Ministry of Development: New Housing Permits Rose by 23.2% in October

29 December 2018 – El Economista

The permits authorised for new residential construction in Spain amounted to 83,882 units between January and October 2018, which represented an increase of 23.2% in comparison to the same period a year earlier (68,084 units).

According to data from the Ministry of Development, of the total number of permits approved, 66,032 were for flats in housing blocks (a YoY rise of 27.7%) and 17,831 were for single-family homes, up by 9%. Moreover, 19 permits were requested for other types of buildings.

The new build permits authorised are following a positive path so far in 2018, after four years on the rise to reach 80,876 units in total in 2017, which represented an increase of 26.1% compared to the previous year.

In the past, in 2016, permits rose by 28.9%, after increasing by 42.5% in 2015, which consolidated the recovery initiated in 2014, the year that broke seven consecutive years of decreases with a slight rise of 1.7%.

This real estate indicator reached a historical minimum in 2013 (34,288 units), a figure that represented a slump of 96% from the peak registered in 2006 with 865,561 permits.

Original story: El Economista

Translation: Carmel Drake

CBRE: Investment in Residential set to Overtake Offices in 2018

16 February 2018 – Eje Prime

The Spanish real estate sector is going to continue on its path to recovery in 2018. The real estate market is expected to continue to spark great investor appetite although some of the cards may change their order in the deck. For example, the residential sector is set to climb to the top of the ranking in terms of investment demand for the first time since the change in the cycle, whereby surpassing the office segment. Together, the two segments look set to ensure that the sector maintains an investment volume of around €13 billion for the year as a whole, just like it did in 2017.

The keys for the continuation of the positive trend in the sector are the “strong economic forecasts for Spain, favourable financing conditions, the cycle of maturity in the market, the products for sale in the pipeline and the corporate operations underway”, according to the consultancy firm CBRE in its Real Estate Outlook for 2018 report.

The housing market will reign in the real estate sector this year, attracting one-third of all investment in the sector as a whole, according to the consultancy firm and experts consulted by CBRE. Nevertheless, the office segment, which will be demoted to second place in the investment ranking, will not be far behind the residential segment in absolute terms, accounting for 27% of total investment. The remaining third of the investment volume is expected to be split between retail (18%) and logistics (12%), as well as less significant amounts in hotels and other types of assets.

The recovery of the residential sector, therefore, will be strengthened over the coming months, according to the consultancy firm. House prices will continue to rise across Spain in 2018, with rises of around 5% and 6% p.a., and the highest increases in the two most dynamic markets, Madrid and Barcelona. CBRE forecasts that demand for housing will amount to between 550,000 and 570,000 units, primarily second-hand homes.

Nevertheless, following residential development growth in 2017, “we can establish that the trend in the sector will be positive for at least the next three years and that the construction output levels will be absorbed by demand (…), says Samuel Población, National Director of Residential and Land at CBRE Spain.

The executive explained that the sector is immersed in a process of concentration amongst the property developers, where “the ten largest property developers in the country will account for more than 15% of domestic output”. Of those, the director highlighted the listed companies Neinor Homes, Aedas Homes and Metrovacesa, as well as Aelca, Vía Célere, Pryconsa, Amenabar and Kronos, amongst others.

In 2018, the promotion of homes will continue to boom, supported by the high existing demand, with 100,000 permits forecast for the year as a whole. Moreover, Población estimates that, between now and 2020, new homes will reach a rate of demand of between 130,000 and 140,000 units. In terms of the large cities, Madrid stands out “with an average need for 25,000 new homes per year” (…).

Development of new offices and logistics spaces 

Offices and logistics are two segments that grew at record rates in 2017. Above all, in Madrid, where both segments experienced a year of great growth, and that boom is not expected to decrease this year. According to the report, the office market will continue to progress with its recovery (…).

For the Catalan capital, more surface area will be handed over this year than in any year since 2010, most of it in the form of new build properties. Even so, Barcelona will remain well behind Madrid in terms of leasing volumes, given that CBRE estimates that leasing volumes in the Spanish capital will amount to 600,000 m2, compared with 350,000 m2 in the Mediterranean city (…).

