Spain’s Mortgage Market Heats Up, Led by Madrid & Barcelona

16 February 2018 – Eje Prime

The mortgage market in Spain is heating up again starting with its traditional strongholds: Community of Madrid and Cataluña. During the 11 months to November, those two regions, together with La Rioja and Cantabria, saw the highest increases in the number of mortgages constituted in the country.

Whilst Congress is still processing a new Mortgage Law, which looks set to introduce important increases in guarantees and transparency for bank users, the number of mortgages is picking up again across the country, with almost 401,000 operations formalised during the first eleven months of last year.

Between January and November, 69,885 new mortgages were signed in the Community of Madrid, according to data from Spain’s National Institute of Statistics (INE). That figure, the second highest in Spain (after Andalucía, the most populated community) represents an increase of 15.7% compared to the same period last year.

In the case of Cataluña, 61,831 mortgages were constituted, up by 10.5% compared to the first eleven months of 2016. Both regions outperformed the evolution across Spain as a whole, where the number of mortgage contracts signed increased by 7.8% between January and November last year.

Nevertheless, the rate of growth in both Cataluña and Madrid was surpassed by La Rioja, which saw an increase of 26.8%. Cantabria also performed well, with a 15.4% increase in the constitution of mortgages during the eleven months to November. Aragón, the Canary Islands, Extremadura and Navarra all saw decreases in the number of mortgages constituted in the period from January to November.

In addition to a rise in the number of mortgages, the average amount of mortgages is also gradually recovering. In November, for example, the average mortgage in the Community of Madrid amounted to €216,137 (the highest amount in the country given the more expensive house prices in that region), up by 9.8% compared to a year earlier. In the case of Cataluña, the average mortgage amounted to €166,191, up by 17.3%.

Far from the pre-crisis levels 

Although the tone of the mortgage market in Spain is recovering, the magnitudes are still well below their pre-crisis levels. In 2006, for example, more than 1.7 million mortgages were constituted in the country between January and November, for a higher average amount.

Since 2006, the average amount of mortgages in the Community of Madrid has fallen by 58.5% and, in the case of Cataluña, the decrease amounts to 58.5%. It just so happens that the decreases in both regions have been lower than the reduction across the country as a whole, where the average mortgage is now 78% lower than it was in 2006.

Original story: Eje Prime (by Jabier Izquierdo)

Translation: Carmel Drake

Notaries: House Sales Rose By 13.3% In Q2

26 October 2016 – El Mundo

The housing market is sticking firmly to its path of recovery. This situation means that house sales, prices and the granting of mortgages are all continuing to rise, according to real estate statistics from the General Council of Notaries corresponding to the second quarter of 2016.

During Q2 2016, house sales rose by 13.3% at the national level (122,776 transactions were recorded), with double digit growth rates recorded in the vast majority of autonomous regions. Reductions in the number of house sales were recorded only in Navarra (-20.4%) and La Rioja (-2.7%).

The Balearic Islands – the main market driver

Six of the autonomous regions that recorded sales growth registered increases below the national average (13.3%), whilst the remaining nine recorded above-average increases. Notable rises were observed in the Balearic Islands and Cataluña, with increases of 27.8% and 25%, respectively.

On the other hand, average prices per square metre at the national level grew by 1.3% during the second quarter of the year, to reach €1,314/m2, and that figure was far surpassed in the Balearic Islands (€2,189), País Vasco (€2,169) and Madrid (€1,883).

Average prices decreased in eight autonomous regions, falling particularly sharply in La Rioja (-34.0%), Navarra (-20.1%) and Castilla y León (-12.3%). Meanwhile, price rose in line with the national average in País Vasco (2.1%) and Murcia (2.5%). Nevertheless, the highest YoY increases in the average price per m2 were recorded in the Canary Islands (7.7%) and Madrid (4.9%).

Regarding the mortgage market, loans signed to acquire homes recorded double digit growth rates overall. The national average increase amounted to 26.1% (with 56,815 operations), with the exception of Navarra, where the number of mortgage operations fell by 0.7%. The autonomous regions with the highest growth rates were the Balearic Islands (48.7%) and Cataluña (45.7%) and the smallest rises were seen in La Rioja (6.7%) and Cantabria (16.8%).

