Tag: empty homes

The PSPV Proposes a Housing Plan to Mobilise 4,500 Rental Homes in Valencia

23 February 2019 – Valencia Plaza

The socialist candidate for the Mayor of Valencia, Sandra Gómez (pictured below, left), has proposed a comprehensive housing plan for the city that would mobilise 4,500 homes, through new social housing units (VPO) and empty homes enabled for rental (…).

In a recent speech, the candidate for mayor explained that the plan to mobilise 4,500 homes includes empty homes. “Thanks to the Generalitat’s courage, we are going to have a map with which to operate to identify the large owners of homes, those who own more than ten empty properties”. With this, the socialists propose “an increase in the IBI charge for those empty homes that are not included in the rental market”.

In addition, to achieve the objective of this plan, they will demand “the maximum possible social housing in the city’s new developments, as we are already doing with developments such as Benimaclet, where 30% of the new builds will be VPO” (…).

And, as a third axis, Gómez has proposed that the administration “acts to promote the park of affordable housing that the city of Valencia currently lacks”. She recalled that there are initiatives such as the 300 public homes, being promoted by Aumsa and “the more than 1,000 that are going to be promoted by mobilising land from SEPE, as agreed with the Government of Spain this week. Nevertheless, the Town Hall has to do more” (…).

Original story: Valencia Plaza 

Translation: Carmel Drake

“Anti-Eviction Law” Reveals that CaixaBank has 5,000+ Empty Homes in Valencia

7 October 2018 – Valencia Plaza

La Generalitat is pushing ahead with its count of empty homes in the hands of owners of large property portfolios in the Community of Valencia. Reporting of these types of assets is now mandatory under the Law for the Social Function of Housing – known as the Valencian “anti-eviction law”, – a text that was watered down by the Constitutional Court (CC) but in whose articles the Consell still retains the tools to demand the reporting of unoccupied assets and to impose fines in the event of a lack of collaboration.

The Valencian Government reactivated the count following the recent ruling from the CC. The most recent figure provided by the Conselleria de Vivienda amounts to 7,315 homes across the length and breadth of the Community: 45% in the province of Valencia, 38% in Castellón and the remaining 17% in Alicante. But the most striking fact comes from the analysis of the owners, given that a total of 5,270 homes are owned by the CaixaBank Group.

The bulk, according to data provided to this newspaper by the socialist Minister María José Salvador, corresponds to 5,065 empty homes reported by BuildingCenter, the company owned by CaixaBank “focused on the divestment of the portfolio of properties proceeding from the group”, according to the company’s own motto -. The remainder to arrive at the total of 5,270 units corresponds to 148 reported directly by Caixabank, 51 from Banco de Valencia, 5 from Credifimo and 1 from Gestión Fondos Credifimo.

Almost all of the homes owned by the group in the Community come from foreclosures made by the now extinct Banco de Valencia, which was awarded to La Caixa for €1 in 2012 under the framework of the bank restructuring. As a result, the data provided by CaixaBank to La Generalitat reveal that, six years later, the stock of assets proceeding from the extinct Valencian bank continues to be very bulky.

In addition to the empty homes reported by the CaixaBank group, the other properties to reach the total of 7,315 units are owned by Sareb (1,598 homes) and Grupo Santander (447), split into the companies Altamira Santander Real Estate (339), Banco Santander (67), Luri 6 SA (36) and Santander Consumer Finance (6) (…).

Register of uninhabited homes (…)

The law provides for the creation of the Register of Uninhabited Homes (…) so that all of the homes that are declared uninhabited by the administration can be grouped together and “housing solutions can be granted to those people who need them most”. The objective of the administration is to “mobilise the more than 500,000 empty homes that there are in the Community”, according to estimates.

Original story: Valencia Plaza (by Dani Valero)

Translation: Carmel Drake

Rental Boom Triggers Investment in Madrid & Barcelona

27 January 2018 – Expansión

Markets are booming / The central parts of Spain’s two largest cities are the most sought-after by those investing in housing in search of returns, but rental prices are increasing more quickly in the districts on the outskirts of those cities, with rises of more than 10%. The experts forecast an accentuation of this trend, given that the supply of rental properties in the prime districts is starting to prove insufficient to cover all of the demand.

