Tag: coastal areas

Savills Aguirre Newman: House Prices Will Rise by 5%-8% in Málaga in 2018

22 March 2018 – 20 Minutos

The average price of housing in Málaga rose by 5.4% in 2017, according to the Residential Market report published by the international consultancy firm Savills Aguirre Newman, which also predicts that house prices will rise by between 5% and 8% this year.

The report reveals its forecast for this year is that prices will continue their growing trend thanks to the “strong behaviour of demand”. In 2018, the increase in property development activity and the construction of new promotions are going to continue to increase, which means that new residential areas in Málaga are going to be consolidated; this is already happening in the Martiricos area.

In terms of the main players in the residential market in Málaga, during 2018, the consolidation of financial institutions and servicers will continue, as it will of international funds with a vocation for making long-term investments.

For José Luis Sanz, the deputy director of Savills Aguirre Newman’s delegation in Andalucía, the residential market in Málaga has evolved “in a positive way, offering more modern and efficient projects, and with a clear focus on design and quality”.

Moreover, he added that the entry of international groups into the market has benefitted the sector. Currently, the product offered/demanded is a type of home that is characterised by, on the one hand, open plan spaces with large terraces in coastal areas, and, on the other hand, vertical designs that make efficient use of the available space in more urban areas.

The report analyses 113 developments in total, of which 82 are being marketed (…) and 31 have already been sold. The study counted 54 new promotions and, for the third year in a row, reported that no developments have been suspended or removed from sale.

The main areas of growth for new housing in Málaga are Teatinos and Pacífico (…).

“It is important to highlight the dynamism of the land market in the capital”, said Sanz, who added that “Over the last year, there have continued to be numerous, significant transactions involving residential land both in the Málaga metropolitan area, as well as in the neighbouring districts, such as Alhaurín de la Torre, Rincón de la Victoria and in the Churriana district of the capital” (…).

2017

Last year, the average price of a home in an apartment block in the province amounted to €216,713, whilst the average price of a family house stood at €274,420.

In Málaga, the split by type of home is 78% homes in apartment buildings and 22% family houses. This increase in prices takes the average price per m2 of a flat/apartment to €1,727, with an average surface area of 125 m2, whilst the average price of a family home now stands at €1,616, with an average surface area of 170 m2.

With these average prices, the highest price recorded for the sale of a home in an apartment building in the Málaga-East area amounted to €820,000 (€5,622/m2) and in the centre amounted to €1,350,000 (€5,555/m2). In terms of family homes, a property was sold also in the Málaga-East area for €1,175,000 (€2,937/m2) according to Aguirre.

Original story: 20 Minutos

Translation: Carmel Drake

INE: House Sales Soared by 23% in January

15 March 2018 – Expansión

The real estate sector is aiming high in 2018 off the back of the economic recovery. Having surpassed the barrier of half a million homes sold in 2017 and whereby made a return to pre-crisis levels, in January, house sales soared by 23% YoY, to reach 47,289 units. It is the best data for a decade, since May 2008, according to the latest data published by INE. That, combined with the 4.5% recovery in prices in February, as estimated by Tinsa’s price index, indicates that the time is ripe for consolidation in the sector. “The consolidation of credit, the improvement in the economic context and the strong outlook for the sector and the economy, in general, explain this reactivation in demand for housing”, explains the Head of Research at Fotocasa, Beatriz Toribio. With respect to December, sales in January soared by 46.8%.

Forecasts for the real estate sector point to increases of 5% in terms of prices and 10% in terms of sales, in line with the forecast evolution of the Spanish economy. Even so, the number of operations recorded is still well below the more than 100,000 homes sold per month in the years prior to 2008, when the real estate bubble burst. Prices have also continued to recover, and whilst in the centre of some cities, they have now recouped their losses, there are still many areas of the country where house prices today are 65% lower than they were in 2007.

On the one hand, the large capitals and coastal areas are leading the increases in prices, boosted by interest from investors, the tourist boom and a shortage of stock and of new homes. In fact, the overheating of prices in many areas is leading to a displacement of demand towards less central areas of those cities.