The average mortgage amounted to €130,254

The average mortgage at the national level rose by 3.5% YoY, to €130,254. Despite decreases in Extremadura (-29.1%) and the Canary Islands (-16.1%), significant increases were observed in the average loan amount in Madrid (14.6%) and the Balearic Islands (10.6%).

Finally, the percentage of house purchases financed using mortgages stood at 46.3%. The autonomous region with the highest percentage of financed house purchases was País Vasco (70.4%), whilst the Community of Valencia (31.7%) saw the fewest financed house purchases.

Original story: El Mundo

Translation: Carmel Drake

INE: 23,607 New Mortgages Were Granted In April

30 June 2016 – El Economista

Residential mortgages recorded strong growth once again in April, providing further proof that the recovery is well underway in the real estate sector in Spain, where prices are rising once again in the major cities. Forecasts indicate that 300,000 mortgages will be granted in total this year, although it is hard to believe that those figures will ever return to the level seen during the period 2005-2007 of 100,000 mortgages per month

According to the National Institute of Statistics (INE), 23,607 residential mortgages were recorded in the property registers in Spain in April, up by 24.6% compared with the same month in 2015 and by 2.7% compared to March.

That made it the highest YoY growth rate since August 2008, well above the increase of 14.5% recorded in March. The average residential mortgage in April amounted to €108,354, up by 5.1% compared to a year earlier. (…).

The banks are playing their part

According to Beatriz Toribio, Head of Research at Fotocasa, “Banks are very interested in granting mortgages at the moment and that is boosting the market at a time when prices are stabilising, which is also encouraging transactions”. (…).

The portal Idealista agrees with this view of “normalisation” in the sector, which is being supported by low underlying interest rates in the Eurozone.

Nevertheless, they highlight that the seasonality caused by Easter may be distorting the April figures and that in any case, the mortgage business is continuing to narrow given that more mortgage repayments are being registered still than new loans being granted.

In summary, Fernando Encinar, Head of Research at Idealista, says that “if we continue at this rate of growth, it is very likely that we will close the year with around 300,000 mortgages granted, well above the figure of 245,000 recorded in 2015”.

Despite the improvement, the 23,607 new mortgages granted in April fall well short of the more than 100,000 mortgages that were granted per month, on average, during the period 2005-2007.

Higher growth in Barcelona and Madrid

(…). Nevertheless, the improvement is very uneven and, whilst in the large cities, in particular, in Madrid and Barcelona, prices bottomed out several months ago, in other areas (such as small towns, rural areas and the east coast), the recovery is not being seen yet.

On Wednesday, ST Sociedad de Tasación published a report showing YoY price increases of at least 4% in June in Madrid and Barcelona, the cities that reported the highest increases of all of the provincial capitals.

According to the study, the price increases in Madrid and Barcelona are due, at least in part, to the scarcity of new housing stock. The study concludes that “the increasing trend observed since June 2015 allows us to predict that Barcelona and Madrid are going to act as the drivers of the recovery process for new house prices, albeit at a slow pace”. (…)

Nevertheless, the ratings agency Moody’s warned that the recovery could be “limited by various uncertainties and risks”, including the abundant stock of homes that the banks still own and the uncertainties regarding the formation of a government in Spain following the second round of general elections on 26 June. (…).

Original story: El Economista

Translation: Carmel Drake

INE: Mortgage Signings Gained Momentum In 2015

26 February 2016 – Cinco Días

The bank’s commitment to the recovery of the mortgage market, following the period of crisis during which time financial entities almost hermetically sealed the credit tap, is reaping its rewards. The signing of new mortgages increased in 2015, for the second year in a row and the rise was significant. In 2014, the downward trend that had lasted for seven years was broken and the number of home loans signed increased by 2.3%; in 2015, that recovery gained momentum, with the growth in new mortgages amounting to 19.8%.