The real estate recovery is happening at three speeds. On the one hand, the large cities and most established areas along the coast are experiencing significant house price rises, a notable increase in sales, an increase in rental prices, a rise in non-residential investment and even a shortage of land for sale. On the other hand, medium-sized cities have left the lethargy behind and are now recovering, although with less energy than the large real estate centres. Finally, the less populated provinces are still recording ups and downs, although even there it is clear that the worst of the crisis is now over.

A large part of this improvement is due to the country’s underlying macroeconomic performance, but not all of it. The impact of private investors is playing a crucial role in the strengthening of the two large real estate centres, whose prime areas are the most sought-after by those looking to buy homes to put them up for rent, where they can obtain returns of more than 10%. Why? Because, in addition to the immediate increase in value that they are obtaining, a kind of rental boom is also happening in Madrid and Barcelona.

That said, “rental prices may be starting to peak in cities such as Barcelona and Madrid” says Beatriz Toribio, Head of Research at Fotocasa. “The market is normalising”, and so “although rental prices will continue to rise during 2018, they will do so at a lower rate than they did in 2017”, she adds.

The district of Chamberí exceeded the district of Salamanca in 2017 as the most expensive in the capital for renting a home. The average price of a rental home in Chamberí is €16.41/m2/month, followed by Salamanca (€16.07/m2/month), Tetuán (€14.94), Chamartín (€14.46) and Retiro (€14.35). At the other end of the spectrum, the district of Villaverde, with an average rental home cost of €8.91/m2/month was the most affordable. It was followed by Vicálvaro (€9.58), Moratalaz (€9.68), Villa de Vallecas (€9.90) and Usera (€10.15).

Almost all of the districts in the capital saw rental prices increase with respect to 12 months earlier. The district that rose by the most was Hortaleza, which increased by 13.1%, followed by Puente de Vallecas (12.9%), Ciudad Lineal (11%), Usera (9.4%), Retiro (9.1%) and Tetuán (9%) (….).

In Barcelona, the same thing is happening. The two districts that closed 2017 with decreases in rental prices are two classics in the rental market: Eixample (-1.4%) and Ciutat Vella (-1.2%). How come? “The rental boom started in the best locations and so when those areas reach very high prices, demand starts to withdraw from these areas and move to other more peripheral neighbourhoods”, says the real estate consultant José Luis Ruiz Bartolomé, Managing Partner at Chamberí AM. “The push from investors is also moving to other less central neighbourhoods, which are very well connected and cheap compared to the city centre”, he adds (…).

Specifically, the district of Ciutat Vella is the most expensive in all of Spain when it comes to renting a home. The average price there amounted to €17.16/m2/month in December 2017, despite the decrease seen YoY. It was followed by the second most expensive district, Sarrià-Sant Gervasi, whose average price amounted to €16.63/m2/month in December (…). Compared to 2016, prices rose in eight districts in the Catalan capital. The leader of that ranking was Sant Andreu, where prices rose by 12%, followed by Gràcia (9.5%), Les Corts (8.1%), Sants – Montjuïc (6.7%), Nou Barris (6.4%), Horta–Guinardó (4.8%), Sarrià-Sant Gervasi (3.9%) and Sant Martí (2.7%).

Gustavo Rossi, President of Alquiler Seguro, adds that “2017 will be remembered as the year in which the supply of rental housing became insufficient to meet demand”. The sector needs to be professionalised and the owners of empty properties need to realise that putting them on the market is a good option”, he says.

“Over the last decade, rental has established itself as the preferred option for young people and new families. In 2018, we are going to move closer than ever to the European model, where the rental segment has many followers”. (…).

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

Airbnb: Holiday Homes Have No Impact On Housing Stock In Palma

4 April 2017 – El Mundo

Yesterday, Airbnb expressed its disagreement with the decision taken by the Town Hall of Palma to prohibit the rental to tourists of homes in multi-family buildings and stated that the occasional rental of a regular home “did not have any impact on the stock of available homes”.

