Tag: capital cities

Spain’s Most Expensive Homes are Located on c/Serrano & Paseo de Gràcia

1 March 2018 – Expansión

Two realities in the housing market / The recovery in prices with respect to 2008 is leaving disparate scenes. The gap between the most expensive area of Madrid, on Calle Serrano, and the most affordable district, San Cristóbal, amounts to 61 percentage points.

In the heart of Madrid, on Calle Serrano, a 90 m2 apartment costs around €857,700 (€9,530/m2) on average, 5% less than in 2008. Meanwhile, 16 kilometres south of the Golden Mile, in San Cristóbal, those same 90 m2 cost around €78,300 (€870/m2), 66% cheaper than during the years of the real estate boom. This situation is repeated right across the country, where, in many cases, the housing market is experiencing two realities in the same city. “The current housing market in Spain is certifying the recovery of house sales and reflects that there is still scope to acquire homes at much lower prices than 10 years ago”, said José María Basañez, President of TecniTasa.

Despite the high degree of activity in the sector at the moment, with increases of around 5%, it is not uncommon for people to buy a home now for less than it would have cost in 2008. In 2017, house prices were 35% below the peaks of the real estate boom, according to a Report about housing Maximums and Minimums prepared by the appraisal company TecniTasa. The situation changes as you approach the hot spots of the main capitals. The difference between the most expensive and most affordable areas of Madrid is 61 percentage points, of Barcelona is 38 points and of Sevilla is 54 points. The most affordable homes in the Andalucían capital are found in the areas of Amate/ Pino Montano/Macarena Norte and Bellavista (€990/m2), nevertheless, it is one of the few areas where prices are higher than they were a decade ago (up by 24%). It is followed by La Rambla de Pedro Lezcano in Telde (Las Palmas) where prices have risen by 9.7%; the centre of Orense (5.7%); Las Gándaras (Lugo), where prices have risen by 4.4%, and the historic centre of Toledo (1%).

The fact that the most luxurious homes are still 30% cheaper than they were in 2008, on average – on c/Serrano and Paseo de Gràcia, they exceed €9,000/m2 – and the most affordable homes are still 40% lower – in El Pilar de la Estación (Toledo) and Barrio Guinea (Castellón), they cost around €400/m2 – “is one element to take into consideration when making a purchase decision”, explain sources at the appraisal company.

Original story: Expansión (by I. Benedito)

Translation: Carmel Drake

CBRE: New House Prices Are Soaring In Spain’s Large Cities

22 June 2017 – Idealista

New homes are becoming an “endangered species” in the real estate market in Spain’s large cities and along the coast. The increase in demand versus the shortage of supply means that prices are rising by more than the average growth rate of 4%-6% in capital cities such as Madrid and Barcelona, according to the forecasts published by CBRE for 2017. In addition, despite the greater increase in construction activity, the gradual rise in the value of buildable land is having an effect on the final price of new homes.

According to the residential report from CBRE for 2017, the average price of homes in Spain will grow during the course of this year by between 4% and 6%, although in some markets, such as in the large cities and along the coast, the increase in house values will be greater, given the demand-side pressure.

“Although the recovery in the residential market is not leading to significant tensions in terms of house prices at the national level, sharp rises are being seen in the price of new homes in certain local markets with high demand and a very limited supply of new homes”, said Samuel Población, National Director of Residential and Land at CBRE.

New housing is starting to become scarce in markets such as Madrid and Barcelona, as well as in areas along the coast such as Alicante and Málaga, despite the fact that the construction of new homes is being concentrated in these capital cities. The report warns that the current levels of construction are not going to be sufficient to absorb the demand for these types homes over the next two years.

CBRE calculates that this demand amounts to between 120,000 and 140,000 units per year, whereas in recent years, an average of around 51,000 homes have been completed per year. Moreover, the number of housing permits being granted still falls below the threshold of 80,000 homes per year.

“There is potential for the construction of new homes, given that the building rates for the next 2 or 3 years are unlikely to cover the entire demand”, explained Samuel Población. “The increase in the construction of homes in areas such as Madrid, Barcelona, Valencia, Costa del Sol, the Balearic Islands and País Vasco, is key to containing the inflationary trends in prices”, he added.

Controlling the increase in demand for buildable land

(…). According to data from the Ministry of Development, the average price of urban land in provinces such as Madrid, the Balearic Islands and Málaga amounted to 27%, 36% and 40%, respectively, of the historical series (which ranges between the maximum and minimum in the period 2004-2016) in the fourth quarter of 2016. “This suggests an intensification in demand for land in these locations”, said sources at the consultancy.

CBRE warns that in the last few months of 2016 and the first months of 2017, the market for land saw more activity and the number of transactions involving urban plots of land rose by just over 10% in 2016 with respect to 2015 (…).

Original story: Idealista (by D. Marrero)

Translation: Carmel Drake

Residential Investment: Which Are The Most Profitable Districts?

30 May 2016 – Expansión

Madrid and Barcelona are pulling the real estate wagon. The recovery is happening at two speeds, at least. On the one hand, house prices are rising in the large cities, where sales volumes are also increasing significantly, rental prices are growing, non-residential investment is on the up and there is a shortage of land available for sale.

Most of this improvement in due to underlying macroeconomic trends, but not all of it. The impact of private investors is playing a crucial role in the strengthening of the two large real estate regions, whose central areas are the most sought-after by investors, both businesses and individuals, and Spaniards and foreigners alike.

The prime districts of the Madrid and Barcelona offer the highest rental yields for those looking to buy homes as investments. If we also include the appreciation that these properties are experiencing in terms of price, then the total return on these homes exceeds the 10% threshold.

That is according to a report about rental yields, by district in Madrid and Barcelona, prepared by Fotocasa.

