Málaga Leads the Construction Sector in Andalucía with an Occupancy Rate of 88%

10 May 2019 – Expansión

Málaga is leading the ranking of house sales in Andalucía with 32,438 transactions and a market share of 32%, almost doubling that of its nearest rival, Sevilla (17.4%).

According to the participants of the round table organised by the Association of Property Developers and Construction Companies in Málaga (pictured above), the province is currently the driving force behind the construction sector and is home to some of the highest employment rates in the country (88.5%). That means that the sector now employs 62,700 people of the 70,200 surveyed in the Active Population Survey (EPA) when just five years ago, that figure amounted to just 57%.

In terms of the challenges facing the sector, the most important ones are rising rental prices and the generation of buildable land. In this context, the General Secretary for Housing at the Junta de Andalucía, Alicia Martínez, took advantage of the round table event to announce a new housing plan called ‘Plan Vive Andalucía’, which includes a greater commitment to affordable housing, the reactivation of obsolete urban areas and the promotion of R&D in the sector, amongst other initiatives.

Original story: Expansión (by Juan A. Gómez)

Translation: Carmel Drake

INE: House Sales Rose by 3.7% YoY in Q1 2019

14 May 2019 – Idealista

According to data from INE, 133,989 homes were sold in Spain between January and March 2019, which represents a YoY increase of 3.7%. It also represents the best quarterly sales figure since the spring of 2008.

Nevertheless, it is worth noting that the volume of monthly sales actually decreased during the quarter from 47,000 in January, to 43,700 in February and 42,700 in March. Second-hand properties accounted for most house sales during the period, specifically 81.1% in March, although the volume of new build transactions did grow by 14.4% during the quarter.

By autonomous region

Andalucía, Cataluña and Madrid continued to lead the ranking in terms of the regions with the most transactions signed, with 8,915, 6,904 and 6,233 units sold, respectively.

Despite the strong results, Fernando Encinar, Head of Research at Idealista urges caution in light of the new Royal Decrees published in recent months. They are generating uncertainty in the market and so are slowing down growth – families and investors alike are deciding not to use their savings to buy a home and rent it out, in the short term at least, and that trend may become more widespread over the coming months.

Original story: Idealista

Translation/Summary: Carmel Drake

House Sales to Foreigners Fall Sharply in the Balearic and Canary Islands

13 May 2019 – El Confidencial

According to data from the General Council of Notaries, sales to foreigners fell by 15.3% in the Canary Islands and by 13.5% in the Balearic Islands during the second half of 2018, compared to the same period a year earlier. This is significant because overseas buyers currently account for almost 38.5% of sales in the Balearic Islands and 34% in the Canary Islands.

Several property developers have been feeling the pinch. Competition has increased a lot, above all in some local markets, and prices have risen in certain areas, due to a shortage of land and increased competition, which is deterring demand.

House purchases by foreigners have also been showing some signs of stagnation at the national level, with lower growth rates recorded in 2018. Foreigners closed 50,249 operations last year, which represented an increase of just 1.4% YoY.

The Brits are back

Despite the decreases, the most active buyers during H2 2018 were the Brits (15.3%), followed by other foreigners from outside the EU (12.1%) and then the French (8.0%), Germans (7.5%) and Romanians (7.1%). In the case of the British, it seems that the initial shock of the results of the Brexit referendum (which caused purchases by Brits to fall by 23.6% in H2 2016 and by 16.1% in H1 2017) has worn off.

Original story: El Confidencial (by E. Sanz)

Translation/Summary: Carmel Drake

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

Andalucía’s Property Market is Operating at Four Speeds

3 March 2019 – ABC Sevilla

According to INE, more than 100,000 homes were sold in Andalucía in 2018, a figure not seen since 2008. That figure represented an increase of 13.1% YoY, but growth was far from uniform across the region.

The main driver was the province of Málaga, where almost 32,500 homes were sold last year, up by 5% YoY. In fact, Málaga, along with Barcelona, Madrid, Alicante and Valencia accounted for almost 40% of all house sales in Spain as a whole in 2018 (with 235,000 sales between the five provinces).

Elsewhere in Andalucía, 17,626 homes were sold in the province of Sevilla, up by 19% YoY. Its rate of growth was higher than in Málaga since the recovery started there two years later.

In this sense, Francisco Martínez-Cañavate, President of Fadeco Promotores (pictured above), points out that “there is a lot of demand in the province of Málaga; then there is a second speed in Sevilla; a third in Cádiz, Granada and Almería; and finally a fourth in Córdoba, Huelva and Jaén”.

