Tag: average price

Idealista: Rental Prices Rose By 1.8% In Madrid In Q1

8 May 2015 – El Confidencial

The property crisis; the difficulties faced by thousands of citizens when it comes to buying a home; and the havoc wreaked by evictions have all resulted in a significant boost to the (residential) rental market in Spain. Over the last seven years, many citizens and families have been forced out of the property market and, given their need or desire to become independent or start a family, their only exit has been through the home rental market.

Thus, although owned homes still win by a landslide over rented homes – 78% to 22%, i.e. a very similar level to the one seen at the end of the 1980s – the fact is that in recent years, the balance has tipped a little less towards the property side and although, many experts consider that it is unlikely that we will reach the levels seen in other parts of Europe, where rental properties account for 50% of the residential market in some countries, it is clear that something is changing. “The rental market is here to stay and not just as a lifestyle option, but also as an investment”, says Fernando Encinar, Head of Research at idealista.com.

The rental market in the Community of Madrid is showing the first signs of recovery, as too is the sale and purchase market. Similarly, some areas are sparking greater interest than others in terms of demand, which, in turn, is starting to create a certain amount of tension in terms of prices.

The differences between neighbourhoods are clear. It does not cost the same to rent a flat in the centre of the capital or in the neighbourhoods of Chamberí and Salamanca, where the price per square metre is around €14/m2 (€1,120 for an 80m2 flat) as it does in Villaverde, Carabanchel or Puente de Vallecas, where the price per square metre barely exceeds 8€ (640€ for an 80m2 flat).

These price differences are explained, in part, by the location of the homes – clearly, it does not cost the same to live in the centre of the city as it does in the suburbs – but also due to the excess supply, in places such as Carabanchel and Vallecas, and the strong demand, in areas such as Sanchinarro and Las Tablas, where the experts detect a lot of activity due to the presence of Telefónica and the future arrival of BBVA.

(….)

The tension in terms of rental prices is palpable. Madrid ended the winter with a quarterly increase in rental prices of 1.8%, taking the average price per square metre in the capital to €11.60, however, that represents a cumulative decrease of 15.8% from its record high of €13.80/m2 in 2008.

Moreover, during the first three months of the year, the increase in rental prices was generalised, with rises in almost every district in Madrid, with the exception of Villa de Vallecas and the neighbourhood of Salamanca, according to the data from idealista.com, which also reflects significant increases in the districts of Barajas (5.8%), Retiro (4.7%) and Hortaleza (3.6%).

(….)

Original story: El Confidencial (by Elena Sanz)

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

Ministry Of Development: House Prices Rise For First Time Since 2008

27 February 2015 – El Correo

House prices rose by 0.5% in the last quarter of 2014; and the average price per square metre amounted to €1,463.1.

Average house prices increased by 0.5% in the last quarter of 2014, the first quarterly increase since the beginning of 2008, the year in which the crisis began. Meanwhile, the average price per square metre amounted to €1,463.10, according to reports from the Ministry of Development.

Despite the quarterly increase, house prices closed the year (2014) with an inter-annual decrease of 0.3%; although this percentage was negative, it was more moderate than the -4.2% recorded in 2013.

In this way, house prices recorded seven consecutive years of decline, during which time the cumulative decrease from the peak prices recorded in 2008 amounts to 30.4%. In real terms, after accounting for the variation in CPI, this decrease rises to 36.9%.

Also, despite the slight quarterly increase, the average price per square metre was still at similar levels to those recorded at the beginning of 2014.

By type of property, both new builds and second-hand homes ended 2014 with price increases. Homes that were less than two years old became 1.2% more expensive, to reach €1,517 per square metre, and second-hand homes rose by 0.2% to €1,441 per square metre.

In the subsidised housing segment (vivienda protegida or VPO), the price per square metre amounted to €1,099.90 in the fourth quarter of 2014, representing a year-on-year decrease of 0.3% and an inter-quarter increase of 0.2%.

In this way, the general price index registered a rise of 0.3% between October and December last year, with respect to the previous three months and a year-on-year decrease of 0.3%. With this year-on-year decline, the general price index has now recorded 25 cumulative quarters of negative growth.

Prices decreased the most in Asturias and Navarra

By autonomous region, five regions experienced year-on-year increases in the price of (unsubsidised) homes: Cantabria (+3.6%), the Balearic Islands (+2.4%), the Canary Islands (+1%), Valencia (+0.6%) and Madrid (+0.5%).

By contrast, the largest year-on-year decreases were recorded in Asturias (-5.2%), Navarra (-4.2%), Castilla y León (-3.7%), Castilla-La Mancha (-3.1%) and Galicia (-2.8%).

