Ministry of Development: House Sales Totaled €74bn in 2017

29 May 2018 – Idealista

The housing market in Spain is moving increasingly higher volumes of money, boosted by the improvement in the economy and the increase in prices in the real estate sector.

According to data from the Ministry of Development, last year, private home sales amounted to €73.849 billion, a figure that exceeds the amount recorded a year earlier by 21%, and which represents the highest volume since 2010 (when sales worth more than €80.6 billion were recorded). In fact, the number doubles the figure recorded in 2013, the ‘annus horribilis’ for the sector, when less than €38.1 billion was registered.

Those almost €74 billion were transacted through the completion of more than 532,000 real estate operations, a data that far exceeds the 458,000 sales registered in 2016 and the 300,500 in 2013.

The second-hand segment was the star of the sector (second-hand homes account for more than 80% of operations), whilst Madrid was the region that accounted for the greatest volume of house transactions (by sales value), followed by Cataluña

Original story: Idealista 

Translation: Carmel Drake

Lar España has already Leased 60% of Palmas Altas Shopping & Leisure Centre (Sevilla)

17 May 2018 – Inmodiario

Palmas Altas is progressing well. More than 60% of the gross leasable area (GLA) in the shopping and family leisure complex, which is owned by Lar España, has already been leased. Specifically, agreements have now been signed to occupy 50 stores, which span 42,581 m2. The shopping centre will have 100,000 m2 of retail and family leisure space in total and comprise almost 150 stores.

The Socimi expects to lease more than 90% of the complex by the end of 2018. Lar España forecasts that Palmas Altas will generate annual rental income of around €15 million from the lease of its stores.

Those who visit Palmas Altas will find an extensive offering of leisure, fashion, household goods, restaurants and entertainment at Sevilla’s largest retail and leisure complex. That will be complemented with public spaces and a lake spanning 6,000 m2. Specifically, 60% of the total surface area will be dedicated to commercial space and 40% to restaurants, leisure, sports and green space.

Lar España has reached agreements with major brands, such as Mercadona, which will manage the complex’s hypermarket, and MediaMarkt, which will open a large store dedicated to the sale of household appliances, IT products and consumer electronics. The leisure offer will include Yelmo’s latest generation cinema screens and an Urban Planet space measuring 3,000 m2, which will include a wind tunnel and aquatic activities around the lake, amongst other options.

In the restaurant area, highlights will include Five Guys, McDonalds, 100 Montaditos, Starbucks and Friday’s, as well as several Andalucian operators. The fashion brands that have already confirmed their presence in Palmas Altas include Primark, Levis, Jack & Jones, Diechmann and Foot Locker (…).

Progress of the construction work

The work to build Palmas Altas, which began in August 2017, has already completed the foundation phase (…). In total, almost 30% of the project has been finished.

The Palmas Altas project will result in the creation of 4,800 jobs. Of those, 1,500 are related to the construction of the retail complex and the remaining 3,300 will be permanent jobs. This represents a significant wake-up call for the economy and creation of jobs in Sevilla: in fact, Lar España prioritises the contracting of local suppliers for the construction and maintenance of its assets.

The total investment in the development of this commercial and family leisure complex will amount to €250 million, which represents the largest urban planning investment in the city in the last decade and the Socimi’s most valuable asset to date.

Original story: Inmodiario

Translation: Carmel Drake

Spain’s First Logistics Megahub will Open in Antequera (Málaga) in 2019

19 April 2018 – Cinco Días

The first logistics megahub in Spain is starting to become a reality almost a decade after it was initially proposed. The entity known as Megahub Andalucía – a public-private initiative – has engaged the consultancy firm CBRE to search for the first major operators ahead of the imminent authorisation of the project that the Junta de Andalucía is expected to grant in June. At stake is €350 million of investment in an industrial hub for the south of Spain and north of Africa, which should be ready by 2019.

Megahub Andalucía is located in the municipality of Antequera (Málaga), in what the European Union calls a multi-modal hub, given that the European Atlantic and Mediterranean railway and road goods corridors meet at this point, the ports of Algeciras, Málaga and Sevilla are all close by, as is the AVE station in Antequera and the airport of Málaga (the fourth largest for cargo transport in Spain).

“Megahub Andalucía is located in the centre of Andalucía with respect to the large populations, both in terms of consumption and production”, says Ramón Vázquez, head of the project at CBRE. The word hub is used because several European transport networks converge on this point and the pre-fix mega has been added, in turn, because the warehouses that are going to be constructed on the plots will extend up to 200,000 m2.

The Junta de Andalucía holds a 40% stake in the company, through Red Logística de Andalucía, and the remaining 60% is held by a private company Puerto Seco de Antequera, which comprises, in turn, several companies, most notably Acotral, a local operator that has been an integrated supplier of Mercadona since 2003.

