Bank of Spain: Real Estate Loans Account for 40% of All New Lending

3 May 2018 – El Confidencial

The Spanish economy is returning to its roots. New real estate loans granted to households, in other words, lending that does not include the renegotiation of existing loans, is now growing at an annual rate of 17.4%. In total, such lending amounted to €36.5 billion in 2017.

And this is not a one-off blip. So far this year, although the rate of growth has softened, it still rose by 11.1% during the first quarter compared to the same period last year. That explains how real estate loans now account for 37.4% of all lending that households requested in 2017, which amounted to €97.5 billion in total.

Those €36.5 billion that were used to buy properties exceeded the amount spent on the purchase of consumer goods (€29.1 billion) and the amount that was financed through credit cards (€13.3 billion), whose growth was very significant.

Paradoxically, the most expensive financing – financial institutions apply significantly higher interest rates when consumer acquire goods using credit cards – grew by 20.3%. Therefore, by five times more than the increase in nominal GDP (with inflation).

Data from the Bank of Spain leaves no doubt about the recovery in real estate lending boosted by low interest rates, which explains that the number of renegotiations is still very active, although it has decreased with respect to two years ago, when many households changed the conditions of their loans to benefit from the European Central Bank (ECB)’s ultra-expansive monetary policy.

Specifically, between 2015 and 2017, Spanish households renegotiated loans amounting to almost €18.0 billion, which allowed them to benefit from the extraordinary monetary conditions. In fact, 1-year Euribor remains at -0.1890%, which has encouraged increasingly more households to opt for fixed-rate mortgages over variable rate products.

The average interest rate on new operations for the acquisition of homes amounted to 2.21% in February, which represented a slight increase of 16 hundredths with respect to the previous month. In any case, these are tremendously favourable real interest rates (with respect to inflation), which boost property sales.

Property bubble

The credit map reflecting the Bank of Spain’s statistics reveals two very different realities. On the one hand, as described, new real estate lending has soared, but on the other hand, the amount granted before 2008, which is when the real estate bubble burst, is continuing to fall very significantly. In other words, families are continuing to repay their loans and, therefore, reduce their indebtedness, but, at the same time, new operations are growing strongly.

A couple of pieces of data reflect this clearly. In 2011, the outstanding loan balance dedicated to real estate activities amounted to €298.8 billion, but by the fourth quarter of 2017, that quantity had decreased to €110.0 billion (…).

The importance of the real estate sector in the Spanish economy is key. And, in fact, the double recession was very closely linked to demand for housing, which fell by no less than 60% between 2007 and 2013. In particular, due to the drag effect on the other components of private consumption (…).

The data on real estate lending are logically consistent with those offered by Spain’s National Institute of Statistics (INE) on the constitution of mortgages, which reflect an increase of 13.8% in February (the most recent month for which data is available) compared to a year earlier. In total, 27,945 mortgages, with an average loan value of €119,708, were granted (…).

Original story: El Confidencial (by Carlos Sánchez)

Translation: Carmel Drake

EU Concern Over Rapid House Price Rises in Spain

21 March 2018 – Eje Prime

Spain is now one of the countries in the European Union (EU) where house prices are growing the fastest. The Spanish residential market ended 2017 with an average growth in prices of 7.2%, exceeding the YoY variation rates in most of the continent’s major economic powers such as Germany, France and the United Kingdom, according to data from Eurostat.

This data, together with the bubble that the country suffered during the final years of the last decade and the beginning of this one, have raised concerns beyond Spain’s borders. There, according to reports by Cinco Días, observers see that the pattern of the previous bullish phase is being repeated.

During the third quarter of the year, for example, house prices across the EU markets as a whole increased by 4.1% in nominal terms. Out of all the countries in the Union, five stood out for their double-digit growth, namely: the Czech Republic (12.3%), Ireland (12.0%), Hungary (10.2%), the Netherlands (10.2%) and Portugal (10.4%).

Established economies such as the German, French and British saw their house prices rise by around 3%. Specifically, the price of housing in France grew by 3.1% last year; in the United Kingdom, the increase amounted to 2.8%; and in Germany, 1.8%. Meanwhile, Italy continued to see price decreases in its residential sector, with a reduction of 2% YoY last year. By city, London, Amsterdam, Madrid and Dublin are going to be the metropolises where prices grow by the most in 2018, with double-digit rises forecast, according to a study by Dbrs.

