Notaries: House Prices Rose By 1.9% YoY In March

18 May 2016 – El Economista

The average house price amounted to €1,261/sqm in March, up by 1.9% with respect to the same month in 2015, according to data from the General Council of Notaries, which reflects an increase in house sales of 5.8% during the period.

Specifically, the notaries registered 38,674 transactions during the third month of the year. By type of home, the sale of flats rose by 4% and by 5.2% in the case of unsubsidised apartments.

The recovery in sales of the latter is due solely to an increase in the sale of second-hand flats, by 8.5% YoY, given that transactions involving new apartments experienced a YoY decline of 18.5%. Meanwhile, the sale of family homes rose by 13%.

Prices increase, as well as sales

In terms of prices, the cost per sqm of the homes purchased in March amounted to €1,261/sqm, which represents an increase of almost 2% YoY. This rise is explained by the increase in the prices of family homes (+7%) and flats (+1.2%).

Meanwhile, the price per sqm of unsubsidised homes rose by 2%. Within this segment, the price of second-hand homes amounted to €1,361/sqm (+1.1%) and of new homes stood at €1,678/sqm (+10.7%).

Finally, the sale of other properties in March amounted to 9,262 operations (+1.2%), of which 37% corresponded to land and plots. The average price of these transactions reached €316/sqm (+96.8%).

Increase in loans

In another vein, the evolution of the mortgage market for the acquisition of homes reflects the recovery in the real estate sector, registering an increase in total loans.

In this way, the number of mortgages granted during the month of March was 29,642, which represents a YoY increase of 4.2%. The average amount of those loans was €153,929, reflecting a YoY rise of 6.2%.

Meanwhile, the number of mortgages granted for the acquisition of properties grew by 16.5% YoY, to 19,611, due to an increase in the granting of loans to purchase homes (+17.1%), as well as a rise in the loans approved for the acquisition of other properties (+10.4%).

Meanwhile, the average amount of these loans reached €134,881 (+5.9%). In the case of homes, the average capital loaned was €125,265, up by 2.7%, and for other properties, the average loan amounted to €240,336, having increased by 29.1%.

More financing for the construction sector

Loans allocated to the construction sector increased by 2.3% YoY in March, to 472 loans in total. The average amount was €277,491, taking the YoY increase to 7%. Meanwhile, the average amount of the loans granted to construct a home rose by 13.7% to €227,582.

Finally, the percentage of homes financed using a mortgage amounted to 46.7%. Moreover, for this type of financing purchase, the loan amount accounted for 78.7% of the property value, on average.

Original story: El Economista

Translation: Carmel Drake

Málaga Is The Most Profitable RE Market In Spain

28 April 2016 – Málaga Hoy

The city of Málaga is centre stage once again for dozens of domestic and international investors and not just because of its good climate and cultural facilities, but because there is money to be made there. And more so than in the country’s other capital cities. In the real estate market, Málaga generates higher returns than the national average and, what’s more, the highest returns of any city on its commercial premises and the second highest returns on its garages.

That is according to a study published yesterday by the real estate portal Idealista, which analyses the percentage profit obtained from investments in a real estate product and their subsequent rental income. In the specific case of Málaga capital, the gross yield during the first quarter of 2016 exceeded that obtained during the same period last year across all parameters, which were already positive.

This year, if you acquire a home and then rent it out, you obtain, on average, a return of 5.9%, i.e. seven tenths more than last year. That exceeds the national average, although only just, given that the average for Spain is 5.7%; Lérida is the most profitable province, with average returns of 8%.

That is one of the factors that has driven the sale and purchase of homes in Málaga over the last two years. The crisis caused a collapse in house prices, which fell by up to 50% in some cases, but encouraged investors, who bought houses for around €100,000 or €150,000 in cash to rent them out. It is worth noting that the returns on private and public financial products are very low…For example, a 10-year government bond generated a return of 1.4% in 2015 and now offers 1.5%, four points lower than the return generated from buying (and leasing out) a home.