The Junta is expected to approve the special plan in June, which will allow work to start of the urbanisation of the area, after many years of delays. “The project was launched 10 years ago but has been delayed on several occasions due to urban development problems and due to the crisis. It was conceived as a logistics area and is now being reborn as a logistics megahub”, says the expert at CBRE.

The urbanisation work may begin in June and will have an estimated cost of €70 million, which will be funded by the Junta and the company Puerto Seco de Antequera. Later, around €280 million of funding will be received from investors and operators to build the macro logistics warehouses and production centres. In theory, the megahub should be operational by the end of 2019 or beginning of 2020.

The logistics hub in Antequera spans 3.3 million m2, of which 1.03 million m2 is going to correspond to logistics warehouses. There will also be an industrial park, destined to production activities, measuring 919,000 m2, plus a service centre (comprising a hotel, restaurant, training centre, businesses…) spanning 317,000 m2 and finally a railway terminal, which will connect with the goods station in Bobadilla (owned by Adif).

The project coincides with the huge boom that the logistics market is sparking in Spain, due to the reactivation of the economy, the pull from e-commerce and the needs of the major operators such as Amazon. Last year, more than 1.5 million m2 of logistics space was leased, according to data from CBRE, up by almost 20% (…).

Original story: Cinco Días (by Alfonso Simón Ruiz)

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

Euroval: RE Activity Is Still “A Long Way” Below The Boom Levels

7 June 2017 – Expansión

The real estate appraisal company Euroval has said that real estate activity in Spain is still “a long way” below the levels reached a decade ago.

Specifically, based on data from a simulation that it has performed, Euroval highlights that real estate activity in Spain currently represents a quarter of the level achieved during the real estate boom.

According to the appraisal company, the recent economic crisis “is still taking its toll” on activity in the Spanish real estate sector. In fact, it has highlighted that the number of mortgages granted, the volume of construction revenues and expenses and the number of transactions carried out are still way behind the figures recorded 10 years ago.

By region, whilst in Andalucía, Murcia, the Community of Valencia and Cantabria, for example, real estate activity was operating at 100% in 2004, it is now performing at 13%. Moreover, the autonomous regions that are improving their activity in this sector compared to 2004 are the Balearic Islands (45%), País Vasco (28%) and Navarra and Extremadura (22% in both).

According to Euroval, “there are no known cases of economic sectors in any country representing a similar percentage of GDP as the real estate sector did in Spain at the time of its greatest rise, after which it suffered losses of more than 80% in less than a decade.

The appraisal company considers that the volume of residential appraisals and the supply of housing are the “key” indicators that reflect this decrease. Specifically, in 2006, around 1.3 million appraisals were performed, compared with 625,000 last year.

In 2016, the autonomous region with the highest volume of appraisals was Andalucía, with 129,200. It was followed by Cataluña, with 120,400; Madrid, with 85,300; and the Community of Valencia, with 76,700.

In terms of the housing supply, Euroval’s conclusions highlight the “anomalous behaviour” in terms of housing demand in Spain, given that “despite the significant decrease in prices”, there is still “weak demand in light of the uncertainty surrounding the economy and employment”.

The data from the appraisal company also indicates that this “weak” growth has been concentrated in primary homes above all, which have increased from 15 million units in 2004 to 18 million last year.

The evolution of finished homes used to amount to around 536,600 properties, almost double the number started that year, whilst in 2016, the figures were 50,351 and 34,351 units, respectively. Euroval predicts that the market will tend towards growth over the next two years.

Original story: Expansión 

Translation: Carmel Drake

Oliver Wyman: Mortgage Lending Will Triple By 2020

7 September 2016 – Expansión

Oliver Wyman warns that the banks are once again “relaxing” their criteria for granting home loans.

There is no going back in terms of the re-awakening of the real estate market. All indicators are pointing in favour of a recovery in the sector: GDP is enjoying annual growth of 3.2%, interest rates remain at historically low levels and the banks have started to ease their criteria for lending money in light of the need to give their income statements a boost.

In this context, the consultancy firm Oliver Wyman forecasts that the number of loans granted for house purchases will triple over the next five years to reach 550,000 signings per year by 2020. That figure would be equivalent to the constitution of 1,500 new mortgages per day, up from the current figure of 600 per day.

Behind this recovery in the real estate sector is a forecast acceleration in the creation of new households – the reduction in the level of unemployment will allow, amongst other things, young people to move out of the family home sooner – as well as the demand for homes that has been pent up during the crisis, which could amount to almost 300,000 homes. This last case involves households who have been waiting to buy a property for years, but who have not taken the plunge yet as they wait for the economic environment to improve and the price per square metre to stop falling. (…).