The mortgage war unleashed by the banks undoubtedly contributed to that recovery. The banks have been making their loans increasingly cheaper and the spreads above Euribor now amount to around 1%, when three years ago they rarely fell below 3%.

Fernando Encinar, Head of Research at Idealista, says that we have now seen the second consecutive year of recovery in the mortgage market, “where we have witnessed four main trends: an increase in the number of operations signed, an increase in the average amount granted, a decrease in interest rates – partly due to the decline in Euribor, but also due to pressure on the spreads, thanks to greater competition between banks – and an increase in the number of fixed rate mortgages being signed, although variable rate products still account for the majority of new mortgages. We expect these four trends to continue in the market in 2016, and whereby contribute to the normalisation of the real estate sector. “

According to the provisional data published today by the National Institute of Statistics (INE), the value of these mortgages amounted to €25,934.7 million, up by 24.1% compared with a year earlier. The average value of mortgages granted for homes rose by 3.6% in 2015, to €105,931.

In December 2015 alone, 19,362 new mortgage contracts were granted for the acquisition of homes, up by 21.1% compared with the same month in 2014, for an average amount of €107,880, up by 2.5% compared with December 2014.

By autonomous region, Andalucía (45,971), Madrid (42,382) and Cataluña (38,583) accounted for the highest volume of mortgages granted for homes.

The number of mortgages signed increased in every autonomous region last year. The greatest increases were observed in the Balearic Islands (+41.4%), Cataluña (+25.9%) and Cantabria (+24.9%).

Original story: Cinco Días

Translation: Carmel Drake

Housing: Price Decreases Slow As Sales Increase

17 April 2015 – Cinco Días

The most prestigious research studies in the country continue to improve their forecasts for expected growth in Spain this year and next; and one of the (key) factors influencing this increase in optimism is, without doubt, the performance of the housing sector. This week was the turn of BBVA Research, whose report not only predicted that the rise in GDP this year could exceed 2.7%, it also forecast “an improvement in the basis for housing investment, which continues to reinforce a change in the cycle, both in terms of supply and demand”.

Moreover, the study concludes that residential investment has increased once again during the first quarter of this year, although these increases have been “moderate and starting from historically low levels”.

The General Council of Notaries and Tinsa also published their own statistics this week. The notaries recorded a total of 26,562 house sales during the month of February, representing a slight decrease of 1.9% compared with the same month last year, although that increases to 2.6% for the seasonality-adjusted figures. Despite reductions in January and February, the notaries argue that the trend over the last few months continues to reflect the stabilisation of sales.

“This decrease may be explained by the end of the base effect following the normalisation of the figures after tax breaks for housing were phased out”, says the report. Also, if we analyse the volume of transactions by type of property, we can see that sales of newly built homes dropped significantly, by 34.4%, whereas sales of used homes (which account for more than 70% of all transactions) increased at a rate of 3.4% p.a.

More mortgages

In terms of prices, INE’s recently published statistics showed that behaviour varies substantially between new and used housing. The average price of house sales in February amounted to €1,192 per square metre, representing a decrease of 3.1% compared with the same month last year. However, whilst the price of second-hand homes barely changed during that period, falling by just 0.1%, the price of new builds experienced an average decrease of 5.8%, compared with twelve months earlier.

Moreover, the notaries calculate that house prices in Spain have decreased by 36.8%, on average, since the start of the crisis, back in 2007.

This figure does not agree exactly with the calculations performed by one of the largest property surveyors in the market, Tinsa, but it is very similar.

According to data published this week by Tinsa (see graph above), which is based on valuations obtained from its network of more than 1,200 surveyors across the country, average house prices experienced a year-on-year decrease of 2.8% in March, compared with a 3.6% drop in the previous month. According to Tinsa’s data, house prices have experienced a cumulative decrease of 41.4% from the peak figures recorded in December 2007.

Overall, the statistics show that the cumulative depreciation in house prices (since 2007) amounts to around 40%, although in areas such as the Mediterranean Coast, the aggregate adjustment amounts to 48.7%.