According to this report, in Málaga city, the best assets to buy are commercial premises, because they generate a gross return of 10.4%, the highest in the country. The improvement in one year is striking – during the first quarter of 2015, the yield of commercial premises amounted to 8.1%, which represented the third highest in the country, after Córdoba and Granada. In just one year, that yield has increased by more than two points and has exceeded the growth in the other provinces, in such a way that Córdoba has remained almost equal and others, such as Lérida, Zaragoza and Las Palmas de Gran Canaria have surpassed 8%. At the opposite end of the scale, Castellón and Cáceres are the Spanish capitals where yields on commercial premises generate the lowest margin, although even there, they come in above 5%, which is not bad at all considering the return on fixed income securities.

Garages also represent a good investment in Málaga, given that they offer returns of 5.5%, the second highest in the country, surpassed only by Murcia. In the case of offices, returns amount to 6%.

And so, following the catastrophe of the crisis, the real estate market is gradually building up its strength again. Property developers are increasing the number of permits they are requesting to build new homes, although the overall levels are still low, and many banks have started developing properties themselves to improve their assets.

Original story: Málaga Hoy (by Ángel Recio)

Translation: Carmel Drake

Notaries: House Sales Rose By 7.3% In September

17 November 2015 – Cinco Días

House sales rose by 7.3% in September with respect to the same month in 2014, according to data published yesterday by the General Council of Notaries, which has been corrected for seasonal variations. The uncorrected data reflected an even greater increase, of 8.7% YoY.

This information also reveals that the price of these transactions per m2 rose by 1.7%. Despite the fluctuations in the monthly figures, the notaries argue that the series reflects a recovery in house sales although the volume is still a long way below the figures seen before the crisis.

By type of home, transactions involving flats increased by 7.1% in September. This increase was primarily due to sales of second-hand homes, which rose by 13% YoY. Meanwhile, sales of new homes experienced a 19.7% YoY decrease.

On the other hand, sales of single-family homes increased significantly, by 14.7%.

In terms of prices, the average price per m2 amounted to €1,242/m2, representing an increase of 1.7%. This was driven by an increase in the price/m2 of flats (by 2.7% YoY) as well as in the price of single-family homes (by 2.3% YoY).

In the case of flats, the price per m2 of second hand homes rose by 2% to €1,359/m2, whilst the price of new homes increased by 13.6% to €1,632/m2.

In addition, there were 7,394 sales involving other types of property, up by 11.8%, of which 42.6% related to land and plots. The price of these transactions amounted to €201/m2, representing a decrease of 5.7% in YoY terms.

The statistics also reveal a 17.4% increase in the number of mortgage loans granted for the acquisition of properties in August, in line with the rise in the number of transactions, to 12,048.

In that month, the (average) size of mortgage loans remained constant at €122,993.

In terms of the constitution of new companies, there was a decrease of 4.4% in September to 7,062.

The average capital of these companies also decreased, by 14.4%, to reach €15,218.

Original story: Cinco Días

Translation: Carmel Drake

House Sales Increase By 14% YoY But Prices Fall By 1.5%

20 January 2015 – El Economista

31,576 homes were sold in November 2014, an inter-annual increase of 14%; this figure rises to 18.5% per the seasonally adjusted series, according to the Notarial Statistics published this morning by the General Council of Notaries.

The figures reflect a clear stabilisation in monthly sales. Between January and November 2014, the average number of transactions amounted to 29,016 per month, i.e. 17.5% higher than during the same period in the previous year (24,697).

By type of property, flat sales recorded year-on-year growth of 14.4% (19.1% per the seasonally adjusted series), similar to the increase in free market flats (13.9%). This increase in the number of flat sales was due to a strong rise in the sale of existing flats (21.5%), whilst the purchase of new flats declined by 21.0% year-on-year. Meanwhile, sales of family homes increased by 12.3% year-on-year.

In terms of average prices, the cost per m2 of homes purchased in November was €1,194, reflecting a YoY decrease of 1.5%. This reduction in the m2 cost of homes was driven by a decrease in the price per m2 of flats (-3.1% YoY). The price per m2 of family homes increased by 4.1% YoY.