Original story: Eje Prime

Translation: Carmel Drake

ST: Lack of Skilled Workers Starts to Limit Construction & Threaten House Prices

18 January 2018 – Cinco Días

Without exception, all of the studies currently being published about trends in the real estate market indicate that 2018 is going to be better than the previous year. Nevertheless, the experts are warning that certain risks may lie in wait for the sector.

On Thursday, the CEO of Sociedad de Tasación, Juan Fernández-Aceytuno, presented a report compiled by his company, which forecasts that: house prices will rise by 5.5% on average this year, sales will improve by 14.1% and mortgages will increase by 9.4%.

Based on those figures, it seems that the sector is set to close the year with all of its variables growing at a strong rate. And, what’s more, with no need to talk about the generation of a new bubble, for the time being, at least. Nevertheless, Fernández-Aceytuno warns that we should not lose sight of certain indicators and concrete facts that are already starting to emerge and that may be early signs of situations from the past that nobody wants to see a repeat of.

One such circumstance is the lack of skilled personnel for construction projects that is being seen now that property development has taken off again. The CEO of Sociedad de Tasación revealed that work at some sites has been suspended due to a lack of labour, which is not only going to result in delays in the hand over of certain homes, but which may also end up leading to an increase in house prices. “Most of the best professionals that were working in the previous boom cycle have retired or retrained in other areas, which is why property developers are finding it hard to find qualified personnel for their jobs”, he explained (…).

Another risk that may lead to distortions in the proper operation of the market is the paralysis of too many urban development plans, which, in turn, leads to a shortage of buildable land for the construction of new homes. “All restrictions on the supply side end up resulting in a bubble”, said Fernández-Aceytuno. For that reason, he recommends that to the extent possible and where it is clear that demand for housing exists, it is desirable that the urban development processing times be made as streamlined as possible (…).

Regarding the current situation in the residential rental market, the report from Sociedad de Tasación warns that it is possible that the high returns that are being recorded at the moment constitute an “ephemeral” bubble, given that in some areas, we are starting to see the rise in rental prices tail off, since rent is very volatile to certain factors.

One of those is the limitation on rental prices being demanded by some of the political parties, to reflect what is happening in other European cities. “We consider that in the rental market, the path to follow cannot involve imposing limits. Each owner must be free to lease his home at the price he wants to and then comply with the law and pay the taxes that he ought to”, he said. In this sense, he defended his point that with more rental properties, Spain would be a richer country, because rental favours labour mobility and constitutes a more liquid market. However, he did demand the legal security be professionalised and guaranteed so that increasingly more companies want to invest (…).

Original story: Cinco Días (by Raquel Díaz Guijarro)

Translation: Carmel Drake

BBVA Prepares Sale of €1.5bn Property Developer Loan Portfolio

30 November 2017 – Expansión

The property sector / The second largest Spanish bank detects a large appetite from opportunistic funds for the real estate risk it has left over: €4.8 billion, after deconsolidating €13 billion of foreclosed assets.

BBVA is making steady progress to clean up its balance sheet. The entity is preparing the sale of a portfolio of property developer loans with a gross value of between €1.5 billion and €1.6 billion (31% of the total) after deconsolidating the risk associated with its foreclosed assets.

The group’s gross real estate exposure has been reduced to €4.8 billion in the form of property developer loans following the agreement with Cerberus to transfer €13 billion in foreclosed assets to a newly created company. BBVA’s plan is to sell one-third of its property developer loan portfolio to an opportunistic fund.

“It is going to be a very competitive portfolio”, said Javier Rodríguez Soler, Head of Strategy and M&A at BBVA, speaking to Expansión. In parallel to the operation with Cerberus, the bank has identified a large appetite from the big funds, such as Lone Star, Blackstone and Apollo, for loans linked to the property sector. The portfolio comprises finishing buildings, properties under construction and land.

Transfers to its subsidiary

The intention of BBVA is to reduce its risk estate risk to almost zero. The Head of Strategy said that the bank is looking to transfer another €1.5 billion of performing property developer loans to its Spanish subsidiary.

Many banks separated out their real estate businesses to curb the impact of the fallout from the burst of the bubble on their annual accounts. BBVA’s property unit lost €281 million during the 9 months to September this year, down by 10.9% compared to a year ago. Sources at the entity expect the real estate business to stop generating losses in 2018.