The vacation rental company said in a statement that it wants to work with the Town Hall on the solution and advised that the occasional rental of primary residences helps many middle-class families “supplement their income”.

Airbnb states that the Town Hall has taken “figures that do not correspond to the reality” as a reference and that entire homes in Palma that are rented out for more than 120 nights per year account for just 0.8% of all the homes in the city.

According to data from Airbnb, Palma currently has 171,000 homes, down by 10% from 182,000 in 2011. In addition, it has more than 16,000 empty homes and apartments, a figure that represents more than 9% of the available housing stock in the city. In Mallorca as a whole, the percentage of empty homes is 16% (71,255 units).

The multinational company defends itself, by saying that those who practice “home sharing” are opening up the home they live in and are therefore not reducing the available housing supply.

Airbnb has 5,000 adverts in the city, according to data as a January. However, not every advert corresponds to a single housing unit, given that a host may have two adverts for the same house, for example, if he shares two rooms.

22% of all of the adverts relate to rooms only, which represents 1,100 adverts, which “are not removing homes from the long-term rental market”, given that the people who are renting these rooms also live in the property.

78% of adverts correspond to entire homes, which represent 3,900 adverts. Of those, 36% are let out for more than 120 days per year, a percentage that is equivalent to 1,400 homes. Airbnb says that that is the figure that represents the number of homes that are being deducted from the rental market, which account for 0.8% of the available homes Palma, a percentage that it says is “too low to have any impact on the market as a whole”.

75% of the hosts in Palma that advertise on Airbnb have just one advert and the typical host in Palma rents his property out for less than 60 days per year.

The rental company says that Palma has been suffering from “tensions in terms of house prices” for years and points out that the Association of Residential Property Developers in the Balearic Islands warned back in 2012 that the islands were going to be hit by a shortage of available housing and that the few developments that were being built were going to generate serious difficulties in terms of rising prices.

“House prices rose in the city long before Airbnb even existed and they have evolved in line with the dynamics of the real estate market, with investment in property in the context of a shortage in supply”, said the note.

Original story: El Mundo

Translation: Carmel Drake

Spain Needs To Build 150,000 New Homes Per Year

27 December 2016 – El Confidencial

The International Monetary Fund (IMF) issued a warning a few weeks ago: the greatest danger in terms of a new real estate bubble on the world scale is the lack of homes. Although it seems impossible, Spain, with its housing stock of 25 million – for a population of 47 million – of which approximately one and a half million are empty, needs more homes. In fact, it needs around 150,000 new homes per year in order to have a healthy residential market. Otherwise, there will end up being strong upwards pressure on prices (of both new builds and second-hand properties), which could lead to a new and much-feared bubble.

At least that is according to the majority of the experts in the real estate sector. From appraisal companies, to consultancies, to property developers, to cooperative managers. Everyone agrees that Spain needs more homes. But, how is that possible when the country has a surplus stock amounting to almost half a million units?

“The surplus stock, or rather, the census of unsold homes is not always in the locations in which there is demand. Homes are not bricks that can be moved from one place to another”, said Juan Fernández Aceytuno, Director General at Sociedad de Tasación. “Moreover, in some places in Spain, the stock is very low and new homes need to be built to satisfy demand”, added Julián Cabanillas, CEO at Servihabitat.

But isn’t the second-hand market sufficient to satisfy demand? “When making a major investment such as buying a home, families prefer to acquire a new build than a second-hand property” (…), said Ernesto Tarazona, Partner and Director of Residential and Land at Knight Frank.

The problem, according to the real estate experts, is that hardly any new homes are being built. Since the burst of the real estate bubble in 2007, house construction has been completely paralysed. Spain went from building 800,000 homes per year to just 35,000 homes in 2013 and 2014 (according to housing permit data from the Ministry of Development) and for the market to be healthy again, we should be building around 150,000 units per year.

“House prices and sales are definitely showing signs of improvement, but we cannot talk about the stabilisation of the sector until we see a recovery in terms of construction”, said Carolina Roca, Vice-President of the Property Developers Association in Madrid (Asprima). (…).

