Tag: foreign demand

Fitch: House Prices Are Going to Rise At A Faster Rate Than Salaries

20 February 2017 – El Economista

On Thursday, the ratings agency Fitch warned that access to housing in Spain is going to gradually worsen as a result of the difficulties facing the labour market.

In its report about the outlook for the real estate and mortgage market in 2017, the ratings agency forecasts that house prices in Spain are going to rise at a faster rate than salaries, which means that the accessibility of housing is going to deteriorate.

“Fitch expects the accessibility of housing to gradually worsen given that any recovery in salaries will be lower than the increase in house prices, taking into account the challenges facing the labour market”, said the agency, which added that access to the real estate market will be “especially difficult” for first-time buyers.

Fitch expects the positive trend observed in house prices, which rose by 4% during the third quarter of 2016, to continue thanks to “robust economic growth”, the maturity of the mortgage market and foreign demand, which currently accounts for 13% of transactions.

Nevertheless, it says that the two-speed market will continue, given that the “bulk” of the recovery will focus on homes whose quality and location place them above average.

Slow down due to floor clauses

On the other hand, Fitch thinks that the legal uncertainties surrounding the floor clauses and the reform of the mortgage market will slow down the growth experienced since 2014 for the granting of loans to buy homes.

“The rate of growth in loans will slow down from the levels seen in 2015 and during the first half of 2016, given that Spain’s banks will adopt a more cautious approach in the face of the legal uncertainties that are affecting the mortgage market”, said the agency.

Nevertheless, it considers that the rise in house prices and the favourable loan environment, thanks to low interest rates, are still offsetting the repayment of loans in progress.

Finally, Fitch thinks that Spain’s banks will continue to reduce their exposure to toxic assets by divesting their non-strategic businesses, such as their non-performing loans and foreclosed properties.

Original story: El Economista

Translation: Carmel Drake

Registrars: House Sales Soared By 23.7% In Q2

30 August 2016 – Expansión

Between April and June, 107,838 homes were sold, specifically 88,291 second-hand homes and 19,547 new homes. The figure represents the highest number of transactions recorded in a single quarter in the last three years.

(…). According to data published yesterday by the College of Registrars, house prices rose by 7.48% in Q2 compared with the same period last year. Compared with the figures recorded during the first quarter, the rise between April and June amounted to 2.19%. Despite these significant increases, prices have still not returned to their pre-crisis levels. And although the cost of housing is now similar to the level last seen in 2004, the cumulative decrease still amounts to 26% with respect to 2007, when prices reached their highest level before the burst of the real estate bubble.

The data from the College of Registrars also shows that the figures for the second quarter “comfortably” exceeded the 100,000 transaction threshold, after more than three years below that figure. Specifically, 107,838 transactions were signed during the second quarter (representing an increase of 23.7%), of which 88,291 corresponded to second-hand homes and 19,547 to new homes. Nevertheless, sales of new homes recorded their second consecutive positive inter-quarter variation (0.84%), after a long period of steady decline. It is the highest level seen in the last five quarters, proof that this type of housing is now showing its first signs of recovery.

Second-hand homes

In addition, sales of second-hand homes continued their strong upwards trend, already seen in recent quarters. The 88,291 sales recorded represented a QoQ increase of 10.31%, resulting in the highest number of second-hand sales in almost nine years, according to the College of Registrars. We have to go back to Q3 2007 to find such a high level of quarterly second-hand home sales.

Most autonomous regions recorded a QoQ increase in the number of house sales (specificially fifteen), with double-digit increases in six of those. The highest number of transactions were recorded in Andalucía (20,846 homes), Cataluña (17,300), the Comunidad Valenciana (15,734) and Madrid (15,540). In relative terms, the highest increases were recorded in the autonomous regions of the Balearic Islands (31.4%), País Vasco (24.07%) and Murcia (22.2%).

Furthermore, demand for housing from foreigners maintained its traditional strength during the second quarter, to account for 13.38% of all house purchases, up from the figure of 12.93% recorded during the first quarter. The historical maximum was recorded in Q4 2015 (14.38%). British citizens continue to buy the most residential properties in Spain; they accounted for 19.73% of all purchases made by foreigners. They were followed by German (7.3%), French (7.05%), Swedish (6.9%) and Italian buyers (5.9%). (…).

Meanwhile, 11,470 mortgage foreclosure proceedings were initiated during Q2 and there were 2,432 “daciones en pago”, down by 30.8% compared with a year earlier.

Mortgage debt grew by 1.6% during the second quarter, to reach an average of €110,981.

