Fotocasa: House Prices in Ibiza Cost 38% More Now Than in 2008

25 April 2019 – El Confidencial

Together with Madrid and Barcelona, the real estate market in the Balearic Islands has led the real estate recovery in recent years. Boosted by its geographical limitations (land for the construction of new homes is finite), the boom in tourist rents and the huge push from foreign demand (foreigners account for 30% of transactions), house prices have soared over the last four years to return to the levels of the bubble, and, in some cases, even higher.

Specifically, house prices in both Ibiza and Calvià are now higher than their historical peaks at the height of the previous cycle (up by 38% and 1.6%, respectively, compared to February 2008). That is according to data published by Fotocasa relating to second-hand homes, which reveals that the number of building permits being granted in the two municipalities has also returned to pre-crisis levels.

In fact, Ibiza is one of the most expensive cities in Spain for buying a home, after San Sebastián and Sant Cugat del Vallès, according to Engel & Völkers. Much of the rise in house prices on the island is due to the strong rise in demand, especially from overseas buyers, with Germans leading the ranking by nationality.

According to the College of Registrars, the Balearic Islands is the second most active autonomous region in Spain in terms of house sales with 13.41 sales per 1,000 inhabitants, outperformed only by the Community of Valencia with 15.88 and ahead of the Community of Madrid with 11.63. Moreover, it is the eighth most active province by absolute number of transactions.

Original story: El Confidencial (by E. Sanz)

Translation/Summary: Carmel Drake

Ibiza Exemplifies the Real Estate Market’s Recovery

25 April  2019 – El Confidencial

The real estate market on the Balearic Islands, and especially the well-known Ibiza, have exemplified the market’s recovery since the beginning of the financial crisis, just over a decade ago.  Aided by geographical constraints, limiting any potential growth on the islands, housing prices have increased significantly over the past four years.

Burgeoning demand by foreign buyers has pushed prices on Ibiza to a level that is 38% above the previous historical highs seen in February 2008 (for existing housing).  Other Balearic municipalities are also clawing their way back up, though at a reduced pace.  Fotocasa stated that prices on Calvià are 1.6% above pre-crisis levels while prices in Palma de Mallorca are just 1.3% below.

That growth has led to Ibiza to have the third most expensive property prices in Spain, behind San Sebastian and Sant Cugat del Vallès (near Barcelona), and ahead of Barcelona, Santa Eulalia del Río (also in the Balearic Islands), Pozuelo de Alarcón and Madrid. All have prices exceeding 3,000 euros per square meter. The Balearic Islands also has the second highest levels of real estate activity in Spain, with 13.41 sales per thousand inhabitants, only surpassed by the Valencian Community with 15.88 and ahead of the Community of Madrid, with 11.63.

Prices in the Canary Islands are currently 22.1% below the high of May 2007 (2,155 euros per square meter), while prices Madrid are 27.4% below its high of June 2006 (3,970 euros). On the other hand, prices in Navarra are still 53.3% below their previous highs, followed by La Rioja (-53.2%) and Murcia (-50.5%).

Original Story: El Confidencial – E. Sanz

Translation/Summary: Richard D. Turner

Fotocasa: Second-Hand House Prices Rose by 8.4% YoY in March

10 April 2019 – El Confidencial

According to data from the real estate portal Fotocasa, second-hand house prices rose by 8.4% in the year to March 2019, the largest increase since 2007. The average price of a second-hand home now amounts to €1,900/m2, a figure not seen since November 2012.

The data shows that YoY prices recorded 30 months of consecutive increases in March, although a rise of more than 5% has not been seen for 16 months.

The price rises were led by 3 autonomous regions, in particular, which experienced double-digit rises, namely: Madrid (19%), the Balearic Islands (12.5%) and the Canary Islands (11.8%), but prices rose in 16 of the 17 regions. Asturias was the only region to experience a price decrease, of -0.03%.

On average, house prices are still 35.6% below their peak, which was recorded in April 2007 (€2,952/m2).

In terms of average prices, Madrid (€2,976/m2), País Vasco (€2,810/m2) and the Balearic Islands (€2,617/m2) were the most expensive autonomous regions to buy a second-hand home in March. By contrast, Extremadura was the cheapest region (€1,108/m2), followed by Castilla-La Mancha (€1,141/m2), Murcia (€1,164/m2) and La Rioja (€1,402/m2).

By province, 43 of the 50 provinces recorded positive quarterly price variations and seven registered inter-annual price variations of more than 10%, specifically: Madrid (19%), Alicante (15.6%), the Balearic Islands (12.5%), Málaga (12.4%), Las Palmas (12.1%), Santa Cruz de Tenerife (11.4%) and Guadalajara (10.9%).

