eliminate Barcelona from the running, in favour of its rivals in the bid: Amsterdam, Dublin, Bratislava, Copenhagen and Milan.

Another Socimi with a significant portion of its assets in Cataluña is Colonial. The real estate company, which is headquartered in Barcelona, has almost 10% of its assets in the region. In the office segment alone, it owns assets worth €827 million in Cataluña, making it its third market after Paris, with €6,144 million, and Madrid, with €1,339 million. Yesterday (Monday), Colonial convened an extraordinary meeting of the Board of Directors to consider moving its headquarters (and in the end, approved their move to Madrid).

One of the projects that Colonial has underway was announced at the beginning of the year, in the form of an alliance with the company Inmo, the real estate subsidiary of the Puig family, for the development of Plaza Europa (Barcelona), with an investment of €32 million. The plan to construct a 21-storey building with a surface area of 14,000 m2 will be undertaken on a plot of land owned by the Puigs. Moreover, at the beginning of the year, Colonial started work to build a turnkey office building in the 22@ district, which will involve a total investment of €77 million and which will be ready by the middle of 2018.

In terms of the other Socimis that are listed on the main stock market, Hispana holds assets in Cataluña worth €255 million at the end of June (…). Meanwhile, Axiare owns four assets in the region (…) worth just over €126 million; and two of the assets in Lar’s portfolio are located in Cataluña (…), with a combined value of €116 million.

Amancio Ortega

(…) HNWIs have also been backing the Catalan market and, in particular, Pontegadea’s exposure to the region is significant. Amancio Ortega’s company does not disclose figures by country or autonomous region (…) however, in 2011 alone, it acquired three assets worth €233 million, including BBVA’s headquarters in Plaza Cataluña, for €100 million. It also owns important buildings on Paseo de Gràcia and Plaza Catalunya, and is the owner of the Inditex group’s largest stores.

Original story: Expansión (by R. Arroyo and M. Anglés)

Translation: Carmel Drake

Tinsa: House Prices Rise By 21% & 16% In Barcelona & Madrid In 1 Year

2 October 2017 – El Mundo

The housing market is continuing its gradual recovery across the country, although there are notable differences in the pace of growth depending on the area. Whilst the YoY average growth in prices is contained at the national level (4%), in the cities of Barcelona and Madrid, prices are soaring, according to provisional data from the IMIE Local Markets index published by the appraisal company Tinsa for the third quarter 2017. Specifically, house prices rose by 20.6% in the Catalan capital and by 15.5% in Madrid.

Tinsa reports that the cost of finished homes (new and second-hand) reached an average of €1,258/m2 between the months of July and September, up by 4% compared to the same period in 2016. The cumulative decrease since the pre-crisis peaks has therefore reduced to 38.6%, on average.

“The market continues to be characterised by a recovery at different speeds, with an overall positive trend, driven by the good prospects for economic growth and with the cities of Barcelona and Madrid as the main drivers of the recovery. In recent months, we have seen how other large regional capitals, such as Valencia and Sevilla, have been experiencing a positive evolution in terms of prices, whereas Zaragoza has been falling somewhat behind”, said Jorge Ripoll, Director of Research Services at Tinsa.

Ripoll said that the situation is characterised by stabilisation in most markets, given that average prices in 13 regional capitals are now lower than they were in Q3 2016. “The number of cities in that situation has decreased with respect to the previous quarter, along with the intensity of the decreases, which are becoming more moderate in general”, he said.

The same outlook at the autonomous level

The Community of Madrid, with a YoY increase of 13.2% and Cataluña (12.5%), stand out as the regions where average house prices have risen by the most over the last 12 months, way ahead of Navarra (6.6%), Cantabria (5.7%) and the Canary Islands (3.3%). At the other end of the spectrum, Extremadura (-3.3%), Castilla-La Mancha (-3.2%) and Murcia (-2.8%) are the regions that lead the price decreases in YoY terms.

If we look at the evolution of prices in 2017 alone, the Community of Madrid recorded an increase of 10.7% between January and September, compared to 8.9% in Cataluña. The region of Madrid, with an average price of €2,004/m2, strengthened its position in Q3 as the most expensive autonomous region, ahead of País Vasco (€1,931/m2), which was also outperformed in Q3 by the Balearic Islands (€1,953/m2).