In terms of sales, the 23% increase is backed by double-digit growth in 13 autonomous regions. Asturias, the Community of Valencia and Murcia lead the rises, with increases of 56%, 40% and 39%, respectively. Nevertheless, only Valencia remained in the top 3 in absolute terms. That community was, after Andalucía, the one where most house sales were recorded in January (7,409 units). Andalucía was the area where most homes were sold, 8,988 units, up by 31% compared to January 2017. The third region on the podium was Cataluña, which recorded 7,334 sales, although at a rate that was well below the average, of 8%. In this regard, Toribio said that although “the political situation may have slowed down activity in the Catalan real estate market, it has not paralysed it completely”.

Meanwhile, in Madrid, 6,526 homes were sold, up by 14%. Together with Cataluña, La Rioja, Aragón and Extremadura recorded the lowest increases in transaction numbers, up by 8%, 5% and 1%, respectively. The geographical differences expand further as you zoom out of the photo. By province, Álava grew by the most (56.5%) and several provinces saw their sales figures fall. Specifically, in Ciudad Real sales decreased by -19.4%, in Zamora by -10.3% and in Badajoz by -7.4%.

The composition of that growth was also uneven by segment, with a clear predominance in terms of second-hand housing. Of the total number of transactions, just 8,272 were new homes, compared to 42,745 second-hand properties, in other words, 17.5% of the assets sold were new and 82.5% were second-hand. Nevertheless, both segments are evolving in parallel, with growth of 23.5% for new homes and of 23% in the case of second-hand dwellings.

Original story: Expansión (by I. Benedito)

Translation: Carmel Drake

BBVA Research: Madrid & Balearics Led Spain’s House Price Rises in 2017

6 March 2018 – Expansión

House sales data for 2017 and the ongoing increases in house prices augur a year of consolidation for the real estate market in 2018, according to BBVA Research, which published its Real Estate Observatory report yesterday.

Nevertheless, this trend is happening with geographical variations. Madrid and the Balearic Islands are leading the price rises, with increases of 6.9% and 6.5%, respectively, to €2,355/m2 in the case of Madrid and €2,205/m2 in the case of the Balearic market. Those increases amounted to more than double the national average, of 3.1%, with the average price per square metre rising to €1,559/m2.

In 2017, Spain surpassed the symbolic barrier of 500,000 homes sold. Specifically, the year ended with 532,726 operations, according to data from the National Council of Notaries. That increase, of 15.6%, is even greater than the growth recorded in 2016 (14%) and is supported by: the confidence of households in the Spanish economy; the increase in rents thanks to the growth in employment; and the improvement in financing conditions.

The improvement in financing conditions is reflected in data for January when new loans for the acquisition of homes soared by 19.4%. “Thus, the market is expected to continue to perform positively over the next few months”, said the Research Department at BBVA.

But the market is still evolving at different speeds, depending on the autonomous region. In fact, only four regions have prices per square metre that exceed the national average. Besides Madrid and the Balearic Islands,  they are País Vasco, which has the most expensive average house price per square metre in Spain, exceeding even Madrid (€2,387/m2, up by 1.3%) and Cataluña (€1,892/m2), which occupies fourth place, after recording the third highest rise.

The increase in Cataluña was higher than the average, but “it was less intense than in the third quarter of 2017”, said BBVA Research. That circumstance coincides with the secessionist crisis, which has also led to a paralysis in terms of investment and a decrease in the number of tourist visits.

On the other hand, houses got cheaper during the last quarter of 2017 in La Rioja (-1.8%), Castilla y León (-1%), Castilla-La Mancha (-0.8%), Galicia (-0.4%) and Aragón (-0.1%). In some of those autonomous regions, the lowering of house prices may be influenced by the phenomenon of depopulation and the rising demand in large capitals and coastal areas.

Following an 11.6% decrease in the number of permits approved in November, the granting of permits to start new homes performed positively in December, with an increase of 5%, to 6,096 permits.

This increase favours the evolution of the real estate market in a scenario in which the large cities are facing demand that exceeds supply and there is a limitation on land development. In 2017, the number of new home permits amounted to 80,786, which represented an increase of 26.2% compared to 2016.