In the case of the logistics sector, the segment is currently one of the most attractive markets for investors. After registering record figures in 2017, with more than 1.5 million m2 of space leased, this year, more land will be added to the stock. CBRE estimates that for the sector in Madrid, its main stronghold, 850,000 m2 of space will be leased. That would result in an increase in investment in the logistics sector, which could amount to €1 billion in 2018 (…).

Original story: Eje Prime (by Jabier Izquierdo)

Translation: Carmel Drake

Ministry of Development: Building Permits up by 26% in YTD Sept

30 November 2017 – Eje Prime

Permits for the construction of new homes are soaring. The number of permits granted by the Colleges of Technical Architects for the construction of homes amounted to 60,695 during the first nine months of the year, up by 26.8% compared to the same period in 2016, according to data from the Ministry of Development.

In September alone, the number of permits amounted to 6,718, up by 35.2% compared to the 4,968 granted during the ninth month of last year. If we also include the permits granted for extensions, renovations and restorations, the total figure between January and September amounts to 82,262, up by 19.5% compared to a year earlier.

In September, the total number of permits amounted to 9,038 compared to the 7,378 granted during the same month last year, according to the same source.

Original story: Eje Prime

Translation: Carmel Drake

BBVA Research: RE Sector Makes “Good Start” To 2017

6 June 2017 – El Mundo

BBVA Research has given the real estate sector a “good mark” for the first quarter of 2017, following a “positive” trend in terms of sales, which accelerated the growth in prices. However, the organisation indicated that the sector showed signs of a “significant heterogeneity” by region once again, and that there was a loss of “momentum” in terms of new loans in April due to a decrease in refinancings.

That was according to the latest Real Estate Observatory for Spain report, prepared by BBVA Research, the financial entity’s research service, which acknowledges a “positive trend” in terms of house sales, given that, based on data from the Centre for Statistical Information from Notaries (CIEN), 48,695 homes were sold during the month of March.

This means, after correcting the series for seasonal variations and calendar effects (CVEC), there was a stagnation in sales with respect to the previous month, but an increase in sales (19.5%) in YoY terms. In this way, sales during the 3 months to March rose by 16.2% YoY, above the average for 2016, in large part thanks to the fact that the main determinants of demand “continued their positive tone during the first quarter of the year”, said BBVA Research.

In this sense, it highlighted that employment is continuing to evolve positively, given that the number of people registered for Social Security in April and May grew at an average MoM rate of 0.4%, above the average monthly rate recorded during the first quarter (+0.3%) (…).

Fewer new loans

Nevertheless, the report warns that new loan operations to buy a home stagnated in April, due to a sharp decline in the number of refinancings. According to data from the Bank of Spain, during the fourth month of 2017, new loans to buy a home decreased by 41.6% YoY, a reduction that actually reflects the high volume of refinancings that took place in April 2016. As such, if we exclude refinancings, the number of new loan operations remained stable with respect to the same month last year (-0.1%).

BBVA Research is “certain” that the stagnation is related to the fact that Easter fell in April this year. In fact, the sum of new operations in March and April rose by 13.1% YoY. With this, during the first four months of the year, new loans to buy a home rose by 10.6%, with respect to the same period a year earlier. Excluding refinancings, which decreased by 86% during the same period, the increase in new mortgage loans amounted to 16.5%. (…).

Heterogeneity in terms of price rises

Meanwhile, the growth in house prices accelerated during the first quarter of 2017. According to the Ministry of Development, the average house price amounted to €1,525.80/m2 during the first quarter, up by 0.7% in QoQ terms, after correcting for seasonality (CVEC), in other words, 0.2 percentage points higher than during the fourth quarter of 2016. Moreover, the YoY evolution saw an acceleration in the growth rate to 2.2% during Q1, up by 0.7 percentage points compared to the previous quarter.

In any case, BBVA Research indicates that the evolution of house prices was still “significantly heterogeneous by region” between January and March. After correcting the series for seasonality, price rises were reported in nine autonomous regions (Andalucía, Canarias, Cantabria, Cataluña, Comunidad Valenciana, Madrid, Murcia, Navarra and País Vasco), with particularly noteworthy rises in Cantabria, Navarra and País Vasco – the three regions have shown less activity in previous quarters.

By contrast, average house prices fell during the first quarter with respect to the previous quarter in all of the other autonomous regions, led by Aragón and La Rioja, which saw QoQ decreases of around -2%. (…)….whilst the price increases being recorded in the Balearic Islands, Madrid and Cataluña exceeded 10% in all three cases.