Yesterday, BBVA took a giant step to clean up its real estate-related risk. The bank has created a company together with Cerberus to transfer 78,000 properties with a gross value of €13 billion. 47% of the foreclosed assets are located in Cataluña, the historical heartland of Catalunya Caixa (CX) and Unnim, which were both absorbed by BBVA during the crisis. Some of those properties are social housing units, whilst some of those proceeding from Unnim are covered by an Asset Protection Scheme (EPA).

The US fund will own 80% of the new vehicle after paying BBVA €4 billion; the banking entity will own the remaining 20%. Haya Real Estate, Cerberus’s platform in Spain, will manage the portfolio of properties that the bank holds onto. The agreement also involves the transfer of 400 employees from Anida, the real estate arm of BBVA, to the joint company with Cerberus.

Original story: Expansión (by R. Sampedro and R. Lander)

Translation: Carmel Drake

Fitch Warns Of RE Bubble In The Centres Of Spain’s Large Cities

25 October 2017 – El Mundo

The ratings agency Fitch is warning that a real estate bubble is now visible in the centre of Spain’s large cities, although it does not anticipate a widespread bubble in house prices across the country as a whole in the short term, due to the high volume of stock that still needs to be absorbed and the restrictions facing people wanting to access a home.

Those were the findings of analysis performed for the Housing Sector in Spain report published by the entity, which explains that bubbles involving these types of localised assets are now very evident: the strong demand and limited supply of housing in the country’s main cities are leading to extreme price increases that are becoming increasingly “unsustainable”.

According to the agency, in the central neighbourhoods of Madrid and Barcelona alone, prices have recorded an annual increase of between 15% and 35%.

For Fitch, this demand is being influenced by quantitative easing, purchases by foreigners and investment decisions, given that investors are looking to benefit from the appreciation in asset prices and rental yields. Nevertheless, the agency forecasts that these “ingredients” will not influence the overall real estate market in the short term.

Similarly, the ratings agency asserts that it is “highly unlikely” that the problems in the real estate market are correlated with the economic recovery in general and it forecasts that the average discounts being applied to sell foreclosed homes are going to continue to be very high and stable over the next few years.

This situation will continue for as long as the banking sector continues to have an excess stock of housing and for as long as buyers insist on significant discounts to acquire foreclosed homes, said the ratings agency.

According to data from the company, the discount on the sale of foreclosed homes is still “high”, up to 60% on average, compared to the initial valuation, whilst discounts can range from between 50% to 75%.

In this sense, the dispersion of the discounts on the sale of foreclosed properties is decreasing. In fact, the gap between the range of discounts decreased to 25 percentage points at the end of 2016 from 35 percentage points during the period comprising 2010 and 2011. Nevertheless, it says that this reduction is not widespread.

Problems accessing housing

On the other hand, Fitch explains that access to housing will continue to be complicated because the velocity of the house price index is exceeding wage variations.

In this way, the families’ capacity to save is increasingly reduced, also due to the labour market that favours temporary contracts over permanent ones, which makes it hard for would-be buyers to save enough to make the initial down payment of 20% necessary to buy a home.

The report also underlines that access to housing over the long-term may be limited by the gradual elimination of monetary stimuli in the market and the likely scenario of higher interest rates.

Original story: El Mundo

Translation: Carmel Drake

Investment In Land Soars In Alicante & Valencia

18 October 2017 – El Mundo

It is nothing like the madness of the boom years, but the sale of land is resurging in Valencia and Alicante, in line with the recovery of the real estate sector. The prices being paid are still well below those of the boom years, but the market is shaking itself up nonetheless. There is still a lot of raw material on the balance sheets of the banks, which were forced to take on these illiquid assets from property developers following the outbreak of the crisis.

And it is those products that are gradually coming onto the market. Property is being reactivated and land is now needed again for construction, especially in the coastal areas, where it is starting to become scarce. The situation inland is another story, where there are enormous portfolios of land, waiting for projects that will take a long time to materialise, if they ever happen at all. There, demand for housing is much more limited than it is along the coast (…).

The latest figures from the Ministry of Development reflect this upturn in land transactions in the two provinces. During the first half of this year (the latest period for which data is available), 763 land operations were closed in Alicante and Valencia. During the same period in 2016, 634 sales were completed. In Valencia, for example, the number of transactions involving companies doubled during that period, from 80 operations to 158.

Meanwhile, in Alicante, where 375 land transactions were closed, activity returned to its level in 2008, just before the bubble burst. During the first half of that year, there were 340 operations involving the sale of land. During the second quarter of this year, 226 operations were closed in Alicante, a similar level to those seen during the era of the housing boom.