And that is not an easy task, according to Roca. “In order to reach that figure (of 150,000 new homes per year), we not only need land, but we also need to restore the productive and entrepreneurial fabric of the sector, given that the majority of the players in the property development and real estate sectors have disappeared. Very few property developers are actually building homes at the moment, and those that are, are doing so using own funds for the most part, given that although financing to individuals has recovered, it has not for property developers to the same extent. Not even with the entry of new players such as investment funds will we reach those figures”, laments Roca.

“The construction of 150,000 homes per year seems like a reasonable figure. Nowadays, around 500,000 homes are sold per year, of which, only 10% are new builds. During the boom years, new builds accounted for 50% of all house sales and it is likely that the percentage will end up stabilising at around 30%, which means that 150,000 homes per year seems reasonable”, acknowledged Juan Velayos, CEO at Neinor Homes, one of the new players in the sector. (…).

“Nowadays, everything that is built is sold. Off-plan homes are sold out in a matter of weeks”, said Ernesto Tarazona who, nevertheless, recognises that a very important segment of potential buyers is being left out of this timid recovery. “Nowadays, anyone wanting to buy a home for €160,000 in Madrid is going to be disappointed; they just can’t. There isn’t any land available to build houses at those prices”, comments Juan José Perucho, Managing Partner at the Ibosa Group. (…).

Original story: El Confidencial (by Elena Sanz)

Translation: Carmel Drake

Rajoy Will Give Tax Breaks To Banks That Lease Empty Homes

29 November 2016 – Expansión

Housing will be one of the first major agreements of the new legislature. The PP has reached “an agreement with the opposition” to approve a non-binding proposal to establish guidelines for real estate policy until 2021. This initiative, which will be debated by the Development Committee in Congress on Wednesday, includes an important new feature: it will incentivise the occupation of empty homes owned by financial institutions, public companies, Public Administrations and “other owners” by the “most vulnerable” families. For example, those on low incomes and those who have been evicted from their homes.

To achieve this, “tax incentives, agreements with large home owners and exchanges of land” will be approved, according to sources in the Popular Parliamentary Group. “All of the parties support the agreement”, which will give rise to a new Housing Plan, to be agreed, as always, with all of the regional governments.

The tax benefits that will be approved have not been defined yet because the PP still needs to agree them with the opposition. Moreover, the Ministry of Development, which is piloting the reform is in the middle of handing over powers and is not in any rush. “The left-wing parties like the idea. The agreement that we are going to reach on Wednesday is generic and we will have to do further work to iron out the details”, say the same sources.

In the face of initiatives to penalise owners of empty homes, such as those introduced in Cataluña, País Vasco and Andalucía, the new housing agreement will seek to “promote mechanisms of cooperation so that available unoccupied homes, owned by the Public Administrations, public companies, financial institutions and other owners may be occupied by the most vulnerable members of the population” according to the text in the Proposal, which has received a favourable report from the Ministry of Development.

The banks will be the main target for these measures. The appraisal company Tinsa calculates that the financial institutions own more than 80% of the stock of empty homes. In its most recent report, based on data as at 2015, Tinsa calculates that the banks own a surplus of more than 300,000 (empty) homes. In addition, the ratings agency Fitch says that at the end of last year, the financial sector owned “around 150,000 unsellable (new) homes”.

With this reform, it will be much easier for banks to free up their empty homes. Firstly, because they will receive guaranteed income from the State in the event that they allocate them as social rental properties. Secondly, because although the lease payments will be relatively low, the tax benefit will have a compensatory effect. Thirdly, because when the entities exchange properties for land, they will remove those assets that are hard to divest from their balance sheets and they will only include new properties in better locations and with better outlooks.

INE estimates that there are 3.5 million empty homes in Spain, but that almost all of them are owned by individuals. Tinsa says that, of all of the residential properties constructed since 2008 (that have never been lived in), only around 11,670 are owned by professionals, but they are not being marketed. That figure represents 3.9% of the total commercial stock (389,000 homes in 2015). (…).