Housing permits on the rise again

Finally, the first quarter of 2017 closed with a renewed growth in construction activity. (…). The number of housing permits rose by 18.7% during Q1 2017. In this way, almost 20,000 new homes were approved during the first three months, up by 3,141 compared to the same quarter in 2016. (…) .

Original story: El Mundo

Translation: Carmel Drake

Twice As Many Housing Permits Were Granted In Málaga In Q1 2017

16 May 2017 – La Opinión de Málaga

The province of Málaga has seen a sharp rise in the number of building permits granted for the construction of new homes during the first quarter of the year with respect to last year and as such, it is recording its best start to the year since the crisis, providing further evidence of the recovery that began in the sector a few years ago.

Specifically, 1,397 housing permits were granted by Málaga’s College of Architects during the first quarter of the year, more than double (631) the figure recorded during the same period in 2016 (a rise of 121% to be precise). To find the highest number of permits granted in the province during the first quarter in recent years, we have to go back to 2008, when almost 4,900 were granted, a year that also marked the start of the recession.

The number of permits dipped to a historical minimum in Málaga in 2014 (when only 798 were granted in the whole year) and since then the heat of the general economic recovery has boosted the figures. In total, 2,454 permits were granted in 2015 and 3,041 in 2016. The data for the start of 2017, which was published at the beginning of May by the College of Architects, confirms the upward trend, and augurs a further increase this year, provided nothing out of the ordinary happens. In fact, during the first quarter, more housing permits have been granted than in the years 2012 (1,134), 2013 (904) and 2014 (798) in total, which were veritable years of drought in the sector. Nevertheless, the number is still a long way below the pre-recession figures (for example, in 2007, more than 27,000 permits were granted). (…).

The college of architects believe that the objective for the province should be to grow year on year to reach an annual volume of around 20,000 housing permits by 2020, which would be sufficient to meet the natural demand of the Malagan population, as well as to supply buyers from further afield, be they domestic or foreign, in search of a second holiday home. (…).

Returning to the data for the start of 2017, the statistics from the College of Architects reveal that the housing permits granted between January and March were primarily concentrated in the towns of Málaga capital (369), Estepona (238) and Rincón de la Victoria (235). Those three towns accounted for 60% of the permits granted in the province during the first quarter of the year. Behind them came the following towns: Fuengirola (127), Mijas (100), Ojén (76), Manilva (67) and Marbella (52). (…).

The number of finished homes rises

In terms of the number of finished homes, the figures for the first quarter of 2017 also show an increase. The College of Architects notes that between January and March, 504 properties were finished in Málaga, representing a significant increase of 84% compared to the first quarter in 2016. The finished home statistics dipped to historical lows in 2015 (when only 1,134 homes were completed during the entire year) and have increased only slightly since then (1,235 in 2016). (…).

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

Translation: Carmel Drake

 

BBVA: Housing Market Makes A Strong Start To 2017

10 May 2017 – Europa Press

BBVA’s latest report highlights the “positive” evolution of the real estate market at the beginning of 2017, given that house purchases are still being “backed” by mortgage financing, construction is continuing to grow and house sales are maintaining their upwards trend.

At least that is according to the “Real Estate Observatory of Spain”, compiled by BBVA Research, the financial entity’s research service and BBVA’s Real Estate area, which states that the recent review of the macroeconomic scenario by BBVA, which forecasts GDP growth of 3% this year, introduces “an upwards bias into the forecasts for 2017”.

In this sense, the entity highlights that house sales maintained their growth rate, supported by the “strong performance” in terms of employment and mortgage loans, whilst construction activity also “remained dynamic”.

According to data from the General Council of Notaries, during the first two months of 2017, 72,371 homes were sold, up by 13.9% compared to a year ago, but in line with the average for 2016 as a whole.

Amongst the factors that BBVA points to as reasons for the improvement in the real estate sector, are the labour market in Spain, which “has continued to improve”, as reflected by Social Security sign-on data, such as the Active Population Survey (EPA). According to the EPA, the number of people in employment grew by 0.6% during the first quarter of the year.

