Housing Price Increases Slow Down in Madrid and Barcelona

3 January 2020 The average price per square meter for a residence in Spain reached 1,373 euros in the last quarter of 2019, an increase of 2.6% year-on-year, according to a report by Tinsa. That figure represents the lowest inter-annual growth in almost three years.

Market watchers believe that the frenetic expansion of recent times in Spain’s principal markets is reaching an end. Average prices in Madrid rose by 1.8% between October and December, while falling by 0.8% in Barcelona. Year-on-year growth stood at 3% and 2.9% respectively.

Spain’s secondary markets are now the main drivers of growth. Palma, Santa Cruz de Tenerife, Valencia, Malaga, Zaragoza and Seville all saw increases of over 7% in 2019.

El precio medio por metro cuadrado de una residencia en España alcanzó los 1.373 euros en el último trimestre de 2019, un aumento del 2,6% interanual, según un informe de Tinsa. Esa cifra representa el crecimiento interanual más bajo en casi tres años.

Los observadores del mercado creen que la frenética expansión de los últimos tiempos en los principales mercados de España está llegando a su fin. Los precios medios en Madrid aumentaron un 1,8% entre octubre y diciembre, mientras que cayeron un 0,8% en Barcelona. El crecimiento interanual se situó en el 3% y el 2,9%, respectivamente.

Los mercados secundarios de España son ahora los principales motores del crecimiento. Palma, Santa Cruz de Tenerife, Valencia, Málaga, Zaragoza y Sevilla registraron aumentos superiores al 7% en 2019.

Original Story: Eje Prime

Translation/Summary: Richard D. Turner

Rental Prices Rising Throughout Spain

11 December 2019 – Rental prices in Spain’s less well-known provinces, such as Huesca, Ávila, Jaén and Burgos, are now rising at an above-average pace, compared to the rest of the country. Some of the greatest increases are coming in areas that have been known as the ’empty Spain’ and market watchers believe that the increases will continue during 2020.

According to Fotocasa, rents rose in 38 of Spain’s 47 provinces. The most pronounced year-on-year rises were in Santa Cruz de Tenerife (13%), Alicante (11.5%), Seville (11.3%) and Ávila (8.6%).

Original Story: El Boletin – Luis Suárez

Adaptation/Translation: Richard D. K. Turner

UBS Publishes Report on Cities With Housing Price Imbalances

2 October 2019 – The Swiss investment bank UBS has published its annual report, the UBS Global Real Estate Bubble Index 2019, which analyses residential real estate prices in 24 major cities around the world. The bank stated that half of those cities are either facing the risk of a property bubble or are somewhat to considerably overvalued.  

For the first time, the investment bank added Madrid to its list, stating that, while there seems to be no immediate risk of a speculative bubble, the Spanish capital is suffering from an overvaluation. In 2017, an article in the Economist had already suggested that housing prices in Madrid were about 25% above fair value, and prices have increased steadily since then.

UBS’s index also noted that cities including Munich, Toronto, Hong Kong, Frankfurt, Vancouver, Paris and Amsterdam were at risk of a bubble. Zurich, London, San Francisco, Tokyo and Stockholm are also suffering from significant imbalances. Finally, prices are somewhat overvalued in Madrid, Los Angeles, Sydney, Geneva and New York.

Original Story: El Confidencial – Elena Sanz

Adaptation/Translation: Richard D. K. Turner

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

Valencia, in Search of Land for Construction

21 August 2018

The lack of available land is the reason that only 2% of the acquisitions of homes are for new housing in Spain’s third biggest city by population.

Valencia is after new land to re-energise its real estate market. With stable prices and an increasing number of transactions, the absence of new buildings is palpable in the statistics for the first quarter of this year, when just 2.3% of purchases (a total of 2,658) were for newly-built homes.

With a population that has been relatively stable in recent years, around 790,000 inhabitants, the city of Turia has doubled the number homes sold in the city since 2013, from 4,922 operations that year to 10,973 last year.

This has not yet pushed up prices, but it has been the basis for recovery. After the harsh effects of the crisis (apartments are 45% cheaper today than in 2007), housing prices reached 1,235.60 euros per square meter in the first quarter of this year, according to data on bank valuations at the Ministry of Public Works.

In homes less than five years old, the average price rose to 1,536.90 euros in the first quarter, while in second-hand homes, the investment needed to acquire a home fell to 1,233.70 euros per square meter.

The absence of development ready lands is a fact for the Spanish city’s real estate developers. According to a report by CBRE, the city is currently in the midst of desvloping and marketing sixty new construction projects, and it is expected that twenty more will be put on the market by the end of the year. Companies such as Neinor, Aelca and Aedas have housing developments in neighbourhoods such as Quatre Carreres, Patraix, Nou Campanar and Malilla Norte.

However, the high demand will cause prices to rise if more land is not made available, according to the consultancy. Metrovacesa’s project for the development of Benimaclet could be one of the most outstanding in this regard in Valencia. The real estate company controlled by Santander and BBVA is pushing for an agreement to present to Valencia City Council a project to build 1,500 homes in partnership with the local developer Urben.

Vía Célere is another of the developers active in the city: the company will build 22 homes in the Pechina neighbourhood, next to the Turia gardens. Aedas Homes is more advanced: the Spanish developer has sold another 120 homes in Turia’s capital through its Torres project, a residential complex that will be composed of two 16-floor apartment blocks. Aedas also has 252 flats in Valencia.