In Madrid Capital, 18 of the 21 districts saw price increases in March, led by Carabanchel (4%), Vicálvaro and Barajas (both 3.5%). Meanwhile, prices decreased in Chamartín (-3.3%), Latina and Usera (both -0.4%).

Meanwhile, in Barcelona, second-hand house prices rose in 5 of the 10 districts in March, led by Sants – Montjuïc (1.9%), Sarrià – Sant Gervasi (1.4%) and Gràcia (1.2%). The largest QoQ price decrease was recorded in Sant Martí (-1.1%).

Original story: El Confidencial (by E.S.)

Translation/Summary: Carmel Drake

Spain’s Real Estate Sector Condemns the Government’s New Rental Act

1 March 2019 – Ok Diario

The real estate sector has expressed its widespread disapproval of the Royal Decree Law approved by the Government on Friday containing urgent measures for the housing and rental sectors.

Investment funds, real estate experts and rental associations alike have all condemned the new law as discriminatory, restrictive and short-termist.

Claudio Boada, Head Consultant at Blackstone España, said that the new legislation will undoubtedly result in more upwards pressure on prices and a reduction in supply, whilst sources at Fotocasa criticised the lack of tax incentives for landlords who rent their homes at affordable prices.

If this royal decree is ratified, then “rental contracts will have been subject to three different sets of rules in less than three months”, observed Gustavo Rossi from Alquiler Seguro, which is both confusing and unsustainable.

Original story: Ok Diario 

Summary translation by: Carmel Drake

Fotocasa: Residential Rental Yields Fell to 5.4% in January

26 January 2019 – El Economista

Residential yields in Spain fell by 7% in January 2019 with respect to the same month a year earlier to reach 5.4%, according to a report from Fotocasa.

The data obtained from the prices of house sales and rentals during the month of January show that acquiring a property to put it up for rent was “a bit more profitable” in 2018 than in 2019, according to Fotocasa.

The Head of Research at the real estate portal, Beatriz Toribio, explained that “this slight decrease in yields stands out because it is the first recorded in the month of January for the last 10 years. It is explained by the lower rate of growth in rental prices that we have seen since the end of 2018%”.

The report shows that Cataluña was the most profitable autonomous region, with a yield of 5.8%, compared to 6.7% in January 2018, which represents a decrease of 13% in that region.

In second place, the Community of Valencia had an average yield of 5.7%, compared with 5.9% in January 2018. Fotocasa highlighted that in just one year, the Community of Valencia went from being the 4th most profitable region to the 2nd.

It was followed by Murcia with a yield of 5.6%, compared to 5.7% a year earlier and Madrid (5.5% compared to 5.9% in 2018) (…).

The autonomous regions with the lowest yields were Galicia and La Rioja, with returns of 4.2% each; Navarra (4.4%) and Castilla y León (4.5%).

On the other hand, the most profitable city in the country was Hospitalet de Llobregat, which took the top position for the ninth year in a row, with a yield of 6.3%, the same percentage it obtained in 2018.

Original story: El Economista 

Translation: Carmel Drake

Fotocasa: Second-Hand House Prices Record Their Highest Increase Since 2006

24 January 2019 – Expansión

Second-hand housing is continuing to spearhead growth in the residential market. Not only because it accounts for more than 80% of all house sale operations, but also because it is the segment where prices are increasing by the most.

The price of second-hand homes rose by 7.8% at the end of 2018, recording the highest increase in 13 years, since 2006, before the crisis, according to data published yesterday by Fotocasa. Taking into account the fact that the online portfolio started monitoring house prices in 2006, it is the largest annual increase in the historical series. Although the prices of second-hand homes have not stopped growing in month-on-month terms for 27 months – more than two years – in 2018, they rose at a rate never before seen.

The awakening of latent demand, investor appetite and the profitability of rental properties in the context of low interest rates explain why interest has returned to property purchases, with the consequent impact on prices”, explained Beatriz Toribio, Head of Research at Fotocasa.

Despite the increases, the average house price stands at €1,869/m2, the level last seen in 2013, when the residential sector had not yet started to recover. House prices peaked in April 2007, when the price per square metre reached €2,952/m2, 36.7% higher than it is now (…).

Even though prices are still well below their historic maximums, the evolution of the market varies by area. Although the increases were widespread across almost the whole country in 2018, Toribio explains that “the intensity of the increases is very different, and there are even areas where slight decreases were registered”. Madrid is the province where prices increased by the most, specifically, by 19.5%, followed by Las Palmas (13.8%), Santa Cruz de Tenerife (12%), Alicante (11.3%), Barcelona (10.5%) and the Balearic Islands (10.4%).

The Spanish market continues to grow at various speeds, with large cities driving prices and sales. Guipúzcoa, Barcelona and Madrid are the most expensive provinces in Spain, with prices per square metre of more than €2,880/m2.