In addition, credit conditions remain “favourable” for households. Interest rates are at minimum levels: the mortgage rate for new operations remains at around 2.2%; meanwhile, the 12-month Euribor rate hit a new minimum in April, closing at -0.119%.

The mortgage market supports residential demand

Moreover, the mortgage market is continuing to drive residential demand. New loans to buy a home rose by 23.5% YoY during the first quarter, excluding refinancings, according to data from the Bank of Spain.

In turn, during the first two months of 2017, almost 12,800 housing permits were granted (20.3% YoY).

Finally, BBVA highlights that the dynamics in the market for land “are still positive”, given that during the first two months of the year, the number of transactions involving land rose by 12.8% YoY, which represents an increase in the traded surface area of 8.8% in one year.

Original story: Europa Press 

Translation: Carmel Drake

IPE: House Prices Will Rise By 5% In 2016

18 July 2016 – Expansión

The recovery of the real estate sector began in 2015, and we are now (in 2016) seeing the consolidation of the end of the crisis, with increases in: property prices, the number of transactions, the number of housing permits and rentals, spreading across the whole country.

After seven years of crisis in the sector, the improvement in 2015 might have seemed like a mirage to many, a temporary bounce or a small sign of stabilisation. Nevertheless, the figures for 2016 are showing that the outlook is strong and that the housing market still has great potential, which means that we no longer need to talk about “blossom in the greenhouse” or an incipient recovery, but rather future growth.

The scenario outlined by the Institute of Business Practice (IPE) in its next edition of the Real Estate Pulsometer, shows a very favourable outlook for the sector, in which average transaction prices will grow by 5% and the volume of sales will increase by 13.9% with respect to 2015. All of this will act as a driver for the rest of the sector, which is also being boosted by construction activity. Thus, the number of projects launched will increase by 9.3% and the number of permits for new homes will grow by 13.9%. It seems that the sun is already shining on all of the major indicators in the real estate market.

In addition to this data, we are seeing a gradual and increasingly rapid recovery of the rental market; a strong increase in the yield on homes; and a clear recovery in the non-residential sector, which set record breaking figures in 2015 and is following a positive trend so far in 2016, with fewer operations, but higher prices.

The indicator that best indicates the recovery of the real estate sector is the number of transactions, which grew by 11.1% in 2015 and which is forecast to rise by 13.9% this year. In addition, the increase in sales does not depend only on purchases by those with significant savings…, which was the main driver of the market in years gone by, but in very specific areas.

More mortgages

During 2016, the opening up of the bank loan tap will drive mortgages up by 10.5% (compared with a miniscule increase of 0.6% in 2015), which will allow buyers to return to the market in search of primary residences, even if they only have small amounts of savings. This means that the improvement in the market will extend to other provinces and neighbourhoods that have not featured on the radars of investors in the past.

In addition, this recovery will also affect plots of land, as well as garages, offices and storerooms, to reach 787,839 operations (up by 10.2%) compared with last year. In total, more than half of these transactions are expected to involve homes.

Based on the data to May, the highest increases in house sales are being seen in the Balearic Islands (where purchases grew by 38.6% between January and May, with respect to the same period last year), followed by Murcia (28.9%), País Vasco (24.3%) and Extremadura (21.7%), according to INE. Nevertheless, the Institute of Business Practice forecasts that, during the year, Madrid, Cataluña, Valencia and the Canary Islands will also see some of the most significant increases. (…).

Original story: Expansión (by Pablo Cerezal)

Translation: Carmel Drake

Ministry Of Development: Housing Permits Rise By 42%

1 July 2016 – El Economista

The number of permits granted by the College of Technical Architects for the construction of homes shot up by 42% during the first four months of the year to 21,577, the best figure recorded between January and April since 2011, according to the latest data from the Ministry of Development.

Despite the increase, the number of housing permits granted still falls well below the maximum levels recorded in 2007, when at the height of the real estate boom, 276,588 permits were granted during the first four months of the year, 92% more than in 2016.

The number of permits granted started the year with an increase of 44%, at 4,943. In February, the YoY rise amounted to 35%, with 5,663 permits; meanwhile, in March, the number doubled to 6,176 and in April the increase moderated to 6.5%, with 4,795 permits.

In total, the number of permits granted for new builds, renovations and extensions during the four months to April stood at 30,236, which represents an increase of 27.6% with respect to 2015.