Original story: Expansión (by Calixto Rivero)

Translation: Carmel Drake

Tinsa: Coastal House Prices Share In The RE Recovery

4 July 2016 – Expansión

Analysis by region / The price of tourist housing is thriving once again in many areas along the coast, including in the Balearic Islands, Canary Islands, Málaga, Cádiz, Alicante and Gerona. More than half of Spain’s beaches are experiencing clear recoveries in their property prices or are showing signs of recovery, with an increasingly active market, according to Tinsa; very few areas are still in decline.

The housing market has taken off with a bang, above all in the major cities. Nevertheless, certain other areas also stand out, in particular: the coasts, where 56% of the areas are now in recovery and where foreign demand and the limited stock in the prime areas has further encouraged increases in real estate prices. Specifically, and according to a recent report from the appraisal company Tinsa, 56.2% of the coast areas are now in a process of recovery, whilst prices have bottomed out in 28.1% of areas and only 15.8% are still experiencing price decreases.

In this way, the report highlights the Balearic and Canary Islands, which have several areas in “clear recovery”, followed by the Costa del Sol (Málaga) and the Costa de la Luz (Cádiz). In addition, there are significant improvements in Barcelona, Gerona and Alicante. In these areas, a good portion of the unsold housing stock has now been sold off, given that the number of transactions has shot up, and so too therefore has the granting of new permits, which have doubled. By contrast, prices in some parts of the Comunidad Valenciana, Murcia and Andalucía are still decreasing, as the markets there are saturated with unsold properties, which means it is still possible to find bargains relatively easily. The Cantabrian Coast has experienced a more moderate evolution. There are several keys that point to the prolongation of the rising trend. “We have been observing a moderate but stable increase in prices for several quarters now, foreign demand is rising sharply, above all along the coast, which means that the remaining unsold homes are now starting to run out in many areas”, said Beatriz Corredor, Director of Institutional Relations at the College of Property Registrars. (…).

Original story: Expansión (by Pablo Cerezal)

Translation: Carmel Drake

The Price Of Housing Rose 6.6% In 2015, According To Registrars

15 February 2016 – Expansion

The price of housing rose 6.6% in 2015, with an increase in sales of 11.2%, to reach 354,538 transactions throughout the year, according to the Real Estate Registration Statistics corresponding to the fourth quarter of last year.

With respect to the third quarter, the value of property increased by 0.9%. This way, the registrars point out that the cumulative decrease in prices since the peak levels of 2007, reaching 28.4% continues to “soften”.

Meanwhile, the home sales inscribed in the property registries in the fourth quarter of the year reached 84,031 transactions, representing an increase by 7.9% over the same quarter of last year.

With respect to the previous three months, transactions fell by 9.4%, showing the traditional seasonality of registrations made in the last quarter of the year, the report adds.

Again, the distinction between new and second-hand homes explains the evolution of housing sales. Thus, second-hand home transactions increased by 39.7% year-on-year, while the number in new homes fell by 36.9%.

For its part, foreign demand reached 14.4% of total sales in the fourth quarter of 2015, with a year-on-year result of 13.2%, which is above the 12,000 quarterly sales and exceeds the 46,000 sales of 2015.

Original story: Expansion

Translation: Aura Ree

House Sales To Foreigners Soar By 30% In Málaga

13 March 2015 – Diario Sur

In 2014, in the province of Málaga, 9,140 homes were sold to citizens from other countries, a figure that comes close to levels last seen before the crisis. This means that foreign buyers accounted for 38% of all real estate transactions in the province last year.

Foreign demand continues to be high in the Malaga property market, which recorded an increase of 28% in house sales last year, according to data published today by the Ministry of Development. Of the 23,929 homes sold in the province in 2014, 9,190 were to foreign buyers, which represents a percentage of 38%.

And the volume of house sales to foreigners has almost doubled in two years: from 5,140 in 2012 to more than 9,000 last year, representing a growth rate of almost 80%. Transactions involving Spanish buyers also increased in 2014, specifically, by 29%. However, according to the Chairman of the Association for Builders and Developers, José Prados, demand for primary residences, i.e. demand from buyers from Malaga itself, continues to be “very static”.

In terms of the foreign nationalities that are buying homes in Malaga, the ranking is led by the British, Scandinavians, French, Benelux, Germans and Russians, in that order, according to Prados. “Demand from Russian buyers, which peaked to compete with that shown by British buyers at one point, has cooled off significantly as a result of the internal problems facing the country”, he adds.

The vast majority of the foreigners that buy homes in Málaga (8,010 out of 9,190) are resident in Spain. The number of non-resident buyers has not increased significantly, despite the incentives introduced by the Government to grant residence permits.

Original story: Diario Sur (by Nuria Triguero)

Translation: Carmel Drake