Original story: ABC Sevilla (by E. Freire)

Summary/Translation: Carmel Drake

INE: One Third of House Purchases in León in 2018 were Financed by Cash

2 March 2019 – Diario de León 

According to Spain’s National Institute of Statistics (INE), 3,128 homes were sold in the province of León in 2018, of which one in three were paid for in cash. This is a growing trend in the real estate market, as savers look for investment alternatives in the face of instability in the financial markets and the high returns being offered by property, due to house price rises and rental price increases.

In the province of León, 2,024 mortgages were signed in 2018, up by 4% YoY, whereas 11% more house sales were recorded compared to 2017.

Original story: Diario de León (by María J. Muñiz)

Translation: Carmel Drake

Savills: House Sales will Exceed 500,000 Again in 2019

19 February 2019 – Voz Pópuli

For the first time since 2008, more than half a million homes were sold in Spain last year, and the good performance is expected to be replicated in 2019 with forecasts that between 500,000 and 600,000 homes will be sold.

The deceleration of the Spanish economy – which will move from growing at a rate of 2.5% in 2018 to around 2% this year – is not expected to prevent the residential sector from consolidating its growth, although the maximum levels recorded in 2007, when 775,300 operations were signed in the country, is not going to be repeated.

“We do not think that we will return to those figures. Staying at the sales levels seen over the last two years, of close to 550,000 units sold, will be an excellent result”, explained Arturo Díaz, Executive Director of the residential market at the consultancy firm Savills Aguirre Newman, speaking to Voz Pópuli.

He considers that this rate of growth is reasonable if we take into account the rate of household creation in the country, the levels of purchases for investment and the purchases for holiday homes (…).

The real estate consultancy CBRE agrees with this outlook (…). In fact, the firm is more ambitious with its forecasts as it expects 625,000 house sale operations to be closed in 2019, due to an increase in demand (…).

The growth profile

The main real estate consultancy firms all agree that there will be an increase in new build sales in 2019, in parallel to a slight decrease in the sales of second-hand homes, and so the gap between the two will begin to close.

Moreover, they confirmed that a change has taken place in terms of the profile of house buyers in Spain, with large international investors playing an increasingly greater role.

“Whilst a decade ago, demand for residential assets was dominated by domestic private families (individuals), nowadays, the market is characterised by investment vehicles, institutional funds and insurance companies – owned by foreign capital in many cases – the most active players in this segment”, said Lola Martínez Brioso, Head of Research at CBRE.

House prices in Spain rose by 8.2% in 2018, according to the Real Estate Statistics Registry from the College of Registrars, which means that they are still well below the peaks reached during the construction boom. In 2019, the sector expects the price rises to moderate (to around 4-5%) (…).

Although the price rises will be more moderate overall, there will be important differences by area (…). By region, the experts forecast that the large cities and their metropolitan areas will continue to lead the charge in terms of house price rises, specifically, Barcelona, Madrid, Málaga and the major municipalities in those areas.

Díaz also adds that “other large cities such as Valencia and Sevilla are starting to show a high level of activity”, along with certain holiday markets, “such as the Costa del Sol, Costa Blanca and Costa de la Luz, where the recovery in domestic demand, together with the appeal that those regions have for international buyers, is generating a high volume of purchasing activity”.

Original story: Voz Pópuli (by Alejandra Olcese)

Translation: Carmel Drake

Foreigners are Driving the Housing Market in Spain

31 January 2019 – Eje Prime

Foreigners are boosting house sales in Spain. The number of transactions undertaken by foreign residents in Spain is on track to set a new record, with almost 70,000 sales during the 9 months to September 2018, according to the latest data available from the Ministry of Development.

Since 2010, the purchase of homes by foreigners has more than tripled, from just 21,576 transactions during the first nine months of that year. The major boost came with the approval of the so-called golden visa in 2013, a measure to facilitate visas for real estate investments in Spain amounting to more than €500,000.

Since then, real estate investment by foreigners has doubled. The País Vasco, Cataluña and Castilla-La Mancha have been the regions where transactions have been boosted by the most since then, with multiples of six, five and four, respectively.

In the last year, the drivers have been the sun and the beach, and the central area, with double-digit increases in Murcia and the Castillas. Meanwhile, on the islands and in Cataluña, the number of operations involving foreigners has decreased.

The promise of the golden visa

(…). The PP Government introduced the golden visa model in Spain, in which thirteen member states of the European Union currently participate (…).

In fact, it is the most used element of that legislation: until October last year, it was used by 546 people, according to the Ministry of Foreign Affairs, almost equalling the figure for the whole of 2017, when 563 residency permits were granted to foreigners acquiring property for more than €500,000.

At the end of last year, the European Parliament started to place the focus on this visa policy, warning that it was opening the door to crimes such as tax evasion, corruption and money laundering.

In a report, compiled by the MEPs Ludek Niedermayer (Europe’s Partido Popular) and Jeppe Kofod (Socialists and Democrats), the European Parliament warned that the economic benefits of such programs do not compensate the “serious risks” of money laundering and tax evasion, and called on the Member States to withdraw from these types of schemes “as soon as possible”.

Original story: Eje Prime (by C. De Angelis)

Translation: Carmel Drake

House Prices Will Rise by 5%+ in 2019 & Sales Will Grow by 13%

8 January 2019 – Expansión

The normalisation of the market in Madrid and Barcelona will make way for high growth in provincial capitals such as Valencia, Málaga, Palma and Sevilla. Rents will rise by more than 10% in the large capitals and sales could exceed 600,000 units in total.

Housing is going to enter a new phase of the cycle in 2019. After a year of expansion in 2018, with growth brushing the records seen before the crisis, this is going to be the year of consolidation, but also of awakening in the medium-sized capitals.

A panel of experts consulted by Expansión foresees an average price rise of more than 5%, and an increase in the sales volume of between 10% and 13%, which means that house sales may exceed the threshold of 600,000 units. That would make 2019 the seventh consecutive year of improvement in the residential sector after prices decreased by more than 30% during the years of the crisis.

Madrid and Barcelona, which inaugurated the recovery in 2016 and which have been leading the housing charge until now, are going to begin a process of normalisation. The experts agree that moderation will be felt in those two markets in particular. In the case of Barcelona, the political uncertainty, control measures from the Town Hall and price levels reached could lead to corrections in some districts where prices have already peaked.

This year, it will be the new capitals that will lead the growth of the market. The last quarter of 2018 already closed with three revelations: Valencia, Málaga and Tarragona led the increase in sales prices, with rises of more than 15%, according to data from Tinsa. In 2019, the experts are placing their focus on those and other cities, such as Sevilla Alicante, Palma, Bilbao, Murcia and Zaragoza. In the large capitals, price increases will exceed 10%.

The rise in sales prices versus the stagnation of wages will continue to cause demand to increase in the rental market, which will rise by around 7%, and by more than two-digits in the large cities, where price tensions are even greater. The volatility of the financial markets will continue to make rental a very attractive investment option. Nevertheless, the experts warn that the uncertainty regarding the measures approved by the Government in terms of the rental segment could put future investments at risk.

Whether the sector tends towards a plateau or rather moderate growth will depend on factors such as the evolution of the economy, policy changes by the ECB and the measures that the Government decides to introduce.

Original story: Expansión (by Inma Benedito)

Translation: Carmel Drake

Pisos.com: House Sales will Amount to 520,000 in 2018

29 November 2018 – Expansión

The housing market is going to break a record in terms of sales in 2018, by exceeding the 500,000 threshold for the first time since 2008. The strength in demand and the pull of the large capitals is going to translate into 520,000 house sales this year, up by 13% compared to 2017, according to forecasts from the portal Pisos.com.

On the other hand, the dynamism of the market and the shortage of available supply in the areas where demand is greatest will continue to cause prices to increase. They could close this year with a rise of 6%, with a price per square metre of €1,700/m2, and in 2019, flats will cost between €1,750/m2 and €1,800/m2 on average.

In terms of forecast house sales in 2019, the Head of Research at Pisos.com, Ferran Font, explained that “these figures will be maintained, given that the upwards trajectory is close to reaching its reasonable ceiling”. “Over the next few years, we expect the sector to close between 500,000 and 600,000 sales per year. If that figure were to increase to 800,000, it would be a bad sign for the sector”, added Font.

The arrival of investors into the real estate market explains part of the upwards performance of the sector. 25% of house sales were made without the need for financing, “which shows that property is serving as a good refuge for investment during the period of low interest rates”.

Andalucía, Cataluña and Madrid are the autonomous regions where most house sales are taking place. Nevertheless, the entry of the Community of Valencia into the leading regions is worth noting. According to Font, it is a growing market, where there is a lot of activity. As a result, the Community of Valencia is where there are the most sales for every 1,000 inhabitants. Meanwhile, Madrid will close the year with 78,000 house sales, up by 13% YoY to account for 15% of the national total.

In Barcelona, by contrast, “there is a change in the trend”, warns Font. The increase in house prices that the Catalan capital experienced at such high rates during 2016 and 2017 has reached its peak in 2018.

As a result, demand is moving to other towns. “Initially, it was moving towards the outskirts, but now it is moving towards adjoining municipalities” noted Font.

The maximums reached in the Catalan capital and the reorientation of demand are having an effect on the number of sales registered in Barcelona. At the beginning of 2017, Barcelona was growing at double-digit rates. But by the end of last year, sales had started to moderate, and during the first quarter of 2018, they started to register YoY decreases of 17% (…).

Original story: Expansión (by I. Benedito)

Translation: Carmel Drake