Activity Abounds In Spain’s Second-Hand Home Market

13 September 2017 – El Confidencial

Second-hand homes are the undisputed star of the Spanish residential market. Despite the fact that the volume of transactions involving second-hand homes plummeted following the burst of the real estate bubble, they now account for 8 of every 10 sales closed in Spain. In addition, more second-hand homes were sold during the first seven months of this year than between January and July 2008. The renewed appetite for these types of homes has resulted in an upwards rally in prices. In fact, over the last year, prices registered their highest increase for the last 10 years.

There are several factors behind this furore. Even though the construction of new properties has grown in recent months, it is not sufficiently voluminous to meet demand, which, having overcome the crisis and after emerging from its lethargy, now wants to purchase. Moreover, the gap in prices between both types of homes (new and second-hand) has led many buyers – including investors – to opt for second-hand homes.

According to data from the notaries, the square metre of a new build home is €569/m2 more expensive, on average, than of a second-hand dwelling. At the national level in June, the average price of a second-hand home amounted to €1,478/m2, whereas that of a new build residence stood at €2,047/m2 (…).

The sale of second-hand homes hit rock bottom in 2012 when 160,000 units were sold, compared with almost 450,000 in 2007. Nevertheless, with the exception of 2009 and 2010, more second-hand homes are always sold than new builds. In 2008, the first year after the bubble burst, the figures about equal. But, a definitive gap emerged again in 2015, to the extent that last year, 8 out of every 10 homes sold in Spain were second-hand.

Prices rise by 5% in one year

This buyer appetite has had an immediate impact on prices. During the month of August, prices rose by 4.9%, the greatest YoY increase in the last 10 years. As such, the average price per square metre now amounts to €1,708/m2, according to data from Fotocasa (…).

Once again, the behaviour has been very irregular throughout the length and breadth of Spain. There were significant increases in the Balearic Islands (16.2%) and Cataluña (11.6%), the only autonomous regions that saw prices rise by more than 10%. They were followed by price rises in the Canary Islands (5.6%), Andalucía (5.4%), Castilla-La Mancha (4.7%), Madrid (4.2%) and Extremadura (3%).

Nevertheless, we should not forget that the decrease in house prices from their peaks is still very significant across the vast majority of the country. The average price of second-hand homes in Spain has recorded a cumulative decrease of 42.2% since the peak of April 2007 (€2,952/m2). In this sense, 11 autonomous regions still record cumulative decreases of more than 40% compared to the maximum prices recorded nine years ago. They are led by La Rioja (-56.8%), and followed by Navarra (-53.8%), Aragón (-51.4%), Castilla-La Mancha (-51.3%), Murcia (-49.4%), Asturias (-46.8%), the Community of Valencia (-45.7%), Cantabria (-43.1%), Cataluña (-42.1%), Madrid (-40.9%) and Extremadura (-40.6%).

“Meanwhile, the housing market is registering levels of activity that we have not seen for 10 years, as a result of the improvement in the economy and employment, as well as of a return of confidence to the sector (…)”, explains Beatriz Toribio, Head of Research at Fotocasa. Nevertheless, Toribio points out that “despite the chunky growth in the number of mortgages, transactions and prices, the sector is still at much lower levels than during the golden years” (…).

General increases in Madrid and Barcelona

Madrid and Barcelona, two of the most active markets from a real estate perspective are by no means unaffected by the rise in the prices of second-hand properties. Prices rose in 19 of the Spanish capital’s 21 districts in August (…). In terms of the most expensive and cheapest districts, Salamanca is the most expensive for buying a home, with a price of €4,923/m2. It is followed by Chamberí (€4,681/m2), Centro (€4,453/m2) and Chamartín (€4,448 /m2). At the opposite end of the spectrum, Villaverde is the most affordable district for buying a second-hand home, with an average price of €1,518/m2.

Meanwhile, in Barcelona, house prices rose in seven of the 10 districts analysed by Fotocasa in August (…).

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

Tinsa: Appraisal Values Rose By 3.6% Across Spain In May

7 June 2017 – Expansión

The appraisal value of homes rose by 3.6% in May, according to the appraisal company Tinsa. This increase was primarily due to the good times being enjoyed in the sector in Spain’s major cities and provincial capitals, which saw price rises of 6.1%. This shows that the most populated areas are the regions experiencing the greatest buyer impetus, which are, in turn, boosting the main residential sub-markets, above all in Madrid and Barcelona.