The surface area acquired through these operations also increased, up from 880,000 m2 of land purchased in Valencia and Alicante during the first half of 2016 to 1.6 million m2 during the same period this year. In other words, the volume of land bought and sold almost doubled.

The amount of money invested also soared during the first half of this year. In this way, investors injected €158 million into land in Valencia and Alicante during the six months to June 2017, up by 91% compared to the same period in 2016. If we look at the figures for the last twelve months, we see the spectacular growth of the market. Between July 2016 and June 2017, investment in land in the two provinces amounted to €277 million; whilst, during the 12 months immediately preceding that period, funds invested €173 million in land. In this way, investment rose by 60% between the two periods.

One of the factors that has allowed these investment levels to recover gradually is the decrease in the price of land, which seems to have bottomed out now, especially in the smallest municipalities where urban development pressure and demand for housing is lower (…).

The collapse of land prices, in general, catapulted operations, and the banks and Sareb were the star players, placing their best plots of land with local property developers that survived the crisis, as well as with large, new operators in the sector, which have now arrived in Alicante and Valencia, attracted by the pull of overseas demand and second homes for the domestic market (…).

According to the statistical series published by the Ministry of Development, urban land prices in Alicante peaked during the fourth quarter of 2006, at €528/m2, before dipping to their minimum level in the second quarter of 2014 (€100/m2). Now, land is being sold at around €134/m2 on average (19% cheaper than it was in June 2016). In Valencia, the current price is €145/m2 (down by 2.5% in YoY terms and compared to a peak of €391/m2 during the first quarter of 2007) (…).

One of the areas with the greatest real estate activity is the south of Alicante, specifically, the area around Orihuela Costa and Torrevieja, where almost all of the available urban land has now been sold, according to the latest report from Solvia Market View.

Original story: El Mundo (by F. D. G.)

Translation: Carmel Drake

RE Recovery Causes Spike In Permits For VPO Home Sales In Madrid

16 October 2017 – Cinco Días

The recovery of the real estate market is consolidating to reach every segment and type of home; and social housing properties (VPO) are no exception. In the statistics published by Spain’s National Institute of Statistics (INE) each month, we can see that VPO properties account for between 7% and 9% of all transactions. That figure is higher in the Community of Madrid, given that the authorities in that region are seeing that the number of permits to sell these kinds of homes, which are subject to a specific legal framework, are soaring.

Since social housing properties are allocated to families with fewer resources, they have always been associated with lower prices, when such families do not receive any additional help, and moderate prices, when the families also receive direct subsidies, plus the possibility of financing them with so-called subsidised loans, those that accrue interest at a lower rate than charged in the free market.

For this reason, and to avoid owners from speculating with homes that are made available to them thanks to public funds, the law offers two options to anyone wanting to sell a VPO home.

The first requires the owner to request permission to sell the home, but, in that case, the maximum price is assigned by the regional authorities, on the basis of the size of the home and its location (…).

In Madrid, during the boom years, the price difference between a private home and a VPO property reached 30% on average. Nevertheless, the burst of the bubble caused that difference to reduce, to the point that in some neighbourhoods of the capital and in several towns in the region, the prices of private and social housing homes ended up being the same (…).

That price difference is key for choosing the second option in the event of a sale. If an owner considers that he can sell his VPO home at a significantly higher price than the level set by the autonomous government, then he can request that his home be disqualified. The process is not easy, owners need to follow several procedures, which are somewhat tedious, but the advantage is that if all the requirements are fulfilled, then the Administration grants the disqualification without any problem.

The price rises in Madrid, one of the regions where houses are appreciating by the most, is encouraging both those who want to sell their VPO homes at an appraisal price, as well as those who prefer to do so without any obstacles in the free market (…).

In this context, sources at the Ministry of Transport, Infrastructure and Housing in Madrid have seen how permits to sell VPO homes have soared by 30% in the last two years and how the number of requests to disqualify homes has increased by 21% (…).

Finally, according to José María García, the Director-General for Housing in the Community of Madrid, trying to sell a home without the corresponding permit or for a price that exceeds the appraisal price may result in the imposition of fines amounting to between €6,000 and €60,000.

Original story: Cinco Días (by Raquel Díaz Guijarro)

Translation: Carmel Drake

Spain’s Residential Sector: A Fleeting Boom Or A Genuine Bubble?