By contrast, the provinces that are suffering from depopulation and ageing demographics are recording significant price decreases (…). Toledo is not only the province that has recorded the largest decrease in prices since the peak (-55%), it is also the cheapest, with prices of €948/m2. It is followed by Ciudad Real, where second-hand homes are going for €990/m2.

Original story: Expansión (by I. Benedito)

Translation: Carmel Drake

Fotocasa: The Price of Parking Spaces Soars by 12% in Carmena’s Madrid Central

9 December 2018 – Voz Pópuli

It’s been a week since Madrid implemented the so-called ‘Madrid Central’ project, which restricts the access of the most polluting vehicles into the centre of the city. But some parties have been doing business for several months thanks to the regulatory changes approved by the mayor Manuela Carmena’s team in this regard.

The sales price of parking spaces has soared by 12%, according to data provided by the portal Fotocasa. The price of acquiring a spot in which to park a private vehicle increased from €26,960 to €30,152, on average, between September and October, in other words, a month before the introduction of the measure.

Although rental prices, by contrast, stayed the same at €177/month, so far this year, the district where Madrid Central is located is where prices have risen almost by the most, 9.7%, behind only San Blas, where they increased by 10.8%.

Madrid Central is looking “to ensure that our health is protected against the effects of air pollution, which in Madrid exceeds the protection levels established by European legislation. It will also contribute to the reduction of noise and to the fight against climate change, by reducing the emission of greenhouse gases”, explain sources at the Town Hall of Madrid.

Parking in the centre of Madrid

Parking in the centre of Madrid will be a real headache from now on. The most polluting cars, those that display B and C labels from the DGT, will be able to circulate in the centre to park in the various parking lots, but they may be fined if they cross into the Madrid Central perimeter without entering an underground parking lot, and even more so, if they decide to park in a SER zone (blue or green). In the event that there is no space in any of the parking lots, vehicles cannot be fined and the Town Hall will report that fact.

How can drivers know if there are any spaces available in the city centre’s parking lots? The Town Hall plans to install electronic screens at the 17 access points to Madrid Central, which will inform users about the availability of parking in real time. Nevertheless, those screens are not going to be installed until May next year, as they are currently at the tender contract phase.

The problem arises because the Town Hall has already announced that it will start to fine any drivers of private vehicles who break the new regulations from February onwards, three months before users will have information on the screens.

Original story: Voz Pópuli (by Carlos Frías)

Translation: Carmel Drake

Fotocasa: Rental Prices Soar by 11%+ in Madrid, Valencia & Málaga

20 November 2018 – Expansión

The rental market has reached cruising speed faster than usual in the main Spanish capitals. The new normal has become double-digit increases, which have been accumulating on a sustained basis now for several months.

Madrid, Valencia and Málaga are leading the trend. In Madrid, rental prices soared by 13.2% in October in YoY terms; meanwhile, in Valencia, they leapt by 13%; and in Málaga, they rose by 11.3%. They are closely followed by Santa Cruz de Tenerife, where rental prices increased by 10.2% in YoY terms. These rises contrast with the overall moderate increase in rental prices in Spain, which were up by just 2.7% on average in October, according to the latest data published by the online portal Fotocasa.

“The average price of rentals in Spain are continuing to rise, but at a much lower rate than they were a year ago, when we were seeing double-digit YoY increases” explains Beatriz Toribio, Head of Research at Fotocasa.

In fact, the 2.7% increase is so heavily influenced by the large capitals that if we eliminate the increases in Madrid, Valencia and Málaga, the market would register a decrease of 3.2%.

Even so, the data for October constitutes a recovery, after a YoY decrease of 4.2% in the third quarter, the most acute reduction since the third quarter of 2007.

The strong tensions in prices in the main capitals are striking”, said Toribio, “above all, taking into account that a large part of them mean that we have now exceeded the maximum prices recorded in 2007 and 2008”.

This sustained increase in prices in the rental market is mainly explained by strong demand. On the one hand, the increase in house (sales) prices in the major cities means that the proportion of people who are ending up renting is increasing – a change in trend that is also being influenced by the preferences of young people to rent. On the other hand, the dynamism of tourism in these cities, together with the appearance of new accommodation platforms, such as Airbnb, in an environment characterised by low interest rates, have made rental an attractive option for investors. That, taking into account the scarce supply available in cities such as Madrid, is pushing prices up.

By contrast, rental prices are falling in cities with less economic dynamism, many of which are located inland, with acute problems in terms of depopulation and ageing demographics. Such is the case of Huesca, where prices fell by 25.7% in October, followed by Vitoria, with a decrease of 23.1% and Soria (-21.5%).

Although the rental market is more elastic than the purchase market against possible macroeconomic shocks, a significant slowdown in economic growth could have a negative impact on the real estate market.