The regions that record the highest difference in prices with respect to the peaks of the boom are La Rioja, where the average value is 56.1% lower than 10 years ago, followed by Castilla-La Mancha (-53.7%) and Aragón (-49.8%). The regions where average prices have been the most contained since the crisis are the Balearic Islands (-28.4%), Galicia (-32%) and Extremadura (-32.2%).

Barcelona is the most expensive city

Barcelona saw its price gap with San Sebastián widen, as prices in the Catalan capital reached €3,184/m2 compared to €2,997/m2 in the Basque capital. Both still ranked ahead of Madrid (€2,488/m2) and Bilbao (€2,204/m2) (…).

Other capital cities that recorded significant rates of YoY growth in Q3 include Tarragona (13.4%), Vitoria (10.3%), Palma de Mallorca (9.3%), Pamplona (9.1%) and Málaga (7.6%).

Original story: El Mundo

Translation: Carmel Drake

Why Are Spain’s House Price Rises Concentrated Is So Few Regions?

11 September 2017 – Cinco Días

It is becoming increasingly more apparent, with the statistics on the table, that when we talk about the recovery of the real estate market, in reality, we are referring to just a few markets. The Index of House Prices (IPV) published on Friday by Spain’s National Institute of Statistics (INE) shows this very clearly.

The study, which INE prepared using data provided by the notaries, concludes that house prices rose by 5.6% on average during the second quarter of this year compared to the same period last year. In this way, in isolation, it seems that rather than recovering, the market is heading directly towards another bubble, given that the aforementioned figure is no more and no less than three and a half times the level of inflation (which amounted to 1.6% in August). Nevertheless, an analysis of the figure by regions shows that the gulf between what is happening in one region and what is happening in others is persisting and even intensifying in some cases.

Madrid led the ranking of real estate price rises for another quarter. Homes in the region rose by 10.9% per annum on average during Q2, compared to 10.6% p.a. the previous period. In this way, price increases consolidated and even accelerated by three decimal points, the same increased recorded by the national average, which rose from 5.3% in Q1 to 5.6% in Q2.

The second region with the highest price rises was again Cataluña, where the recovery accelerated by even more (five decimal points) up from 8.8% to 9.3%. And the podium of the top three regions where house prices are rising the fastest was completed by the Balearic Islands, where the increase rose by almost two percentage points to 7.4% in Q2, up from 5.5% in Q1.

Beyond those three autonomous regions (…), the truth is that the price rises are proving a lot more moderate. In fourth place is País Vasco, where prices rose by 4.5% on average in Q2, followed by Cantabria, at 4.1%.

These increases contrast significantly with, for example, the 2.4% recorded in Andalucía, a region with a high proportion of tourist housing, and the Community of Valencia, where house prices rose just above the rate of inflation, by 1.8% p.a. in Q2, i.e. by one tenth less than the previous quarter.

In Castilla-La Mancha, Extremadura and Murcia, house prices rose by less than 1%. And Asturias was the only autonomous region where house prices decreased, by 0.3%, in Q2, after rising by 1.4% in the previous quarter.

How come the national average is 5.6% then? Essentially, due to the greater weight that the transactions undertaken in those regions that have the most expensive homes.

New builds

Another phenomenon that INE highlighted in its explanatory note that accompanied the data is the different behaviour in terms of the prices of new homes and second-hand properties. The first saw their prices increase by one percentage point less (4.4% in Q2 compared to 5.5% in Q1). The reason for that deceleration is that increasingly more developments are being started in places where companies are detecting that more demand exists. And since the supply is increasing, so the price rises are, logically, more moderate.

By contrast, in the case of second-hand homes, the recovery in prices remained above 5% p.a. for another quarter and accelerated to increase by 5.8% on average in Q2 compared to 5.3% in Q1.

In this way, house prices have now recorded thirteen consecutive quarters of increases, in other words, they have been rising for just over three years. However, according to various studies, they are still more than 40% below the maximum prices recorded between the end of 2007 and the beginning of 2008. (…).

In terms of the future, Moody’s estimated recently that house prices will continue to rise by around 5% p.a. until 2019 (…).