This fact, which means that in some regions houses today are worth half their pre-crisis values, is what continues to explain that many of the transactions recorded each month are completed without mortgages.

Specifically, in February, only 42.3% of house purchases were financed using a mortgage, which means that more than half were either paid for in cash or were financed using another type of loan that did not require a mortgage guarantee.

The notaries’ statistics also provide information about the average mortgage amount for the purchase of a home, which stood at 75.6% in February. And since more houses are being sold, it is logical to say that the granting of loans for the construction of new developments is also recovering, albeit slowly; the number of loans granted increased by 45.8% in February to take the total number of financed transactions to 335.

Original story: Cinco Días (by Raquel Díaz Guijarro)

Translation: Carmel Drake

Notaries: House Sales Decreased By 10.9% In January 2015

17 March 2015 – El Mundo

House sales decreased by 10.9% in January 2015 with respect to January 2014 and prices fell by 6%.

On the up side, the volume of new mortgages increased by 11.4%.

The real estate statistics published by the General Council of Notaries relating to the month of January 2015, have somewhat dampened the euphoria that the housing market has been enjoying in recent weeks. The notaries report a 10% decrease in sales and a 6% year-on-year reduction in prices. Nevertheless, on the up side, the notaries indicate that during the first month of the year, mortgage lending increased by 11.4%.

According to these house purchase figures, there were 21,320 transactions in January, which represented a year-on-year decrease of 10.9%. “Despite this decrease in the monthly figures, the data actually reflects a stabilisation in terms of sales. This decrease may be explained by the end of the ‘base affect’ due to the normalisation of the figures following the conclusion of the period for tax deductions on purchases”, explain the notaries.

By type of property, the sale of flats experienced a year-on-year decrease of 11.5%, similar to the decline observed for unsubsidised flats (-11.4%). This decrease in the volume of transactions was due, primarily, to the significant decline in the sale of new flats (-31.8%). Meanwhile, the sale of second-hand flats shrank by 7.6% year-on-year. Regarding the sale of detached homes (viviendas unifamiliares), the number of transactions decreased by 8.4%.

Price decreases

In terms of average prices, the cost per square metre of homes purchased in January was €1,234, which represented a year-on-year decrease of 6%. This reduction in the price per square metre of homes was driven by both a reduction in the price per square metre of flats (-5.6% year-on-year), as well as a decrease in the price per square metre of detached homes (viviendas unifamiliares) (-6.4%).

In the flat segment, the price per square metre of second-hand properties amounted to €1,347 (-3.2% year-on-year) and of new homes amounted to €1,624 (-12.5% year-on-year). In terms of detached homes (viviendas unifamiliares), the average cost per square metre amounted to €1,001, i.e. 5.4% lower than in January 2014.

Mortgage lending is on the increase

Meanwhile, the number of mortgage loans granted to purchase homes increased by 11.4% year-on-year, and the average amount of capital loaned amounted to €126,989 (up by +9.2% year-on-year). In this sense, the percentage of home purchases financed using a mortgage amounted to 41.5%. Moreover, for this type of purchase, with financing, the mortgage amount represented an average of 76.2% of the appraisal value of the house financed.

Original story: El Mundo

Translation: Carmel Drake

INE: Mortgages Increased By 1.6% In 2014

27 February 2015 – Expansión

The number of mortgages granted for homes increased by 1.6% in 2014 with respect to the previous year, to 202,954, which meant that the mortgage market returned to positive growth after seven consecutive years of decreases; and so a change in the sector’s cycle begins.

The signing of new mortgages for the purchase of homes rose by 1.6% in 2014 to reach 202,954, the first increase after seven years of decline, according to extracts from the Mortgage Statistics published by INE today.

The number of new mortgages had not increased on a year-on-year basis since 2007, a year in which more than a million more mortgage contracts than last year were signed – 1,238,890, to be exact – therefore, despite the recovery that appears to taking place in the sector, the market is still well below its pre-crisis figures.