3 October 2017 – El Confidencial

A fleeting real estate boom or another bubble in the making? Although many in the real estate sector – property developers, banks, experts… –, deny that Spain is committing the errors of the past and are instead convinced that we are witnessing the creation of a new real estate boom, the truth is that some indicators have started to trigger the first alarm bells, in particular, those relating to the evolution of house prices. The increases in house prices are not only generalised, in certain markets, they are very striking.

Such is the case of large cities, like Madrid and Barcelona, where the increases – in new build and second-hand prices – are now well into the double digits. According to data from the appraisal company Tinsa, in just twelve months, house prices have risen by 20.6% in Barcelona and by 15.5% in Madrid. This means that during the summer months, there has been a real boom in prices since, during the second quarter of the year, the YoY rise amounted to just 1.8% and 2.7%, respectively.

“A sustainable increase in prices would range between 4% and 5%. The double-digit figures in certain areas, where there is limited supply or a tourist boom, such as Las Palmas and Ibiza, are sustainable over the long term”, explained Jesús Amador, Real Estate Analyst at Bankinter, speaking recently to El Confidencial.

Both cities are still well below their maximums of 2007 (Barcelona is 28.3% below and Madrid is 37.4%), nevertheless, since their minimums, prices have now appreciated by 44.4% and 24.9%, respectively (…).

Prices in Palma de Mallorca have returned to the peaks of 2007

The most notable finding in the second-hand market is the rise in house prices in Palma de Mallorca, which increased by 7.3% over the summer, making it the country’s first capital city to exceed the price levels of 2007, followed by Lleida (5.3%), according to data from Idealista. Increases in Málaga (5.2%), Girona (4.9%) and Pamplona (3.9%) are also noteworthy (…).

Five indicators of the health of the Spanish real estate market 

1.- Average sales period (liquidity)

In Spain, it takes 9.1 months on average to sell a home. The cities of Madrid and Barcelona are the most liquid markets, with average sales periods of 3.2 and 3.4 months, respectively. Of the five largest capital cities, Valencia and Sevilla have the longest periods, where it takes 8.7 and 6.4 months, respectively, to sell a home.

2.- Financial effort

On average, Spaniards spend 16.6% of their gross household income to pay the first year of a mortgage. The autonomous regions where below-average financial effort is required are La Rioja (13.2%), Murcia (13.3%) and Castilla y León (14.2%).

At the opposite end of the spectrum (…), a much higher percentage of the household income is required to buy a home with financing in the Balearic Islands (21.2), Andalucía (17.6%) and Cataluña (16.7%) (…).

3.- Average mortgage and monthly repayment

The average mortgage in Spain amounted to €113,130 during the second quarter of the year (the most recent data available), compared to €148,037 in 2007, according to data from Spain’s National Institute of Statistics (INE). The average monthly mortgage repayment amounted to €528 in Q2, almost 40% lower than ten years ago (…).

4.- Sales and purchases

The provinces of Málaga, Alicante and the Balearic Islands, which all have a clear tourist component, are those with the highest number of house sales in the last four quarters with respect to the size of their respective housing stocks: 33.3 homes for every 1,000 properties in the province of Málaga; 29.4 in Alicante and 28.8 in the Balearic Islands.

By contrast, the least active markets include Ourense, with barely 6.6 house sales for every 1,000 properties; and the provinces of Zamora and Teruel, with 9.4 and 9.5 homes sold, respectively, for every 1,000 properties.

5.- Permits for new builds

In terms of property developer activity, the provinces of Madrid, Navarra and Vizcaya are still the ones where the highest number of new build permits were registered over the last four quarters, in proportion to the size of the housing stock.

In the Community of Madrid, 5.4 permits were granted in the last year for every 1,000 homes already in existence, whereby exceeding the number granted in Navarra (4.4 permits) and Vizcaya (4.3 permits). The least active areas in this regard include the provinces of Tarragona and Lugo (0.7 permits for every thousand homes in both cases), followed by Valencia, Pontevedra and Zamora, where 1 permit was issued for every 1,000 homes.

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

Tinsa: Residential Land Prices Rose By 4.1% In Málaga In Q2

17 July 2017 – Diario Sur

The housing sector in Málaga is continuing to grow. The price of residential land in the province rose by 4.1% during the second quarter of this year compared to the same period last year, to reach €1,399/m2, which is €154/m2 higher than the national average, according to data from the appraisal company Tinsa. It represented the highest increase in Andalucía and the sixth highest in Spain as a whole; and it consolidates the upward trend seen over the last two years, a situation that has generated concerns about the possibility that the sector is heading towards a new real estate bubble.