Oliver Wyman considers that its forecast for mortgage signings by 2020 represents the “equilibrium level” for an economy of the size of Spain’s. In other words, according to this company, the signing of 1,500 home loans per day would not result in the creation of a new real estate bubble like the one seen between 2005 and 2007. Between those dates, 1.3 million mortgages were signed in Spain per year: one for every 35 inhabitants.

Nevertheless, the financial consultancy does warn of a number of risks that could damage the local property market. They are linked to the worsening of the economic environment – in part due to the “political instability” that is paralysing the economy – , a sudden increase in Euribor combined with the gradual withdrawal of monetary stimulus at the world level – which would make monthly payments more expensive and which would increase the rate of default – and the granting of more credit to clients with higher risk profiles.

In this sense, the banks are now under pressure to stimulate their mortgage businesses to boost their income statements and face up to the growing competition from new digital agents who are increasingly operating in the sector.

The real estate market is still purging the excesses left over from the first decade of the century. During the second quarter of this year, 20,927 mortgages were foreclosed, which represents a reduction of 27% compared with the same period last year.

Of the total assets foreclosed, 57.1% were homes, and 30.6% of those were primary residences…according to figures published yesterday by Spain’s National Institute of Statistics (INE). In terms of the status of foreclosed homes, 13.6% were new homes, down by 25.1%, and the remainder (86.4%) were second-hand homes, down by 31.2%.

Original story: Expansión (by Victor Martínez)

Translation: Carmel Drake

Tinsa: House Prices Rose By 0.2% In Madrid In Q3

5 November 2015 – El Economista

According to Tinsa, house prices increased by 0.7% during the third quarter of the year with respect to the same period last year in the Community of Madrid, having increased by 1.5% between January and September. Meanwhile, prices in the city (of Madrid) rose by 0.2% during the same period.

According to Tinsa Research’s general index, it takes an average of 7.7 months to sell a home in the Community of Madrid.

The city of Madrid, where average house prices amount to €2,044/m2, is the “most liquid” regional capital of the five large cities analysed, with an average sales period of 6.1 months.

It is followed by Barcelona, where it takes an average of 6.5 months to sell a home.

In terms of the number of building permits granted, the city of Madrid experienced a slight decrease during the first quarter of 2.6% (1,130 permits) with respect to the same period a year earlier.

By contrast, the level of activity in the second-hand home market increased by 18.7% YoY in the second quarter, to 7,678 operations.

According to the data published by Tinsa, in October, the average price of new and second-hand homes in Spain recorded its first YoY increase for more than seven and a half years, with a rise of 0.8% with respect to the same period in the previous year.

From the peaks recorded before the burst of the real estate bubble, average house prices in Spain have experienced a cumulative decrease of 41%.

During October, the Mediterranean Coast, and the Balearic and Canary Islands were the main drivers of house price growth, registering increases of between 3.6% and 4.2% YoY, respectively.

The group comprising the Balearic and Canary Islands recorded the best YoY increase of any region in October, with a rise of 4.2%, followed by the Mediterranean Coast, with an increase of 3.2%.

The regional capitals and major cities experienced an increase of 0.6% and only the metropolitan areas and small towns recorded slight YoY decreases of -0.6% and -0.2%, respectively.

Since the start of the year, average house prices in Spain have increased by 0.4%, and prices have risen by the most in the Mediterranean Coast, and in regional capitals and major cities.

From the peak prices of 2007, prices have fallen by the most in the Mediterranean Coast, with a cumulative decline of 46.7%.

Metropolitan areas, and regional capitals and major cities, have recorded a similar cumulative decrease since 2007, of 44.4% and 44.5%, respectively.

Average house prices in Spain recorded their first YoY decrease in March 2008 and have continued on a downward trend since then.

The rate of decrease began to slow in the second quarter of 2013 and the General Index has remained stable over the last year.

Although the YoY data recorded in October represents a turning point, Tinsa believes that the stabilisation of prices still needs to be consolidated.

Thus, the evolution of average house prices over the coming months will depend on the behaviour of the economy and the labour market, where a considerable amount of uncertainty still exists.

Original story: El Economista

Translation: Carmel Drake

Government: Construction Growth Will Return In 2015

18 February 2015 – www.pisos.com

2014 was the turning point both in terms of residential housing and construction

The construction sector will be an engine of growth for the Spanish economy once again in 2015. Such was the confidence shown by the Secretary of State for the Economy and Business Development, Iñigo Fernández de Mesa, about this sector, which has been hit so badly by the economic crisis. For Fernández de Mesa, “2014 was the turning point both in terms of residential housing and construction”.

“Construction (activity) has now bottomed out and will return to growth in 2015”, continued the Secretary of State for the Economy and Business Development, who also highlighted that house sales increased by 2% during the second half of last year and mortgage lending also recorded a positive end to the year.

Original story: www.pisos.com

Translation: Carmel Drake