The signing of mortgages has fallen steadily since 2007: in 2013, the number decreased by 27.1%, whilst in 2012, 2011 and 2008, they fell by more than 32%. In 2009, they dropped by 22.2% and in 2010 and 2007, the declines were more moderate, with decreases of 6.6% and 7.7%, respectively.

Last year the size of the average mortgage taken out over homes also grew, by 2.1% to €102,130, whilst the total amount of capital loaned rose by 3.8% during the course of the year to reach €20,727 million.

In December 2014 alone, the number of new mortgages recorded in the property register grew by 28.9%, compared with the same month in 2013, whereby completing seven consecutive months of increases. During the last month of the year, 15,962 contracts were signed in total, for an average value of €124,059, also higher than a year earlier.

Overall, in 2014, the total number of mortgaged properties increased by 11.7%, to amount to 314,018. Of those, 22,342 were urban (+12.5%) and 1,054 were rural (-3.2%).

For Fernando Encinar, Head of Research at Idealista, “this increase in the number of mortgages granted represents good news for the sector. Banks have started to hang the “mortgage” sign in their branches once again and demand is beginning to respond, encouraged by the economic recovery and the suppression of prices”.

Manuel Gandarias, Director of the Research Unit at pisos.com offered a similar view: “Everything seems to indicate that the mortgage market will reactivate briskly. Following the significant decreases observed since 2007, the data in 2014 represents the first annual increase in the granting of loans, and the second half of the year really stood out in terms of growth”.

“Similarly, the average size of mortgages has experienced an increase, which is indicative that the banks have recovered the financing role that the sector was has been asking for”, he continued.

“Competitiveness between entities to win the best clients has returned to the mortgage sphere and offers will continue to attract sales and purchases. Everyone will have to pay attention to the evolution of Euribor and the movements of the European Central Bank (ECB), whose measures have accelerated this opportunity. Although the future looks brighter, we should remember that this is the principle of stabilisation. Financing is a fundamental element for families and it is a clear indicator of the process of improvement.

Andalucía, Madrid and Cataluña lead the increases

As usual, the autonomous regions with the highest volumes of mortgages granted in 2014 were Andalucía (36,860), Madrid (35,461) and Cataluña (30,261).

The regions in which the most capital was lent to constitute mortgages were Madrid (€5,134.9 million), Cataluña (€3,439.1 million) and Andalucía (€3,219.0 million).

Original story: Expansión

Translation: Carmel Drake

Tecnocasa: Second-Hand House Prices Increase By 1.12%

19 February 2015 – El Mundo

Second-hand house prices have increased in value (y.o.y) for the first time since 2010.

The average price is now €1,458 per m2 after a cumulative decrease of 58% since 2007.

“The decrease (in house prices) has come to an end and we expect the market to remain stable for a while”.

House prices are also recovering in the second-hand home segment. Without a doubt, the hardest hit by the crisis. According to Tecnocasa’s 20th Report about the housing market (el XX Informe sobre el mercado de la vivienda), used homes increased in value by 1.12% during the second half of 2014, which represented the first increase since 2010. From the peaks recorded during the first half of 2007, this real estate segment has experienced a cumulative price decrease of 58.21%. During the first half of 2014, the fall was minimal, a token 0.04%.

The company reports that the average cost of second-hand homes is now €1,458 per square metre and that, therefore, the slump in prices has come to an end. “The decreases have come to an end and we are beginning a phase of stability”, says the firm, which prepared the study together with the University of Pompeu Fabra (UPF) of Barcelona. “In any case”, it adds, “we expect prices to remain stable for some time”.

By city, Sevilla recorded the largest decrease in the cost of used housing (-4.5%), whilst Barcelona experienced the greatest increase (+5.84%). “The decline in Sevilla reflects the fact that prices began to fall a little later in Andalucía”, said Tecnocasa in a statement. In terms of average values, the lowest continue to be in Valencia (€775 per square metre) and the highest in Barcelona (€2,011/m2).