Original story: Expansión (by I. Benedito)

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

Brexit Will Hit Spain’s Coastal Housing Market

27 June 2016 – El Mundo

The tremors of the international earthquake caused by Brexit, i.e. the victory of the “Yes” campaign in the United Kingdom’s referendum to leave the European Union (EU), will also be felt in the Spanish housing market. Especially in coastal areas, which are so dependent on British demand. The effects are yet to be measured, but all signs are that the UK Goodbye will overshadow the domestic property sector, at least in the short term.

Until now, the consequences of the possible Brexit, now a harsh reality, had been limited to a slowdown in the number of transactions and the signing of SPA contracts with annulment clauses to be invoked in the event that the United Kingdom left the EU, according to Santiago Sánchez, managing Partner at Engel & Völkers (E&V) in Torrevieja and Orihuela. (…).

“In addition, the new international environment may cause Brits to sell the homes that they already own in exchange for euros. And as we know: more supply and the same or less demand, decreases prices”, warns Sánchez, who acknowledges that the market had assumed the opposite outcome from the vote. “We were expecting a boost in activity following a “No” Brexit vote and for all of the built-up demand to be able to go ahead and make purchases, however…”, he laments.

For Sánchez, nevertheless, the problem that will penalise the housing market the most will be the bureaucractic aspects. “If the United Kingdom leaves the EU, it will become much harder for British citizens to settle down in Spain. They will have to request residence and work permits, take out private health insurance, and they don’t know what will happen in terms of inheritance and gifts, etc”, he said. In any case, the head of E&V believes that Brits will continue to weigh up the appeal of living in Spain. “I think that they will keep buying homes because they want to retire here”, he said.

On the other hand, most economists and real estate experts consulted agree that Brexit is bad news for the recovery of the (housing) sector in Spain, which had been started to gain strength, including along the coast. And it is precisely in the coastal regions where the United Kingdom’s departure from the EU will cause the most negative effects, given that Brits account for 21.3% of house purchases by foreigners, and the vast majority of those purchases are made by the sea. The experts are certain that the devaluation of the pound and the on-going uncertainty will weigh down on this buoyant purchasing activity, both at home and overseas. (…).

Meanwhile, Gonzalo Bernardos, Economist and Director of the Real Estate Masters at the University of Barcelona, is much more positive than his colleagues, and offers a Brexit analysis with a broader outlook. “In light of this emergency situation and to avoid a catastrophe on the markets, I think that the European Central Bank (ECB) will inject a lot of liquidity into the market, which means the banks will have more credit and that will drive the Spanish economy and, therefore, the housing market”, he said. “The current neoliberal EU will be completely redesigned and there will be a major reorganisation of the union to prevent any other country from leaving. We will say goodbye to the strict deficit demands for individual countries. In the case of Spain, the fine that was going to be levied on us, will become worthless”, he said. (…).

Original story: El Mundo (by Jorge Salido Cobo)

Translation: Carmel Drake

Speculation Returns To The Market For Land In Madrid & Along The Coast

11 April 2016 – ABC

During the years of the crisis, investors regarded land as one of the least attractive assets. In fact, in the face of scarce demand and the paralysis in the construction sector, land values fell to historic lows. (…).

Sales of urban land, the substratum of real estate developments, are growing again after nine years of consecutive decreases. And they are doing so at a healthy – and on occasion, vertiginous – rate in certain areas of the country where the housing market has already started its recovery, such as the more illustrious areas of major cities, including the north of Madrid and established areas along the coast (Málaga, Palma de Mallorca and the Canary Islands). So much so that a warning is now spreading amongst analysts and agents in the sector: the scarcity of developable land – which does not require land planning approval – in certain areas, and renewed interest from investors is generating a new “overheating” in the price of transactions, something not seen since the burst of the real estate bubble.

The latest “Market Trends” report prepared by Solvia, the real estate arm of Banco Sabadell, warns that the expectation of a strong recovery in value is incubating operations of a speculative nature. “The fact that the supply of well-located land is scarce in areas with demand, that there is widespread liquidity in the market and that there is fierce competition to acquire assets, means that land purchases are being made for speculative purposes, in certain specific cases, for subsequent resale at significantly higher prices”.

In this sense, the study, which does not cite who is behind such transactions, highlights the cases of the Madrilenian neighbourhoods of Valdebebas and Montecarmelo. In the case of the latter, the price of land has risen by between 40% and 60% to €2,400/m2.

Montecarmelo and Valdebebas

Fernando Rodríguez de Acuña, Director General of Operations at the consultancy firm RR de Acuña y Asociados distinguishes between three players in the race for land: the financial entities and large investors, who have put their assets up for sale “in stages” and the small and medium-sized funds, which are more prone to speculative operations given that they seek high short-term yields. The confluence of these players has given rise to a situation in which both the activity and value of these real estate assets have increased significantly, if we exclude the statistical effect of operations carried out by financial entities foreclosing unpaid debt. Thus, the number of transactions carried out by operators in the sector (developers, funds and cooperatives) increased by 37% in 2015 compared with the year before and by 60% in terms of transaction volume. (…).

According to the experts, two operations in particular have caused prices in the land market in the Spanish capital to sky-rocket: firstly, the sale of 14 plots containing more than 93,000 m2 of buildable space, by the Valdebebas Compensation Board to the property developer Pryconsa for more than €55 million and secondly, the acquisition of a plot of land in Montecarmelo by Cogesa, which belongs to the Dragados group, for more than €20 million. (…).

Original story: ABC (by Luis M. Ontoso)

Translation: Carmel Drake

Tinsa: Coastal House Sales – Marbella & Málaga In Top 5

12 June 2015 – El Mundo

Marbella and Málaga were ranked fourth and fifth in the national coastal real estate market for house sales in Spain in 2014, with 3,997 (+28.7% YoY) and 3,947 (+25.4%) homes sold in each municipality, respectively, according to the latest report from Tinsa (the real estate valuation and advice company), which contained data relating to forty Spanish towns.

The first three in the ranking were: Barcelona (12,819), Valencia (6,474) and Torrevieja (4,136). (…)

In addition, Mijas and Estepona, with more than 2,000 transactions each, also sat near the top of the national list, if we exclude provincial capitals.

In line with the recovery that is happening at the moment on the Costa del Sol, and according to data from the Ministry of Development, Torremolinos and Benalmádena are also performing extremely well, with growth rates in terms of house sales of 70% and 55%, respectively, in 2014 compared with 2013. Those figures place them in the ‘top 4’ in terms of percentage increase in activity.

According to the findings of this report from Tinsa, entitled “Homes on the coast”, “the markets with the greatest presence of international buyers are those where prices have stabilised first”.

On the basis of this and other data, the technical network of the entity that prepared the study, also cites “areas of recovery” on the Andalucían coast between Marbella and Benahavís,. Furthermore, “it detects signs of improvement” in Rincón de la Victoria, Nerja and around Manilva, Estepona and Casares, as well as in other towns in the Andalucían region. In the latter, prices have decreased by 61.5% from their peak, the largest decrease in the national study.

Original story: El Mundo (by Francis Mármol)

Translation: Carmel Drake

Fitch: House Prices Are Bottoming Out

24 March 2015 – Idealista

…but no rapid rises are expected.

The ratings agency Fitch considers that the decrease in house prices in Spain is coming to an end, but warns that the recovery will be slow. According to the company, one of the main reasons for the improvement in prices is the return of mortgage lending.

Fitch says that Spain faces a slow recovery in the housing market. It considers that prices have practically bottomed out, but rules out any rapid price increases. In fact, it points out that the high level of unemployment, together with the high supply of unsold homes constructed between 2006 and 2007, are two of the factors that will prevent a rapid rebound in prices.

It recalls that house sales increased by 19.6% year-on-year in 2014, according to data published by INE, but that despite that, the number of homes sold amounted to less than half the sales recorded in 2007. The agency expects the number of house sales to increase to move than 400,000 homes this year.

But it also believes that there will be a two-speed recovery. The slowest recovery will be seen in coastal areas and on the outskirts of large cities where there is a larger supply of homes. By contrast, in the centre of large cities, such as Madrid and Barcelona, prices will increase.

Original story: Idealista

Translation: Carmel Drake