Original story: Expansión (by I. Benedito)

Translation: Carmel Drake

Fotocasa: Rental Prices Reach Historical Peaks in 2018 in the Balearic Islands, Las Palmas, Salamanca, Barcelona & Madrid

3 July 2018 – El Economista

Rental prices in five Spanish provinces (the Balearic Islands, Las Palmas, Salamanca, Barcelona and Madrid) have reached their historical maximums in 2018, according to data provided by Fotocasa. The situation extends to nearby municipalities in the provincial capitals.

Barcelona, with a maximum price of €13.90/m2 in January 2018, is the province with the most expensive rental prices, following by Madrid, with an average of €12.36/m2, recorded in April this year. Those two provinces are followed by the Balearic Islands, with a price of €10.60/m2; Las Palmas (€7.65/m2); and Salamanca (€7.34/m2).

According to the Head of Research at Fotocasa, Beatriz Toribio, “the average price of rental housing in Spain has been growing uninterruptedly for three years, but in 2017, it did so at a very intense rate, above all in the large provincial capitals and in tourist destinations such as Madrid and Barcelona”.

Moreover, 65 other towns have also recorded their maximum prices at some point during 2018, in particular, those in the autonomous regions of Andalucía, the Community of Valencia, Madrid and Cataluña.

In this way, in Andalucía, 11 municipalities have recorded maximum prices in 2018, including Málaga, Torremolinos and Rincón de la Victoria. In the Community of Valencia, rental prices in 10 municipalities have reached their historical peaks, whilst in the Community of Madrid, 7 municipalities have seen maximum prices, such as Madrid capital, Las Rozas and Boadilla del Monte. Finally, in Cataluña, 9 municipalities have reached their maximum rental prices.

Original story: El Economista

Translation: Carmel Drake

Spain No Longer Features in EU’s Top 10 Home Ownership Ranking

23 March 2018 – El País

77.8% of citizens resident in Spain own their own homes. In this way, the country was placed in 13th position in the ranking of European Union (EU) countries in terms of this parameter in 2016, one place below its position the previous year – after being overtaken by the Czech Republic – according to data from the European statistics institute Eurostat, and well outside of the Top 10. Compared to the European average (69.2%), the Spanish figures are still high, although each year, the percentage of homeowners is decreasing slightly to the benefit of the rental market. Ownership fever dominates in Eastern Europe, in particular, where the percentage exceeds 90% in many countries.

In 2007, the first year for which Eurostat compiled data for Spain, the country was ranked in 9th place in terms of the number of citizens owning their own home, with a percentage of 80.6%. Thus, between then and 2016, the rate has been decreasing slightly at the same time as the rates in other countries have been increasing, relegating Spain to lower positions in the ranking.

“In Spain, home ownership is decreasing slightly each year due to the economic conditions and the difficulty in accessing a mortgage”, explains José García Montalvo, Professor at the Universidad Pompeu Fabra, who points out that nowadays you need to have a permanent (employment) contract to be granted a mortgage, whereas, in 2007, you could have been a temporary worker. García Montalvo also argues that society has changed and young people – who are finding it harder to access real estate loans due to their employment conditions – regard the purchase of a home as a “problem” (…).

The professor says that the price of rental homes is rising due to greater demand, and he does not think that the decrease in home ownership is a phenomenon that is going to reverse despite the rent increases. In 2017, the price of rental homes in Spain recorded its third annual rise. The average price grew by 8.9% in 2017, the highest ever increase in the historical series of the real estate portal Fotocasa’s index, which has been compiling data since January 2006.

Eastern European countries lead the home-ownership statistics

In 2016, Romania was the country where the highest percentage of citizens owned their own home, with 96%. It was followed by Lithuania, with 90.3%; Croatia and Macedonia, with 90%; Slovakia (89.5%); Hungary with 86.3%; Poland, with 83.4%; Bulgaria (82.3%); Estonia and Malta, with 81.4%; Latvia with 80.9% and the Czech Republic with 78.2%. “The countries where citizens are most committed to buying their own home are primarily those in Eastern Europe. This is partly a result of the fact that many of those regions were communist countries and that when the market was opened up, it was shared out and everyone got involved”, says García Montalvo.

By contrast, the data from Eurostat shows that the citizens of countries with more consolidated economies back the rental market to a greater extent over the acquisition of home. Thus, Germany leads this category with 51.7% of its citizens owning their own home, followed by Austria, with 55%; and Denmark with 62%. Nevertheless, none of these countries fall below 50%, although the percentages are decreasing every year, opting for a rental model. The EU average stands at 69.2%, more than 8 percentage points below the figure in Spain.

“Rental is favoured in countries where labour mobility is higher such as in Germany and Austria. In Spain, it would be great if that was the case to boost labour mobility because ownership ties people down a lot (…).

Original story: El País (by Nahiara S. Alonso)

Translation: Carmel Drake