The Director General of the Institute of Business Practice (IPE), José Antonio Pérez, said that, for the time being, the growth is “sustainable”, although he warned that the lack of buildable land on the Costa del Sol to meet the current demand from property developers and investors will limit this trend and may lead to a disproportionate rise in prices in some enclaves. Pérez attributes the lack of supply to “restrictions” imposed by the general urban planning orders in certain municipalities and the slow pace of urban planning procedures. (…).

Tinsa’s report also reveals that the average mortgage granted to Malagan households amounts to €126,815, the seventh most expensive in the country, with a monthly instalment of €592. The percentage of household income spent on paying the first year of a mortgage is 27.6%, almost eight points above the national average (19.9%). The appraisal company highlights that this statistic makes Málaga the province where families spend the highest percentage of their income on mortgage repayments, above the Balearic Islands and Barcelona (21%).

Málaga also leads the list of provinces with the highest number of house sales closed in the last four months, with respect to the size of its housing stock: 32.1 for every 1,000 homes. It was followed by Alicante and the Balearic Islands, which also have “a clear tourist component”, said the report. The appraisal company reminds its readers that the province is home to “a large number of high-end homes” aimed primarily at foreign buyers, which put upward pressure on average house prices.

By contrast, the IPE considers that it is “a mistake” to draw conclusions at the provincial level “because you cannot compare the situation in Villanueva del Trabuco, for example, with that of Marbella”. The institute, which specialises in the real estate sector, highlighted the sea fronts and golden triangle formed by Marbella, Estepona and Benahavís as the areas where demand for residential land is highest, as well as the capital, where Limonar and Valle del Guadalhorce are positioning themselves as the new enclaves for future urban development.

House sales

The Real Estate Pulsometer compiled by IPE confirms that Málaga is seeing one of the strongest recoveries in the sector, together with Madrid, Barcelona and the Balearic Islands. Investors, savers, funds and individuals comprise current demand, which caused house sales to grow by 6% last year; and a similar rise is forecast this year. Currently, half of all purchases are paid for in cash and the other half are financed through mortgages (…).

Original story: Diario Sur (by Alberto Gómez)

Translation: Carmel Drake

Servihabitat: House Sales Will Rise By 15.2% In 2017

12 July 2017 – Expansión

According to the “Residential Market in Spain” report compiled by Servihabitat Trends, the analysis platform backed by Servihabitat, house prices are forecast to rise by 4.1% on average this year and the number of sales operations is set to increase by 15.2%, to exceed 465,000.

In addition, the number of new house starts is expected to grow by 15.3% and the number of finished properties will increase by 20.2%, whilst the stock of new homes looks set to decrease by 17.8%.

According to the report, the residential market is showing clear signs of recovery this year.

The CEO at Servihabitat, Julián Cabanillas, has said that “all indicators show that the sector is enjoying sustained and established growth, albeit at different rates. The process of normalisation in the market, with an increase in pressure from demand and the consequent increase in prices, is not happening in a homogeneous way across the country”, he explained.

According to Servihabitat, demand is continuing to rise due to job stability, an increase in household incomes and an increase in the volume of loans granted.

Moreover, demand for investment is growing – it already accounts for between 20% (primary residences) and 22% (holiday homes) of all operations.

The volume of supply of new homes is also continuing its rising trend.

The number of new homes started will increase by 15.3% this year, to 75,500 and the number of finished homes will rise by 20.2% to 48,500.

In terms of construction permits, the figure is expected to amount to almost 116,000 this year, which will represent a rise of 25.9%.

The stock of new homes is set to decrease by 17.8% to amount to 324,000.

According to Cabanillas, the technical stock will amount to between 160,000 and 170,000 homes.

The pressure exerted on demand will drive up prices but in a moderate and non-homogenous way.

This year, the average value of a home is expected to rise by 4.1%.

Cabanillas rules out the possibility of a real estate bubble building in the short and medium term because “the fundamentals are nothing like those that existed before the crisis”.

In terms of the rental market, the report reveals that rental prices rose by between 4% and 5% during the first half of 2017.

Increases of between 2.5% and 5% are expected during the second half of the year, depending on the location of each property.

Servihabitat renders services for the integral management of financial and real estate assets.

Original story: Expansión

Translation: Carmel Drake