Residential prices in Valencia are now 45% lower than before the start of the crisis, but the city has great appeal, and the activity of private operators has been intense. Attikos is another local developer that has carried out work in the city, with the purchase of 1.9 million euros of development-ready land, where it will build 27 houses.

Offices on the rise

With a total of 63,480 companies, 88.2% of which are in the service industry, the office market in Valencia saw record allocations last year. According to a report by BNP Paribas Real Estate, the contracting amounted to 39,500 square meters in 2017, which caused a slight upward trend in rental prices, which are close to 14.5 euros per square meter in the city centre.

“Since the end of 2013, the last year of economic recession, demand has been positive,” the consultancy noted. “The good pace of allocations in recent years, together with the lack of new projects, are generating a considerable adjustment in the vacancy rate of the Valencian market which, fell to 10.4% at the end of 2017, out of a total stock of 774,000 square meters. This means that there are currently 80,546 square meters of available offices on the market,” they added.

One of the most notable operations in recent months was the rental of the former headquarters of CAM, leased by Solvia to the architectural firm Join Contract. The property’s new tenant will remodel it to transform it into a luxury hotel.

Original Story: EjePrime – C. De Angelis

Translation: Richard Turner


Housing Prices Break Records in 16 Regions… 11 are on the Coast

19 August 2018

The increase in the price of housing has been especially pronounced in the Spanish archipelagos.

The real estate sector is already beginning to show signs of heating up on some levels. Many indicators are still below those registered during the real estate boom, but others are already reaching record highs, and not only in Madrid and Barcelona.

In fact, of the 16 localities and municipalities that are already reaching new record highs, 11 are outside of these cities and on the coast.

Sant Just Desvern (Catalonia); Retiro, Salamanca, Centro and Chamberí (Community of Madrid); Benhavis (Andalusia); Calviá, Ibiza, Palma de Mallorca, San José and Santa Eulalia del Rio (Balearic Islands); Gran Alacant (Comunidad Valenciana) and Adeje, Arona, Granadilla de Abona and San Bartolomé de Tirajana (Canary Islands) are the areas where prices have already exceeded the records set during the pre-crisis real estate boom, according to data published by Idealista.

The residential market on the Spanish coast is experiencing a gradual recovery, but there are already cities that have returned to pre-crisis levels. The locations that first began to stabilise after that period are already demonstrating intense growth in prices and new housing construction activity.

However, there are also markets that are still showing signs of the bursting of the bubble, which can be seen in the oversupply of that time and the current weak demand, as Tinsa points out in its report on the Spanish residential market on the coast.

In one year, the areas that were in a situation of moderate adjustment have been reduced by half, from 27.6% to 11.2%. On the other hand, 36.5% of provinces and municipalities near the coast already are in the process of “clear recovery.”

Regarding the trend in prices, statistics from bank appraisals in the first quarter of 2018 reflect positive year-on-year growth in 104 of the 147 coastal municipalities that have available data, compared to 84 that showed positive growth in last year’s report.

Algeciras, Barbate, Cantabria and Asturias: the areas where the recovery is taking the longest to appear

The main signs of a recovery in the market already occurred three years ago, but 2018 has been a year for setting new records, with prices reaching highs in many areas, particularly in the Spanish archipelagos.

There are also other areas, such as the Costa del Sol, the north and south of the provinces of Alicante, the Maresme and around Barcelona. In recent months, some markets have begun to awaken to mainly national demand, where there have been signs of improvement.

On the other hand Algeciras, Barbate, Cantabria and Asturias are the areas where this recovery is taking the longest to arrive.

Need for new housing

The stock of new housing that remained after the outbreak of the crisis also beginning to be absorbed. The stock is at an average level in 47.7% of the areas, although in half of those the supply could be absorbed in the short term, according to Tinsa.

Among the locations where it is practically non-existent (19% of the areas), Ibiza stands out along with the Conil and Tarifa (Cádiz) coasts; Fuerteventura, Lanzarote and south of Gran Canaria, as well as the Basque coast.

It is natural that this has been accompanied by an upturn in the activities of developers. After years of almost total paralysis, where construction was conspicuously absent due to weak demand and overcapacity, developers once again began to increase their operations in specific enclaves of the Alicante coast and Costa del Sol.

The market has been recovering slowly. In half of the areas analysed (50.8%), Tinsa noted that the construction of new housing projects has begun, compared to 36.2% in last year’s report.

Original Story: Vox Populi – David Cabrera

Photo: Teresa García

Translation: Richard Turner


Housing CPI Skyrockets, Rising 3.7%, the Highest Figure in the Last 14 Months

14 August 2018

Broad-based inflation also rose by 2.3% for the Spanish economy as a whole, the highest level since April 2017.

The Consumer Price Index (Housing) shot up in July. Rental expenses and provisions increased by 3.7% in relation to the same month in 2017, an inter-monthly increase of 1.1% and the highest increase since May last year (5.4%).

According to data from the National Institute of Statistics (INE), the CPI – Housing started the year in retreat, with a year-on-year decrease of 2% in January, rising at rates of between 0.8% and 1.4% in the following three months.

However, in the last three months, housing inflation has exceeded the broad-based CPI, reaching over 2%, levels that last seen in November of last year.

As for the broad-based CPI for the Spanish economy, the indicator decreased by 0.7% in July compared to the previous month and decreased by one-tenth of its interannual rate, to 2.2%, according to the data published by the INE.

Original Story: EjePrime

Translation: Richard Turner