Original story: Cinco Días (by Raquel Díaz Guijarro)

Translation: Carmel Drake

Ministry Of Development: House Sales Return To 2008 Levels

9 June 2017 – El Mundo

After the storm always comes the calm. The same is true in the residential real estate market. During the first quarter of 2017, house sales returned to levels not seen since 2008. According to transaction statistics from the Ministry of Development, between January and March, 122,787 operations were completed, up by 18.5% compared to the same period in 2016. To find a higher figure during the first quarter of the year, we have to go back to 2008 (159,088).

Of the total number of operations, only 10,771 related to new builds, which accounted for 8.8% of the total. Meanwhile, second-hand properties (112,016) accounted for 91.2%. This data shows once again that the segment of second-hand homes is consolidating its position as the real driver of the market.

In term of protection regimes, the number of free (unsubsidised) house sales amounted to 117,477, accounting for 95.7% of the total. Meanwhile, social housing transactions amounted to 5,310 during the same period, up by 4.3%.

In terms of the data by autonomous region, increases in the number of house sales were recorded in every single one, with the exception of La Rioja, which recorded a decrease of -1.6%. The highest increases were observed in Aragón (53.5%), Asturias (32.5%), Cataluña (27.6%), Cantabria (26.6%) and Castilla-La Mancha (26.3%).

By municipality, the highest volume of transactions during the first quarter of 2017 was recorded in Madrid (9,674), Barcelona (4,657), Valencia (2,588), Sevilla (2,007), Zaragoza (1,799), Málaga (1,778), Palma de Mallorca (1,386) and Alicante (1,194).

Foreigners account for 16.8% of all purchases

In terms of the nationality of buyers, the number of transactions undertaken by foreign residents in Spain experienced a YoY increase for the 23rd consecutive quarter. Specifically, the number rose by 17.9% compared to the first quarter of 2016, totalling 19,805 sales. In total, the number of purchases made by foreigners (residents and non-residents) amounted to 20,593, in other words, 16.8% of the total.

By province, the most purchases by foreign residents were recorded in Alicante (4,539), Málaga (2,206), Barcelona (1,806), Madrid (1,581), Santa Cruz de Tenerife (1,416) and Baleares (1,254).

Original story: El Mundo

Translation: Carmel Drake

Euroval: RE Activity Is Still “A Long Way” Below The Boom Levels

7 June 2017 – Expansión

The real estate appraisal company Euroval has said that real estate activity in Spain is still “a long way” below the levels reached a decade ago.

Specifically, based on data from a simulation that it has performed, Euroval highlights that real estate activity in Spain currently represents a quarter of the level achieved during the real estate boom.

According to the appraisal company, the recent economic crisis “is still taking its toll” on activity in the Spanish real estate sector. In fact, it has highlighted that the number of mortgages granted, the volume of construction revenues and expenses and the number of transactions carried out are still way behind the figures recorded 10 years ago.

By region, whilst in Andalucía, Murcia, the Community of Valencia and Cantabria, for example, real estate activity was operating at 100% in 2004, it is now performing at 13%. Moreover, the autonomous regions that are improving their activity in this sector compared to 2004 are the Balearic Islands (45%), País Vasco (28%) and Navarra and Extremadura (22% in both).

According to Euroval, “there are no known cases of economic sectors in any country representing a similar percentage of GDP as the real estate sector did in Spain at the time of its greatest rise, after which it suffered losses of more than 80% in less than a decade.

The appraisal company considers that the volume of residential appraisals and the supply of housing are the “key” indicators that reflect this decrease. Specifically, in 2006, around 1.3 million appraisals were performed, compared with 625,000 last year.

In 2016, the autonomous region with the highest volume of appraisals was Andalucía, with 129,200. It was followed by Cataluña, with 120,400; Madrid, with 85,300; and the Community of Valencia, with 76,700.

In terms of the housing supply, Euroval’s conclusions highlight the “anomalous behaviour” in terms of housing demand in Spain, given that “despite the significant decrease in prices”, there is still “weak demand in light of the uncertainty surrounding the economy and employment”.

The data from the appraisal company also indicates that this “weak” growth has been concentrated in primary homes above all, which have increased from 15 million units in 2004 to 18 million last year.

The evolution of finished homes used to amount to around 536,600 properties, almost double the number started that year, whilst in 2016, the figures were 50,351 and 34,351 units, respectively. Euroval predicts that the market will tend towards growth over the next two years.

Original story: Expansión 

Translation: Carmel Drake