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

Colau Fines BBVA, Sareb & Santander €1.2M For Empty Flats

22 November 2016 – Expansión

The government team of the Town Hall of Barcelona, led by Ada Colau (pictured above), announced yesterday that it has fined Santander, BBVA and Sareb for letting four homes stand empty for two years or more. Each fine amounts to €315,000. The Town Hall also announced that it will reform the regulations (governing the sector), with the aim of simplifying the administrative procedures. Until now, each case has been completed in several phases, with a series of fines being imposed (amounting to €5,000, €10,000 and €15,000, respectively) before the final sanction.

The fines only affect legal entities and not small home owners. From now on, the two intermediate phases of the process will be eliminated, which means that the preliminary fine of €5,000 will still apply and then the final sanction will be imposed.

According to the council member for housing, Josep Maria Montaner, these changes should allow cases to be processed within five months, rather than within a year and a half, as is currently the case.

The sanctions imposed yesterday relate to cases opened in September 2015, three months after Colau was elected as the mayoress of the city. Twelve cases were opened at that time, and given that four of them are still in the same situation, the maximum fine has been imposed.

The fines announced yesterday affect two flats owned by Sareb, one owned by Santander and another one owned by BBVA. In the case of the latter, the entity chaired by Francisco González said that the property was made available for the Generalitat’s social rental housing stock last July, along with 1,800 other properties.

207 cases

Montaner also took stock of the cases that have been processed so far. In total, 207 cases are currently open, of which 13 have been fined the first amount (€5,000); eight the second amount (€10,000); and two the third amount (€15,000). The council member stressed that the purpose is not “to raise funds”, but rather to ensure that empty homes are made available for the social rental housing stock, which is being managed by the Catalan capital’s Town Hall.

Original story: Expansión (by D. Casals)

Translation: Carmel Drake

Carmena Is Set To Build 1,000 Rental Homes For €60M

19 September 2016 – Voz Populi

The rebirth of the real estate market will soon have a new, unusual, player in its midst: the Town Hall of Madrid. The capital’s Town Hall is getting ready to fire the starting gun for the construction of the first rental homes that it plans to build during its legislature. For the time being, it will put out to tender the construction of almost 1,000 homes, with an initial investment of more than €60 million.

Social housing was one of the key pillars of Ahora Madrid’s election campaign during the municipal elections to govern the largest town hall in Spain, which were held in 2015. For the first few months, the municipality’s new team focused on getting to know the financial circumstances of the ‘Empresa Municipal de la Vivienda y el Suelo’ (EMVS), which starred in spectacular asset sales during Ana Botella’s reign at the Town Hall, all intended to alleviate the city’s economic difficulties.

The Town Hall’s plans now include constructing 4,000 new social housing homes in Madrid before the end of its legislature. Work will begin on a quarter of them within the next few months, once the ten contracts that the mayoress’ team is currently preparing have been awarded (…).

The Town Hall’s property development activity will be launched once the role of the EMVS to contract and put homes on the market has been activated again, following the restrictions imposed on it in recent years. Previously, the company was in a very delicate financial situation due to the collapse in value of the large volumes of land that it had acquired at the end of the real estate bubble and, therefore, at exorbitant prices.

Those circumstances meant that the company had to divest assets, including packages of homes sold to vulture funds, which generated a lot of controversy, which has now been declared void in the courts and by the investigation committee created to try to determine the legal nature of the operation.

In April 2016, the Town Hall injected €17 million into the EMVS, through a capital increase, an amount that was intended to allow it to continue cancelling its debt but which, at the same time, allowed it to relaunch the public company’s construction activity. The developments are located in the district of Vallecas and in the areas of Rosilla and Nuestra Señora de los Ángeles, although the Town Hall’s also plans to construct homes in other areas of the capital too.

This is undoubtedly an unprecedented move and not only in the public sphere, but also in the private. Many real estate companies have cancelled their development plans due to the collapse of the market and the lack of demand, together with the problems generated by the large volume of empty homes in Madrid. The contracts that the Town Hall will put out to tender mean that almost 1,000 new homes will be constructed within two years of them being awarded.

Original story: Voz Populi (by Raúl Pozo)

Translation: Carmel Drake

Constitutional Court Temporarily Supends Basque Housing Law

18 April 2016 – Cinco Días

The Constitutional Court (TC) has admitted the appeal filed by the central Government against the Basque Housing Law, which provides for the temporary expropriation of homes by banks, amongst other measures, and has suspended it as a precautionary measure whilst it decides whether or not it complies with the Constitution.