Within the realm of flats, the price per m2 of existing flats amounted to €1,287 (down 1.3% YoY) and the price per m2 of new flats was €1,506 (down 6.4% YoY).

Finally, 7,568 other property-related transactions were closed in November (up 3.8% YoY); 38.0% of which related to land and plots. The average price per m2 of these transactions amounted to €258 (down 12.0% YoY).

Thus, the sector’s monthly figures continue to show that the Spanish property market is stabilising.

Mortgages

The evolution of the mortgage market for the purchase of homes also reflects the stabilisation observed in the real estate sector, having recorded, for the sixth consecutive month, an increase in overall credit, in both absolute and seasonally adjusted terms.

The number of new mortgages taken out during the month of November amounted to 23,264, which represents a strong year-on-year increase of 10.3% (14.7% per the seasonally adjusted series). The average amount borrowed in this case was €126,525, reflecting a minimal increase of 0.1% year-on-year.

Meanwhile, the number of mortgage loans taken out to acquire a property rose by 35.1% year-on-year in November (to 13,857 loans), due mainly to the increase in lending to purchase a home (la concesión de créditos para la adquisición de una vivienda) (37.3% YoY), whilst an increase of 12.5% was recorded for other properties. The average amount borrowed for acquisition amounted to €113,093 (down 0.6% YoY). For homes, average equity was €109,022 (down 0.4% YoY) and the average loan for other properties amounted to €159,533 (up 0.7% YoY).

In turn, the number of mortgages taken out to finance construction rose by 46.8% in the year to November, to 345 new loans. The average amount borrowed amounted to €255,841, representing a year-on-year decrease of 25.7%, driven by a significant decline in the average capital of loans used to construct non-residential buildings (down 50.7%).

Similarly, the number of mortgages taken out to finance business activities increased by 0.7% year-on-year, whilst the amount borrowed decreased by 21.0%.

Finally, the percentage of homes purchased using mortgage financing amounted to 40.6%. In addition, for this type of purchase with financing, the amount borrowed represented an average of 74.9%.

(……)

Original story: El Economista

Translation: Carmel Drake

Resales Double New Property Transactions, Total Up 14% in November

13/01/2015 – Cinco Dias

The property market of Spain keeps on picking up from record-low levels. Real estate sales advanced by 14% year-on-year in November and showed 25.200 transactions, Spain’s National Institute for Statistics (or INE) informs. During the eleven months from January to November, home sales rose by 1.1%, balancing the first-quarter figures which were unnaturally inflated by extremely poor performance a year earlier.

This improvement relies almost exclusively on the pre-owned units’ sales as from January to November their marketing has bettered 15.3%, while the new properties’ sales fell by 15.6%. In November only, the trend reached its peaks with a 20.6% decline for new housing and a 41.6% jump for resales.

In detail, of the 25.200 dwelling units sold during that month, 17.400 were existing and 7.800 were new properties, meaning a proportion of more than 2-to-1. A year earlier, the division shown more approximate numbers: 12.300 and 9.800 units respectively.

The timid opening of the mortgage market gave an impulse to the real estate sector in 2014, stabilizing the six-year continuous slump. Prices have stopped to fall and even rebounded in some places. At the same time, new loans for home purchase moved on, as well as acquisitions.

The November increase follows two previous rises registered over September (up 13.7%) and October (up 16%), running-up since August 1.1% decrease, marking the year’s lowest with 23.500 operations.

During the eleventh month of 2014, the most abrupt increase in housing sales per every 100.000 inhabitants was seen in the Valencian Community (91) and Navarre and Andalusia (81 in both).

In absolute terms, Andalusia leads in the November ranking with 5.319 deals, followed by Catalonia (3.849), the Valencian Community (3.590) and Madrid (3.042).

In relative values, year-on-year, sales went up most in Navarre (up 48.2%), La Rioja (33.3%) and Asturias (30%). Only two regions witnessed fall from the previous year: the Valencian Community (down 3.3%) and Cantabria (down 12.3%).