José García-Montalvo, Professor in Economics at UPF and the coordinator of the report, wanted to stress that whilst the sector “continues to be significantly effected by an improvement in the short term”, he does not expect “a price explosion”, but rather a period “marked by stability”. In this sense, he explained that there has been a “change in terms of expectations” in the Spanish real estate sector, since the market “is no longer ruled by buyers”; sellers are “again able to set prices and conditions”.

The average mortgage decreases to €90,333

Paolo Boarini, CEO of the Tecnocasa Group in Spain, has analysed the financial data and house buyer profile for the second half of 2014. During the period, the average mortgage decreased by 2% (on a year-on-year basis compared with the second half of 2013). This decrease brings the average mortgage down to €90,333.

According to the report, the decrease in the average mortgage is due to the low level of house prices and the decision by banks to reduce loan risk. Moreover, the percentage of mortgages granted to people with temporary employment contracts has deceased from 38% (of the total) in 2005 to 7.6% in the second half of 2014.

In terms of the loan to value ratio, it remains low (72% in the second half of 2014), although, that did represent an increase from 67% in the first half of 2014. The reductions in interest rates and in the size of mortgages has contributed to a decrease in monthly mortgage payments. Such payments averaged €976 in 2007, but now amount to €382. This means that the ratio between the monthly mortgage payment and the monthly salary of the borrower now sits below 30%; a figure that reflects the conservative behaviour of credit institutions.

Boarini highlights that the market is undergoing a period of “stabilisation”, after the speed of decline “decreased in recent years”. In addition, he assures that we are currently seeing “a situation that would not have occurred in previous years, with low prices and good financing conditions”.

Methodology

The Tecnocasa Group’s report has been prepared using data from transactions brokered by its associates. Specifically, based on sales managed by Tecnocasa and loans granted by Kiron, the entity’s financial services company.

Original story: El Mundo

Translation: Carmel Drake

Notaries: House Sales Increased & Prices Stabilised In 2014

17 February 2015 – El Economista

House sales grew by 19.1% to 364,601 transactions in 2014 with respect to 2013, a year of minimal activity in the sector, according to the latest statistics from the General Council of Notaries (el Consejo General del Notariado).

So, whilst this rise in the number of transactions should be assessed from that perspective, the statistics reflect the fact that prices have turned the corner on the negative trend observed during the crisis and are growing again, albeit by only 0.1%.

The notaries explain that “last year the real estate market was marked by the stabilisation of monthly figures, in terms of both quantities and prices”.

Increase in sales

In detail, the increase in sales is more evident in the case of single-family homes, a segment that grew by 26.8% to 74,160, versus the 17.3% increase in the sale of flats, although more flats were sold in absolute terms (290,441 transactions).

In the case of the latter, second-hand sales increased by 23.5% to 234,748 transactions, versus an increase of 9.6% in the sale of new flats (39,306).

Prices increase slightly

In terms of the price per square metre, the average value of homes purchased in 2014 was €1,251 (+0.1%). This increase was primarily due to the increase in the value of flats (+1.4%), since the price per square metre of single-family homes fell by 2.7%.

Similarly, sales of second hand properties are driving the sector. The price of used flats increased by 2.4%, whilst the price of new flats remained unchanged.

Finally, 94,586 transactions involving other properties were recorded last year, of which 38.4% related to land or plots.

Therefore, the notaries insist that “the gloomy path of the real estate market ended last year, with the market showing signs of stabilisation compared with the same period in 2013” and they add that “during the first few months of 2015, they expect market figures to continue on the path of stabilisation observed in 2014, although values may be more moderate”.

Improved financing

On the other hand, the mortgage market behaved in line with the stabilisation of the real estate sector in 2014. The market closed the year with a 5% year-on-year increase in the number of new loans granted and with an average amount of €137,878, representing an increase of 10.2%.

In the specific case of mortgage loans granted for the purchase of properties, the number of loans granted last year increased by 39.4%. This increase amounted to 42% in the case of house purchases and 15.6% in the case of other properties.

The average capital of the mortgages granted for the acquisition of a property amounted to €124,217, an increase of 6.4%. In the case of loans for house purchases, the average amount was €117,507, an increase of 5.2%.