The Government filed an appeal of unconstitutionality against the Basque Housing Law, which, in addition to the aforementioned measure, makes provisions for other initiatives, such as the imposition of a fee on empty homes and the recognition of the subjective right to a home, which will be enforceable in court.

The Basque Parliament approved the Housing Law in June 2015, following lobbying by PSE and with the support of EH Bildu and UPyD. It was rejected by the PP and the PNV. In its appeal, Mariano Rajoy’s Government requested that the admission procedure for the law be temporarily suspended until the substance of the matter has been resolved, as it is allowed to do under the Organic Law of the TC.

The court of guarantees issued a ruling in which it declared the appeal admissible and suspended the law, which does not determine the final outcome, but rather grants a period of five months, which may be renewed, during which time the aforementioned law will not apply and a decision can be taken regarding its future.

In its acceptance and suspension ruling, the TC announced that it will transfer the file “to the Congress of Representatives and the Senate, through their respective Presidents, as well as the Basque Government and Basque Parliament, through their respective Presidents, so that they can make an appearance and formulate the allegations that they deem appropriate, within a period of fifteen days.

Original story: Cinco Días

Translation: Carmel Drake

The RE Sector & Its Challenges For The Future

14 April 2016 – Cinco Días

“Few countries in the world have as much regulatory complexity as Spain”, said Alfonso Benavides, Chairman of the Urban Land Institute in Spain yesterday, at the Sustainable Urban Development Forum organised by the newspaper El País and sponsored by Distrito Castellana Norte. According to experts, the diversity of legislation hampers growth in a sector that has great potential for expansion. The politicisation and lack of a roadmap for management plans represent another obstacle”. “There is no strategic vision”, said Eduardo Fernández-Cuesta, Chairman of RICS in Spain.

The system is so complex (and hard to interpret) that it generates more questions than it answers. The continuous updates to the regulatory framework resolve one set of problems and create another. “The private sector can work with complexity, but not with uncertainty over timings”, warned Benavides, who pointed out that the first draft of an urban planning request alone can be up to 2,500 pages. The proposed extension of the Castellana being managed by Distrito Castellana Norte has been in the pipeline for more than 20 years, awaiting the various approvals.

“The fundamental concept is legal security, something which we currently lack”, said Ricardo Martí-Fluxa, Chairman of the Spanish Association of Real Estate Consultancy Companies. It is estimated that for every €1 million of real estate investment, between 18 and 20 jobs are created. In his opinion, we should stop demonising the economic gains of projects because the private sector, which has to drive these processes, must be able to generate a return from its investments and he noted that Town Halls in other European capital cities, such as London, are determined to give companies facilities so that they can execute such investments.

Juan Antonio Gómez-Pintado, Chairman of the Association of Real Estate Developers in Madrid, expressed the same views. He noted that the first people who are interested in putting an end to speculation are property developers. “It is absolutely essential that land is available, when it is restricted, a natural speculative process occurs. By the law of supply and demand, when land is restricted, its price increases”, he complained. (…).

The big question is, following the burst of the real estate bubble, whether Spain needs to continue building homes. The Ministry of Development, which prepares an annual report, estimates that there are 43,000 empty new homes in Madrid alone. Sources in the sector dispute those figures. “The report is prepared using a valid methodology, but it does not reflect the reality because, for example, it does not take account of the fact that the owner of a new home may not want to sell it”, said Juan Fernández-Aceytuno, CEO of Sociedad de Tasación. The actual number, if we look on a promotion by promotion basis, does not exceed 8,000 homes in Madrid. “One of the major problems is that we have run out of stock”, said Gómez-Pintado.

Nevertheless, the experts agree that, a new bubble is unlikely, especially due to the lack of available mortgage financing. In 2006, around 1.3 million loans were granted. In 2014, that figure barely reached 350,000. “There is no risk of a bubble”, said Fernández-Aceyuno. “We expect a period of stability in terms of house prices across the country”.

Original story: Cinco Días (by Carlos Santana)

Translation: Carmel Drake