“Prices are rising a lot, it’s true”, said José Luis Ruiz Bartolomé, Partner at Chamberí AM. “The rises are being concentrated in certain areas in which there is a risk of the market heating up again because there is little land. It is already happening in Madrid and Barcelona”. But, is there a risk of a bubble? “Not yet”, he answers.

Sources at Tinsa agree, given that its latest forecasts show that house prices will rise by 2% this year, according to Jorge Ripoll, Direct of Research at Tinsa, who recently spoke to this newspaper.

Each month, the IMIE index, which is calculated on the basis of house appraisals performed by the company, reflects the YoY variation in the value (per square metre) of residential properties and its level with respect to the year 2001 (base 1,000). The 1,387 points in the general index reached in May “reveal that the average price in Spain has returned to its December 2013 level”, according to data from the appraisal company. If we compare this with the previous cycle, before the outbreak of the crisis, house prices now are equivalent to those last seen in September 2003.

After the capital cities and Mediterranean Coast, the YoY growth seen in the Balearic and Canary Islands (2.9%) also stands out. The two island regions were the forerunners of the recovery, but now they are experiencing moderate growth rates, which indicates that they could be close to reaching their cruising real estate speeds.

They are followed closely by smaller towns (+2.2%), which are grouped together in the Index into a category that Tinsa calls “Other towns”. Meanwhile, the metropolitan areas saw prices remain relatively stable compared to May 2016, recording just a slight decrease of just -0.3%.

House prices are still reducing the gap generated since the end of 2007. The cumulative price decrease still amounts to 39.2%, according to Tinsa’s statistics. On the Mediterranean Coast, the area that has been hit the hardest over the last 10 years, the cumulative decrease still amounts to 45.6%, just one point higher than in the metropolitan areas, where prices have fallen by 44.5% on average since their peak. In the capitals and major cities, the cumulative decrease amounts to 41.3%, just above the national average. Homes on the Balearic and Canary Islands have depreciated by 27.7% over the last ten years and those in other towns have fallen by 35.9%.

Inflationary fears

But, even though prices in the residential market are still well below the levels seen during the bubble, inflationary fears are returning. “Players are afraid of coming last and there is a shortage of land, so property developers are buying up plots so as not to miss out”, said Ruiz Bartolomé (…).

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

Fotocasa: Rental Housing Prices Rose by 1% In May

29 June 2016 – El Economista

The average price of rental housing in Spain rose by 1% in May, to €7.36/m2/month, placing rental prices at levels not seen since October 2012 (€7.38), according to the latest data from the real estate portal Fotocasa.

In YoY terms, rental prices rose by 5% in May, the steepest increase since January 2006, when began to compile these statistics.

The monthly increase in rental home prices recorded in May continues the trend recorded during 2015, the year when rental prices began their recovery after eight years of widespread decreases.

In monthly terms, rental prices increased in 15 autonomous regions in May, meanwhile, in YoY terms, they rose in every Spanish region.

“The rental market is slowly gaining ground in Spain. Despite the re-opening of the credit tap and the marked decrease in prices, there is still a very significant segment of the population that cannot afford to buy a home and is therefore forced to rent. Higher demand, together with the high returns that this market offers, are causing a widespread recovery in prices across the country”, explained the Head of Research at, Beatriz Toribio.

Since rental prices peaked in May 2007 (at €10.12/m2/month), they have recorded a cumulated decrease of -27.2%. In this sense, four autonomous regions have recorded price decreases of more than 30% since their maximums five years ago.

Aragón is the region where residential rental prices have decreased by the most (by -40.2%), followed by Castilla-La Mancha (-35.3%), Cantabria (-34.9%) and Comunidad Valenciana (-30.3%).

Price rises in 15 autonomous regions

By autonomous region, price rises were recorded in 15 regions in May, with the increases ranging from 3.9% in the Balearic Islands to 0.1% in Cataluña and La Rioja. Meanwhile, prices remained stable in Navarra and fell by -0.1% in Aragón.

In terms of the price ranking, Madrid (€10.29/m2/month) replaced the País Vasco (€10.18) and Cataluña (€10.23) as the most expensive region to rent a home. At the opposite end of the spectrum, Extremadura (€4.53/m2/month) and Castilla-La Mancha (€4.69/m2/month) are the two regions were rental prices are most affordable.

Original story: El Economista

Translation: Carmel Drake