Málaga Will Need 6,000 New Homes Per Year To Meet Demand

5 April 2016 – La Opinión de Málaga

Indicators for the housing market are starting to recover after years of a complete slump in house sales, however high rates of unemployment and family indebtedness mean that most of Málaga’s population still has limited possibilities when it comes to buying a home.

Nevertheless, the Bank of Spain predicts in a report that the province of Málaga will require 84,812 primary homes between now and 2029 to meet the demand for new households that will be constituted during that period. The study predicts that in Málaga, in a scenario built on actual economic and population trends in recent years, more than 6,000 new households will be created each year, a figure that makes it the second most dynamic province after Madrid (where more than 21,000 households are expected to be created) and ahead of Sevilla (4,097), Murcia (3,564) and Granada (3,104). The figures are negative in 17 Spanish provinces because the population forecasts indicate that there will be fewer households overall. (…).

These calculations do not mean that all of those homes will have to be built from scratch. The report reminds its readers that one of the legacies of the crisis in the country has been the persistence of the stock of finished homes that have still not been sold. In fact, the Bank of Spain says that the potential demand reflected in the study “may be met through the construction of new properties, but also in the first instance, through the sale of homes that have already been built”. Besides, many new families may choose to rent or buy second-hand homes.

In Málaga, according to the most recent official figures from the Ministry of Development, the housing stock contained 12,672 homes at the end of 2014, although the Association of Construction Companies and Property Developers in Malaga (ACP) believes that this figure may have now been reduced to almost half. (…).

The rest of the country

At the national level, the report says that 63,000 households will be created each year in Spain, under the base case scenario and 238,000 households will be established in the most optimistic scenario, resulting in a potential housing volume for that period of between 900,000 and 3.3 million. According to the Ministry of Development, the stock of new homes pending sale in Spain comprised around 540,000 units at the end of 2014, having decreased gently since 2010. (…).

Original story: La Opinión de Málaga (by José Vicente Rodríguez)

Translation: Carmel Drake

Pozuelo Consolidates Its Position As The Richest City In Spain

2 March 2016 – Expansión

Families living in Pozuelo have the highest incomes in Spain (€70,298) and Parla has the highest active population rate, at 70.5%. The cities with the highest average incomes in Spain are the Madrilenian suburbs of Pozuelo and Majadahonda – €56,164 – and Sant Cugat del Vallès, in Barcelona – €52,881 – which quintuple the average income in Torreviaje (Alicante) – €13,977 – the lowest.

The figures relate to 2013 and have been extracted from the Urban Indicators study published yesterday by the National Institute of Statistics (INE) for the European Urban Audit project, which compiles information about the living conditions in European cities and in the case of Spain, includes information about the 109 largest towns, on the basis of population density and the size of the urban centre.

After Torrevieja, the lowest average incomes are found in Sanlúcar de Barrameda and La Línea de la Concepción, both in Cádiz, with averages of just over €17,000.

The four cities with the highest active population rate in Spain are located in Madrid. Behind Parla, the ranking includes Fuenlabrada (69.4%), Torrejón de Ardoz (67.7%) and San Sebastián de los Reyes (67%). By contrast, the towns with the lowest active population rates are located in the North of the country. The lowest rate is in León (50.6%), followed by Ferrol (51.4%), Gijón (51.5%) and Avilés (52.1%).

The study also shows that the richest city in Spain, i.e. Pozuelo, is the one where unemployment is lowest, at 9%, followed by Las Rozas (10.2%), San Cugat de Vallès (10.4%) and Majadahonda (10.7%). These figures come in stark contrast to the rates of 42.3%, 40.1% and 39.4% registered in the towns with the most unemployment, namely Sanlúcar de Barrameda, La Línea de la Concepción and Jerez de la Frontera, all in Cádiz. (…).

If we consider employment by sector, then Elda (Alicante), Rubí (Barcelona) and Torrejón de Ardoz are the towns with the highest proportion of jobs in the industrial sector, whilst Pozuelo de Alarcón, Benidorm (Alicante) and Girona are the employment leaders in the services sector.

Barcelona is the city with the highest number of overnight tourists, with more than 18 million, followed by Madrid, with just over 17.5 million, Benidorm with 13 million and Palma de Mallorca with 8 million. Finally, the cities with the largest average household size were Pozuelo, Melilla and Ceuta, and those with the lowest were Huelva, Salamanca and Torrevieja.

Original story: Expansión (Mercedes Serraller).

Translation: Carmel Drake

Banks Still Hold Doubtful & Foreclosed Assets Worth €224,000M

5 November 2015 – Cinco Días

Spanish financial institutions held doubtful and foreclosed assets amounting to €224,000 million on their balance sheets as at June 2015, according to data published by the Bank of Spain in its latest Financial Stability Report.

In its report, the body led by Luis María Linde (pictured above) warns that these unproductive assets are placing “negative” pressure on entities’ income statements, reducing their ability to generate profits, since they do not generate any revenues. These two types of assets represent 8.7% of the total assets of the banks in Spain.

Nevertheless, the volume of assets foreclosed or received in lieu of debt payments from businesses in Spain, held on the financial institutions’ balance sheets decreased by 0.9% in the last year to amount to €81,000 million. (…).

Meanwhile, at the consolidated level, the total amount of refinanced or restructured credit increased to €211,000 million as at June 2015, of which 52.1% related to non-financial companies and 45.2% corresponded to households.

Less refinanced credit for the private sector

2.4% of the total related to loans to Public Administrations, whilst the remaining 0.3% corresponded to financial companies other than credit institutions. The total volume of loans to the private sector that had been refinanced or restructured amounted to €163,800 million in June 2015, i.e. 15.8% less than in the same month a year earlier.

The Bank of Spain said that this variation represents an acceleration in the decrease seen over the life of the index, which began in March 2014. The decrease in the volume of refinancings and restructurings over the last year has been centred around non-financial companies (17.5%) and households (13.5%).

Meanwhile, the weight of refinancings and restructurings over the total credit balance has also decreased in recent quarters to account for 13% in June 2015, compared with 14.2% in the same month a year earlier.

Doubtful loans accounted for almost half of the refinanced and restructured loan balance (with a slight decrease of one percentage point with respect to last year), whilst those classified as sub-standard loans represented 18% of the total and those regarded as up-to-date (performing) loans accounted for 33% of the total.

In terms of the distribution of refinanced operations by sector, 64% corresponded to loans granted to companies, whilst the remaining 36% related to household debt.

Half of the refinanced operations relating to companies corresponded to loans granted to companies operating in the construction and real estate sector.

Finally, 26.2% of the restructured operations relating to households corresponded to loans granted to finance house purchases.

Original story: Cinco Días

Translation: Carmel Drake