 

Original story: Cinco Días

Translation: AURA REE

Cevasa Sells an Estate in Madrid, Buys 20% More of SBD Lloguer Social

8/01/2015 – Inmodiario

Spanish rental property company Companía Española de Viviendas en Alquiler S. A., abbreviated to Cevasa, has sold a real estate complex called Santa María de Cabeza, Madrid, to AKM Arganzuela for 35 million euros. The deal included 214 dwelling, 31 retail units and their corresponding parking spaces.

As a result of the sale, Cevasa is going to close the year 2014 with an extraordinary profit of 23 million, once the sold assets’ book value (€8.1 million), as well as taxes and transfer cost deducted.

Besides, Cevasa has purchased a 20% share in Sociedad SBD Lloguer Social, S. A. from Habitatges Municipals de Sabadell, S. A. (VIMUSA). Currently, Cevasa’s share adds up to 80%, demonstrating the company’s commitment to cooperation with the Local Administration on development of properties intended for long-term rents at affordable prices.

Picture: One of Cevasa’s housing developments, www.cevasa.com

Original story: Inmodiario (by the Staff)

Translation: AURA REE

Britons As Number-One Spanish Real Estate Buyers

5/01/2015 – Money Market UK

According to official data, investors from the United Kingdom account for 18.06% of property sales to foreigners sealed in Spain, followed by the French (10.48%), Russians (7.5%), German (6.45%), Belgian (6.19%) and Swedish (6.08%).

Furthermore, non-Europeans also enforced their purchasing share with Chinese representing 3.95%, Moroccan 2.34% and Algerian 1.96% of the sales. Spain’s real estate listing prices have overally increased by 7%. Demand for second homes hits record high showing a 40% rise from the boom peaks.

Foreigners residing in Spain have been demanding more and more since a collapse driven by the recession. Home salesmen performed best in Valencia, the Canary Islands and the Balearics. They sold most in year-on-year terms in Madrid (up 30.4%), Extremadura (25.7%) and Navarra (19.3%).

Aguirre Newman advisors state the strong demand coming from foreign buyers is due to low prices along the Costa del Sol coastline, additionally seeing new property developments being started. Around 90% of the overseas investors is able to buy a housing unit without a mortgage.

Real estate experts have admitted that the Golden Visa scheme which hands over Spanish residency for an investment for half a million euros or more had not come up to the expectations so far.

 

Original story: Money Market UK (by editorial staff)

Summary: AURA REE

UBS Estimates Housing Prices Could Fall Another 8% In 2015

22/12/2014 – Bolsamanía

The sector’s size has shrunk from 12% to 4% of GDP

Housing price may not have reached rock bottom yet. According to a study commissioned by the Swiss bank UBS, the price adjustment in the housing market for 2015 may vary between 5% and 8%. The report states that the improvement will be “weak and unequal,” although it is detecting signs of recovery in the real estate market.

Housing market recovery – slight, slow and unequal

UBS considers the housing market recovery ‘‘slight, slow and unequal’’. In its report on the Spanish economy, cited by Idealista, the bank mentions that issued home building permits totalled less than 34,000, compared to 865,000 back in 2006.

It also points out that the number of dwellings currently being built had plummeted down to 37,000 units  back in 2013. It also highlights almost two million jobs have been lost in the sector and its relative importance has gone from making up 12.5% of GDP down to only 4% at present.

DIFFERING STATISTICS

UBS also points out the discrepancies between official public figures and estimates of private financial institutions. While official authorities speak of a 30% fall, the rest move it up to 40%.

Furthermore, the Swiss bank estimates the price adjustment process will go on throughout 2015. Moreover, it highlights that on average a price decline between 1% and 3% nationwide over the next period will turn up in data from real estate agents. The decline will be higher in official statistics which calculate that the average housing price decrease in Spain will fluctuate between 5% and 8% over the next year.