More loans for developers

The notarial statistics indicate that the number of mortgage loans granted for construction also increased during the course of the year, by 20.2%. This increase was higher in the case of house construction (23.8%).

In terms of the average loan amount, the figure stood at €288,974 for all mortgages loaned for construction, which represented a year-on-year decrease of 3.5%, slightly higher than the reduction recorded in 2013 (-3%).

Finally, the percentage of homes purchased using mortgage financing stood at 37.5% last year. Moreover, for these purchases, the mortgage represented 75.2% of the value of the home, on average.

Original story: El Economista

Translation: Carmel Drake

Housing In 2015: Some Vital Statistics

10 February 2015 – Expansión

For translation of the first part of this article, refer to: Housing In 2015: More Sales And Higher Prices

Vital statistics about the housing sector in 2015

House sales: +7.5%: House sales have returned to positive growth. After seven years of decreases, in which the end of tax reliefs barely affected the market – only in an artificial way – a real increase in the number of house sales was recorded in 2014 (up 2.6%). According to the Real Estate Heart Rate Monitor (Pulsímetro Inmobiliario) from the Institute of Business Practices (Instituto de Práctica Empresarial), 7.5% more sales will be closed in 2015 than last year.

House prices: +2.5%: The key indicator for buyers is price, which, combined with necessity, is the factor that tips the balance towards the purchase of a home or not. According to the Real Estate Heart Rate Monitor, prepared by the Institute of Business Practices, house prices rose by 6.47% last year and will increase by 2.5% in 2015. The average value of homes sold in 2014 was €141,718 and this year will close with an average price of €145,261, i.e. we will see a return to 2012 levels.

Construction: +7.5%: Timidly, slowly, the cranes will return to the skyline of Spain’s major cities. In 2014, the construction of new buildings began to increase. Specifically, 37,418 new builds were started in 2014, an increase of 20% on 2013. In 2015, the upwards trend will continue, but it will be less pronounced. According to the IPE, at least the first brick will be laid on 40,225 homes, i.e. 7.5% more than last year.

Mortgages granted: +2.53%: The number of urban buildings financed through mortgages will return to positive growth after no less than eight years in decline. This year, 306,639 loans will be signed for the purchase of property, i.e. 2.53% more than the 299,064 recorded in 2014. Last year, the total volume of mortgages amounted to €39,472 million, i.e. 13.8% more than in 2013. In 2015, the figure will increase to €41,840 million, i.e. 6% more.

Average mortgage: +3.4%: The average size of the loans granted by financial institutions to cover the purchase of residential property in 2014 was €131,984, i.e. 15.8% higher than in 2013. This year the figure will continue to rise, to reach €136,477, i.e. 3.38% more than last year. The average mortgage is equivalent to 93% of the average sales price of homes (note, we should remember that mortgages are granted for all kinds of real estate property).

Construction permits: +5%: Having seen the beginning – timid but evident – of the recovery in the real estate sector, professionals in the market are starting to glimpse a more promising future. And so, permits for the construction of residential developments will grow again in 2015, after eight consecutive years of marked decreases. This year 64,591 permits will be granted. That is 5% more than last year and 24,000 more than the number of new homes started.

All properties: +1.8%: The report from the Institute of Business Practice focuses on the residential market in particular, i.e. the housing market, but the real estate sector is more broad. If we consider all urban properties – shops, shopping centres, offices, housing – 717,471 properties will change hands in 2015, i.e. 1.8% more than in 2014, the year in which the increase was similar, boosted by the arrival of vulture funds looking to purchase bargain properties with high yields.

Housing stock: -29.1%: For the fourth consecutive year, the number of surplus homes decreased in 2014, from 777,000 in 2013 to 662,761. That is, 115,000 fewer homes or 14.7% of the total. In 2015, the decrease in empty properties will be even greater. According to the IPE’s forecasts, the figure will drop to 469,708 properties this year, i.e. 29.1% fewer (193,000 homes). Valencia, Castilla-La Mancha and Andalucía account for 54% of the total stock.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake