10 May 2016 – Fotocasa
The Director of Madrid’s Real Estate Fair (SIMA), Eloy Bohúa, praised the “good” impressions in the real estate sector at the start of the 18th Fair, which he considers will serve as “confirmation of the recovery”.
With more than 200 exhibitors, 25% more than last year; a larger surface area, up by 30%; and more diverse international presence, with exhibitors from 12 countries, SIMA began with a “good prospects”, boosted by positive feelings at the Investment Forum, the pre-cursor to the fair, which more than 300 people attended. (…).
Bohúa explained that 2015 was the year of recovery, although the first signs of recovery were actually seen in Autumn 2014. He expects the “confirmation” of the recovery to be seen this year, but said that “we must be cautious and ensure that the sector does not repeat the same mistakes of the past”, something that “is present in everyone’s minds”.
During the opening of SIMA 2016, the acting Ministry of Development, Ana Pastor, observed that the real estate fair was “busier than ever”, and noted that data in the real estate sector “is continuously improving”.
In this vein, she said that growth in the sector amounted to 4.5% in 2015 and that 50,000 jobs were created in the sector last year (…).
This recovery was reflected at SIMA in data such as the supply of properties at the fair, which this year depended less on the Community of Madrid than in previous years. Whilst in recent years, it was customary for the supply in Madrid to account for 60% of the total supply at the fair, this year that figure amounted to less than 50%.
In addition, for the first time since the burst of the real estate bubble, the supply of off-plan projects for sale at SIMA exceeded the number of turn-key products, in such a way that the proportion of new projects to property developments (stock) this year was 60%:40%.
68% of the developments marketed at the fair relate to primary residences, of which 83% are unsubsidised and 17% have some kind of protection/subsidy; the remainder are holiday homes.
Markets operating at different speeds
In terms of the stock left in Spain, Bohúa explained that it is different in major capitals, where the recovery first started, given that there “sales are growing”, and the stock “is being drained off very quickly”. By way of example, he said that he estimates that around 5,000 new homes are left, which means the stock will run out within eight months.
And in the major capitals, there is “minimal stock that is not significant in terms of the market”, which is why Bohúa thinks that “now is the time to start new projects in response to a thriving demand”.
Other areas of the Peninsula are experiencing a different situation – particularly where the recovery is happening “more gradually”, i.e. in smaller population nuclei. In the holiday home segment, there is “a lot of activity and a great deal of interest from buyers and investors” in certain areas, such as along the Costa Blanca and the Costa del Sol, but again “the stock is not being absorbed at the same speed along the entire coast”, which means there the markets are operating “at different speeds”.
Investor appetite continues despite uncertainty
Regarding the possibility that the political uncertainty may affect real estate investments and purchase decisions, Bohúa acknowledges that uncertainty affects all economic sectors and “we are seeing slow downs and delays in decision making, but that is only natural because investors want certainty”.
Nevertheless, he said that investor appetite is “still high”. (…).
“There is no risk of investors fleeing from Spain because the fundamentals of the Spanish economy are in place”, he said. (…).
Original story: Fotocasa
Translation: Carmel Drake