Original article: Bolsamanía 

Translation by Aura REE

New Houses Spring Up in Northern, South-Eastern Madrid

16/12/2014 – El Mundo

Construction in the capital seems to have regained the pulse lost during years of being halted and focused basically on new neighbourhood of Valdebebas. Thousands of dwellings have started to be raised in the last months in various areas of Madrid, proving the turning point for Spanish housing after the dark times of 2013 has come.

From January to November, 3.043 new building permits were granted to Madrid’s builders and architects, local City Hall’s data shows. These are not only numbers, though. They embody a wide spectrum of renewed and rich residential supply coming forward to meet unsatisfied apetitte for new real estate. What is more, the housing has little or nothing to do with the boom, none in terms of prices (pretty competitive), nor typology (quality and tailor-made), and not even the location (nice areas).

The boiling, long-awaited supply also comes from new players. Thus, traditional developers had to face up to the new realm and learn how to live in harmony with other residential market kings like the banks looking to add value to their repossessed land, and investment funds, which spotted a golden strike in this segment. Moreover, the cooperatives have increased their activity, betting on short- and mid-term development.

Awaiting the large-scale projects to start, such as the 50 Raimundo Fernandez Villaverde and the Cuatro Caminos Metro depots’ plot, cranes work round the clock on the building sites in other locations, like the Arroyo de Fresno and Valdebebas neighborhoods in the north of Madrid and in the Ensanche de Vallecas in the south-east. The three town-planning ventures represent the epicenter of the capital’s new construction, let alone the Sanchinarro, Las Tablas and Montecarmelo developments, also in the north.

Speaking of geographical distribution of the new permits, 701 of the total 3.043 granted (rehabilitations included) were for Villa de Vallecas, 698 for Fuencarral-El Pardo and 573 for Hortaleza areas, simply the most desirable districts.

However, not only does the property development flourish in new and large housing estates, but also in other places where more than a hundred of homes were built. Namely, there were 203 applications for permits in Tetuan, 201 in Moncloa-Aravaca, 157 in San Blas-Canillejas and 155 in Carabanchel neighborhoods.

On the other side, not even a single building permit was granted for Retiro, Chamberi, Puente de Vallecas, Moratalaz and Villaverde. Little available land or few buildings needing rehabilitations cripple new housing production in the first two, while the lingering stock, scares developers off the remaining three. In case of Puente de Vallecas, its closeness to Villa de Vallecas deprives it of the new home opportunities. Of the to-be-built supply, 2.474 are apartments and 569 single-family units (300 in Villa de Vallecas).

As experts point out, the cranes can be found in Puerta de Hierro (Fuencarral-El Pardo), El Barrial (Moncloa-Aravaca) and Las Rosas and Las Mercedes (San Blas-Canillejas). The two places mentioned at the beginning are unique and  supply in there is usually destined for solvent, demarcation-oriented public.

While giving his opinion on new housing types, Carlos Smerdou, CEO of Foro Consultores, said the catalog shares one common feature: tailor-made, and therefore reaching high pre-sales before a project starts. ‘The goal is to respond to a demand which has been waiting for determined products in specific areas for years’, the director explained.

Dario Fernandez, the Residential, Town Planning and Land department Head of JLL, sees eye to eye with Mr Smerdou. ‘Many factors concurred to the increase in new construction, such as dormant demand in matured areas witnessing supply shortages’, he said.  The expert praised the developments in the north, too. ‘Perhaps, these neighborhoods show a good response to more traditional/rational developing behavior, where considerable demand and little supply coincide’.

The exact parameters brought ACR and Allegra to constructing their October-launched Residencial Nature project nearby the Plaza de Castilla square (Tetuan district). ‘The quality, competitive price and meticulous design mark the standard for this and our future developments, to be located in active demand and restrained supply areas’, assured David Botin leading the Development Department at ACR.

Projects Settled on Cheap Land

Looking at results of the firms, it seems their strategy works flawlessly. ACR and Allegra sold 100% of the Residencial Nature in only few months. The closed complex has all types of common areas and 94 apartments at prices ranging from 115.000 and 275.000 euros. And the attractive prices could be set thanks to huge discounts on the land, reaching up to 80% in some parts of Madrid, as well as to limited building activity.