In terms of towns with more than 25,000 inhabitants, the highest prices per square metre were found in San Sebastián (€3,117/m2), Getxo (€2,696.40/m2), Calvià (€2,526/m2), Alcobendas (€2,477.2/m2), Pozuelo de Alarcón (€2,471.6/m2), Barcelona (€2,416.3/m2) and Majadahonda (€2,399.7/m2).

The lowest prices in towns with more than 25,000 inhabitants were recorded in Elda (€557.3/m2), Crevillent (€597.3/m2), Tomelloso (€600.8/m2), Jumilla (€605.2/m2), Ontinyent (€606.7/m2), Villarrobledo (€609.6/m2) and Hellín (€618.5/m2).

Original story: El Correo

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

Bankia Offers More Than 3,500 Homes With Discounts Of Up To 50%

12 February 2015 – El Economista

Bankia has put more than 3,500 homes up for sale across Spain with discounts “in many cases” of up to 50%, which means that 80% of the homes to be offered by the entity until the end of March have an average price of less than €80,000.

The homes, all of which are second hand, are located in urban and coastal areas, ranging from large capital cities, to metropolitan areas and small towns, said Bankia in a statement.

Valencia is the autonomous region with the largest supply of housing, with more than 1,300 properties for sale, followed by Cataluña, with 800; more than 300 properties will be available in Castilla-La Mancha; 200 in the Canary Islands; and more than a hundred in other autonomous regions such as Madrid, Andalucía and Murcia.

Original story: El Economista

Translation: Carmel Drake

House Sales Increase By 14% YoY But Prices Fall By 1.5%

20 January 2015 – El Economista

31,576 homes were sold in November 2014, an inter-annual increase of 14%; this figure rises to 18.5% per the seasonally adjusted series, according to the Notarial Statistics published this morning by the General Council of Notaries.

The figures reflect a clear stabilisation in monthly sales. Between January and November 2014, the average number of transactions amounted to 29,016 per month, i.e. 17.5% higher than during the same period in the previous year (24,697).

By type of property, flat sales recorded year-on-year growth of 14.4% (19.1% per the seasonally adjusted series), similar to the increase in free market flats (13.9%). This increase in the number of flat sales was due to a strong rise in the sale of existing flats (21.5%), whilst the purchase of new flats declined by 21.0% year-on-year. Meanwhile, sales of family homes increased by 12.3% year-on-year.

In terms of average prices, the cost per m2 of homes purchased in November was €1,194, reflecting a YoY decrease of 1.5%. This reduction in the m2 cost of homes was driven by a decrease in the price per m2 of flats (-3.1% YoY). The price per m2 of family homes increased by 4.1% YoY.

Within the realm of flats, the price per m2 of existing flats amounted to €1,287 (down 1.3% YoY) and the price per m2 of new flats was €1,506 (down 6.4% YoY).

Finally, 7,568 other property-related transactions were closed in November (up 3.8% YoY); 38.0% of which related to land and plots. The average price per m2 of these transactions amounted to €258 (down 12.0% YoY).

Thus, the sector’s monthly figures continue to show that the Spanish property market is stabilising.

Mortgages

The evolution of the mortgage market for the purchase of homes also reflects the stabilisation observed in the real estate sector, having recorded, for the sixth consecutive month, an increase in overall credit, in both absolute and seasonally adjusted terms.

The number of new mortgages taken out during the month of November amounted to 23,264, which represents a strong year-on-year increase of 10.3% (14.7% per the seasonally adjusted series). The average amount borrowed in this case was €126,525, reflecting a minimal increase of 0.1% year-on-year.

Meanwhile, the number of mortgage loans taken out to acquire a property rose by 35.1% year-on-year in November (to 13,857 loans), due mainly to the increase in lending to purchase a home (la concesión de créditos para la adquisición de una vivienda) (37.3% YoY), whilst an increase of 12.5% was recorded for other properties. The average amount borrowed for acquisition amounted to €113,093 (down 0.6% YoY). For homes, average equity was €109,022 (down 0.4% YoY) and the average loan for other properties amounted to €159,533 (up 0.7% YoY).

In turn, the number of mortgages taken out to finance construction rose by 46.8% in the year to November, to 345 new loans. The average amount borrowed amounted to €255,841, representing a year-on-year decrease of 25.7%, driven by a significant decline in the average capital of loans used to construct non-residential buildings (down 50.7%).

Similarly, the number of mortgages taken out to finance business activities increased by 0.7% year-on-year, whilst the amount borrowed decreased by 21.0%.

Finally, the percentage of homes purchased using mortgage financing amounted to 40.6%. In addition, for this type of purchase with financing, the amount borrowed represented an average of 74.9%.

(……)

Original story: El Economista

Translation: Carmel Drake