By type of property, permits to construct housing blocks rose by 45%, to 15,843 licences, whilst permits for family homes grew by 34%, to 5,730. In terms of surface area, the average size of family homes stood at 201 sqm, whilst the average size of apartments was 117 sqm.

Since the Ministry of Development began compiling these statistics in 1991, the number of permits granted reached its historical monthly low in August 2013, when just 1,585 licences were granted. The series maximum was recorded in September 2006 with the granting of 126,753 permits.

Original story: El Economista

Translation: Carmel Drake

Ministry Of Development: Housing Permits Soared By 57% In Q1 2016

31 May 2016 – Expansión

More signs of acceleration in the construction sector. The number of permits to construct new homes have recorded their highest figure since 2011, although they are still a long way below the figures seen in 2006.

The number of housing permits granted by the college of architects to construct homes soared by 57% during the first quarter of the year to 16,782, the best figure recorded during the first three months of a year since 2011, according to the latest statistics from the Ministry of Development.

Despite the increase, the number of housing permits are still a long way below the highs recorded in 2006, at the height of the boom in the real estate sector (…).

The total number of permits granted for new builds, renovations and extensions during the three months to March amounted to 16,979, which represents an increase of 36% with respect to 2015.

By type of property, permits to construct housing blocks rose by 64%, to 12,425; whilst the number of permits granted to build family homes increased by 39% to reach 4,356 permits.

In terms of surface area, the average size of family homes amounted to 203.6 sqm, whilst the average size of flats stood at 118 sqm.

The number of permits granted started the year with a bang, up by 44% in January to 4,943. In February, the YoY increase amounted to 35%, with 5,663 permits, whilst in March the number doubled to reach 6,176.

Since the Ministry of Development began to compile these statistics in 1991, the number of permits granted hit a historical monthly low in August 2013, when just 1,585 licences were granted. The maximum high was recorded in September 2006, with 126,753 permits granted.

Original story: Expansión

Translation: Carmel Drake

Arcano: House Prices Rose By 6.9% In Q1 2016

26 May 2016 – El Economista

House prices accelerated their growth in Spain during the first quarter of 2016, increasing by 6.9% with respect to the same period last year, according to Spanish Real Estate Macroeconomic analysis performed by the independent financial advisory firm Arcano.

The study shows that the recovery is being seen in every autonomous region, regardless of the political colour; both in the new and second-hand housing segments; and in terms of both housing and land. Following a decrease in house prices of 38% in nominal terms and 50% in real terms, Arcano believes that the increase, which began in 2014 “should be maintained due to the positive underlying forecasts for demand, supply and accessibility”.

Specifically, the analysis highlights that the sale of homes in Spain continued to grow at double-digit rates during the first quarter of the year, increasing by 10% YoY, favoured by “significant” demand from foreigners, who now account for 13% of all house purchases in Spain.

Moreover, Arcano explained that another pillar of this data for the recovery of the residential sector is based on the “favourable” macroeconomic environment in Spain, especially the “historical” 12% decrease in unemployment and the subsequent 3.3% improvement in employment and 1.1% increase in wages, following several years of stagnation.

“The economic improvement is allowing pent-up demand for housing to flourish”, says the report, which adds that the recovery of the real estate sector in Spain “is continuing, led by strong fundamentals and a favourable macroeconomic environment in Spain”.

It also helps that house purchases are recovering not only due to necessity on the part of buyers, but also due to investment, given their “attractive” prices in comparison with other assets, explains Partner and Chief Economist at Arcano, Ignacio de la Torre.

In addition, mortgage loans have become cheaper, reaching average levels of 2.38% during Q1 2016, generated by the fall in Euribor. In turn, the number of new mortgages signed in February 2016 rose by 16% YoY, following their increase of 20% in 2015 and 2% in 2014.

In terms of the supply of housing, Arcano says that “it is still very limited”, above all the supply of new vacant homes, which is “practically” non-existent in many areas with high populations and GDP, such as Madrid, Barcelona, Sevilla and Valencia.

Specifically, 46,000 new homes were constructed in 2015, compared with 641,000 in 2007. And although it is true that new housing permits are recovering, they are still a “long way below their historical levels”.

Original story: El Economista

Translation: Carmel Drake