Via Celere‘s chairman, Juan Antonio Gomez-Pintado supports the modus operandi: ‘All the residential product started in 2014 was developed on basis of an exhaustive market study and on the plots where such a diverse product did not exist’. The developer ran property developements in Embajadores, Arcentales and Valdebebas this year, focusing on the best energy efficiency class (A) and special common areas.

In this context, Smerdou adds that the new housing industry walks towards normalization due to adjustment in prices, fundamentally. ‘Average discount in the developed areas of Madrid posts between 30% and 40% from the market’s peaks. Vallecas is an exception with 50%-off values, where banks trade REO land’, he claims.

According to the latest update by Sociedad de Tasacion, in June, a new square meter cost 2.669 euros on average, down 32.9% from June 2007 (3.978 euros). By the capital’s districts, prices fell the deepest in Chamartin (down 46.9%) and in Villaverde (42.1%).

When it comes to features of the new construction homes, Smerdou points out their sizes. ‘The new dwelling units are bigger than those built during the real estate bubble. We return to three-bedroom houses and one-bed and bedsit apartments are going out of fashion’, he remarked. ‘Properties for living are replacing investment units’.

General director at Grupo Ibosa, Juan Jose Perucho adds other indirect keys to their trading success: better expertise in the real estate invoking demand. ‘The fear did not disappear but the buyers seek information about the track and history of managers and developers’, he assured. Grupo Ibosa has set four cooperative property developments in Valdebebas running with almost 200 unsubsidized or partly-public homes inside estates called Auriga, Sagittae, Orion and Atenea.

‘Many believe the pricing cannot be lower so they started to buy homes for living instead of speculative investment’, Mr Perucho said.

 

Original story: El Mundo (by Jorge Salido Cobo)

Translation: AURA REE

Vallehermoso’s Days Numbered As Sacyr Transfers €448 Mn in Its Assets to Sareb

15/12/2014 – El Economista, Economia Digital

Sacyr has just closed conveyance of the second pool of mortgage-collateral assets of Vallehermoso División Promoción (VdP), allowing it to cut in the overall net debt owed to the bad bank of Spain by 448 million euros.

In a statement provided to the Stock Exchange Market Regulator (CNMV) the builder informed the package includes blocks of apartments, shops and add-on elements (finished product).

Following the transaction, VdP has tackled its debt with financial entites by 601 million euros year-to-date.

In turn, Sacyr has broken even with liquidation of its real estate arm, operating on the Spanish market over the last 60 years.

Precisely, the group chaired by Manuel Manrique planned to allocate thousands of dwelling units and millions of square meters of land to the creditors and Sareb in exchange for a progressive reduction of its 2.73 billion in the red. Today, thanks to the two operations with the bad bank, the company owes ‘only’ 130 million.

Five Years in Liquidation

The liquidation of Vallehermoso has practically been its destiny since 2009, although Sacyr kept assuring some third parties had shown huge interest about the firm.

A financial reorganization agreement permitted a three-year prolongation of the payments, until 2013, for finished housing developments and a five years’ term for the rest of the liabilities, mainly land.

However, together with expiration, Sacyr started to swap the properties for debt. The transactions amounted to 400 million euros.

Sareb

The bad bank of Spain became the majority stakeholder in the property manager after receiving non-performing or doubtful loans (50% from Bankia, and the rest from Novagalicia and Catalunya Caixa) worth 580 million euros in total.

After difficult negotiations, the parties agreed on swapping the debt for assets in two phases. First included housing developments under construction and plots jointly valued at 409 million, while in the other Vallehermoso had to transfer another 39 million euro amount in finished products (the homes and shops).

Now, the bad bank will face selling the land for which the company paid tremendous amounts in 2006. For instance, Vallehermoso spent 185 million euros on a 1.38 million square meter piece of rural land in Navalcarnero, Madrid. Although the use was changed, the plot has never seen the 5.000 homes which supposedly were going to stand thereon.

 

Original stories: El Economista, Economía Digital (by Juan Carlos Martínez)