The analysis of the Madrilenian capital concludes that the districts that spark the most interest for rented housing are: Centro, Carabanchel, Tetuán, Puente de Vallecas and Latina. They currently offer an average yield of 6%, almost one percentage point higher than the average return in Spain, which stands at 5.3%. The yields offered from rents in these districts range from 4.9% in Centro to 7.4% in Puente de Vallecas.

In Barcelona, the gross yield from buying a home and putting it up for rent (excluding capital gains) is 5.3%, in line with the national average. The districts that are most sought-after by investors in Barcelona are: L’Eixample, Sant Martí, Ciutat Vella and Gràcia, which are currently generating an average return of 4.7%, i.e. 1.3 points below the yield being offered by an average home in the most sought-after areas of Madrid. In any case, the prime returns range between 4.2% in L’Eixample and 5.3% in Ciutat Vella. (…).

Double-digit price rises

In terms of prices, nine of the 10 districts in the Catalan capital recorded double digit increases in 2015. “Within the last few months, we have seen unheard of increases in rental prices in the city of Barcelona. Whilst historically, the Madrilenian district of Salamanca was the most expensive place to rent a home in Spain, now that ranking is led by the Catalan district of Ciutat Vella, after prices there rose by more than 20% YoY. In fact, Ciutad Vella is currently 11% more expensive than the Madrileñian district of Salamanca”, said Beatriz Toribio.

“The high demand for rental housing in the most central areas of the city, and the limited supply of homes, are combining to cause rental prices in Barcelona to rise to record breaking levels. They are even causing rental prices in less central areas, such as Sant Martí and the district of Horta Guinardó, to see double-digit YoY increases in rental prices”, added Toribio.

The most sought after rental properties in Madrid are smaller than the most sought after properties for purchase. Whilst to buy, the average home measures 80 sqm and has two or three bedrooms; to lease, the average home has a surface area of 57 sqm and two bedrooms. The same thing is happening in Barcelona: the average home to buy measures 80 sqm, and has between two and three bedrooms. Nevertheless, to rent the average house size is 60 sqm with two bedrooms.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

Tinsa: House Prices Rose By 2.2% In Q1 2016

14 April 2016 – 20 Minutos

House prices rose by 2.2% during the first three months of the year. According to Tinsa, the price of flats and houses increased by 0.8% in March with respect to the same month last year.

The appraisal company considers that the average price of homes in Spain is following a “moderate” positive trend for the time being – in other words, it is increasing moderately -. The cumulative decrease since the peaks of 2007 amounts to 41%, according to Tinsa’s IMIE General and Large Markets Index.

By geographic region, the Balearic and Canary Islands, and Mediterranean Coast recorded YoY price increases of 4.3% in March in both cases. Prices rose less sharply in metropolitan areas, with a YoY increase of 2.8%. By contrast, house prices decreased in March in other towns (-1.6%) and in capital and other major cities (-0.3%).

On a cumulative basis since January, the largest increase in house prices were recorded in the Balearic and Canary Islands, with growth of 5.1%. They were followed by price rises in other towns (+3.4%), the Mediterranean Coast (+3.1%), metropolitan areas (+2.2%) and capitals and other major cities (+0.6%).

Since the peaks of 2007, house prices have decreased by 41%. The Mediterranean Coast is the area where prices have decreased by the most (-46.5%), followed by capitals and other major cities (-45.1%), metropolitan areas (-43.8%), other towns (-36.1%) and the Balearic and Canary Islands (-29.1%).

Original story: 20 Minutos

Translation: Carmel Drake

Funds Will Invest €2,000M In Shopping Centres In 2015

7 July 2015 – El Economista

Shopping centres are still the star asset in the real estate sector; and experts forecast that this year will see the second largest investment volumes of all time.

According to Pelayo Barroso, Director of Business, Analysis and Market Research at the consultancy Aguirre Newman, transactions amounting to €2,000 million will be closed during 2015. This figure is spurred on by the arrival of institutional funds specialising in this kind of asset.

“We do not expect the investment volumes seen in 2014 to be repeated – €2,500 million was invested in around 30 transactions. That was an exceptional year, but the forecast figures for this year are still very strong”, says Barroso.

It is worth noting that in 2013, total investment amounted to just €700 million, whereas during the year to date, transactions have already been closed amounting to more than €900 million. (…).

Centres up for sale

According to Aguirre Newman’s forecasts for the second half of the year, transactions worth €1,000 million will be closed, as a result of the sale of around 15 shopping centres, which are currently on the market. Moreover, Barroso explains that even though some assets are not officially on the market, “their owners are open to offers”.

The shopping centres that may be sold are “located in regional capitals and large towns”, which is just what investors are looking for. He adds that these assets are not only located in Madrid and Barcelona, they can also be found in cities such as Bilbao, Sevilla and Valencia.

In terms of the type of investor interested in these assets, the Socimis will continue to play an important role. The creation of several Socimis in a relatively short space of time and their need to invest within a relatively short timeframe, meant that they accounted for 24% of total investment volumes in 2014, according to data from Aguirre Newman.

Similarly, the arrival of overseas institutional investors with vast specialist experience in the sector has driven a lot of investment; these players accounted for almost 73% of total investment volumes last year.

Both Socimis and institutional investors have a long-term vision, explains Barroso. In this sense, he stresses that their objective is to optimise centres, reposition them and earn rental income from them. “They are not going to do what the funds that purchased shopping centres in 2012 and 2013 did, when they entered the market, only to exit again two years later.

In terms of the yields that these investors are looking for, the director explains that the returns on prime centres range between 5% and 5.5%. Whilst for secondary centres, yields start at around 6.5%.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake