Tag: housing supply

Euroval: RE Activity Is Still “A Long Way” Below The Boom Levels

7 June 2017 – Expansión

The real estate appraisal company Euroval has said that real estate activity in Spain is still “a long way” below the levels reached a decade ago.

Specifically, based on data from a simulation that it has performed, Euroval highlights that real estate activity in Spain currently represents a quarter of the level achieved during the real estate boom.

According to the appraisal company, the recent economic crisis “is still taking its toll” on activity in the Spanish real estate sector. In fact, it has highlighted that the number of mortgages granted, the volume of construction revenues and expenses and the number of transactions carried out are still way behind the figures recorded 10 years ago.

By region, whilst in Andalucía, Murcia, the Community of Valencia and Cantabria, for example, real estate activity was operating at 100% in 2004, it is now performing at 13%. Moreover, the autonomous regions that are improving their activity in this sector compared to 2004 are the Balearic Islands (45%), País Vasco (28%) and Navarra and Extremadura (22% in both).

According to Euroval, “there are no known cases of economic sectors in any country representing a similar percentage of GDP as the real estate sector did in Spain at the time of its greatest rise, after which it suffered losses of more than 80% in less than a decade.

The appraisal company considers that the volume of residential appraisals and the supply of housing are the “key” indicators that reflect this decrease. Specifically, in 2006, around 1.3 million appraisals were performed, compared with 625,000 last year.

In 2016, the autonomous region with the highest volume of appraisals was Andalucía, with 129,200. It was followed by Cataluña, with 120,400; Madrid, with 85,300; and the Community of Valencia, with 76,700.

In terms of the housing supply, Euroval’s conclusions highlight the “anomalous behaviour” in terms of housing demand in Spain, given that “despite the significant decrease in prices”, there is still “weak demand in light of the uncertainty surrounding the economy and employment”.

The data from the appraisal company also indicates that this “weak” growth has been concentrated in primary homes above all, which have increased from 15 million units in 2004 to 18 million last year.

The evolution of finished homes used to amount to around 536,600 properties, almost double the number started that year, whilst in 2016, the figures were 50,351 and 34,351 units, respectively. Euroval predicts that the market will tend towards growth over the next two years.

Original story: Expansión 

Translation: Carmel Drake

Airbnb: Holiday Homes Have No Impact On Housing Stock In Palma

4 April 2017 – El Mundo

Yesterday, Airbnb expressed its disagreement with the decision taken by the Town Hall of Palma to prohibit the rental to tourists of homes in multi-family buildings and stated that the occasional rental of a regular home “did not have any impact on the stock of available homes”.

The vacation rental company said in a statement that it wants to work with the Town Hall on the solution and advised that the occasional rental of primary residences helps many middle-class families “supplement their income”.

Airbnb states that the Town Hall has taken “figures that do not correspond to the reality” as a reference and that entire homes in Palma that are rented out for more than 120 nights per year account for just 0.8% of all the homes in the city.

According to data from Airbnb, Palma currently has 171,000 homes, down by 10% from 182,000 in 2011. In addition, it has more than 16,000 empty homes and apartments, a figure that represents more than 9% of the available housing stock in the city. In Mallorca as a whole, the percentage of empty homes is 16% (71,255 units).

The multinational company defends itself, by saying that those who practice “home sharing” are opening up the home they live in and are therefore not reducing the available housing supply.

Airbnb has 5,000 adverts in the city, according to data as a January. However, not every advert corresponds to a single housing unit, given that a host may have two adverts for the same house, for example, if he shares two rooms.

22% of all of the adverts relate to rooms only, which represents 1,100 adverts, which “are not removing homes from the long-term rental market”, given that the people who are renting these rooms also live in the property.

78% of adverts correspond to entire homes, which represent 3,900 adverts. Of those, 36% are let out for more than 120 days per year, a percentage that is equivalent to 1,400 homes. Airbnb says that that is the figure that represents the number of homes that are being deducted from the rental market, which account for 0.8% of the available homes Palma, a percentage that it says is “too low to have any impact on the market as a whole”.

75% of the hosts in Palma that advertise on Airbnb have just one advert and the typical host in Palma rents his property out for less than 60 days per year.

The rental company says that Palma has been suffering from “tensions in terms of house prices” for years and points out that the Association of Residential Property Developers in the Balearic Islands warned back in 2012 that the islands were going to be hit by a shortage of available housing and that the few developments that were being built were going to generate serious difficulties in terms of rising prices.

“House prices rose in the city long before Airbnb even existed and they have evolved in line with the dynamics of the real estate market, with investment in property in the context of a shortage in supply”, said the note.

Original story: El Mundo

Translation: Carmel Drake

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

Tinsa: House Prices Soar In Madrid & Barcelona

4 April 2016 – El Mundo

The housing market is becoming increasingly stronger in terms of prices in Spain’s large cities, with Barcelona and Madrid leading the charge. That is according to Tinsa, which has published its IMIE Local Markets Index for Q1 2016. Between January and March, the value of homes (new and second-hand) in Barcelona and Madrid soared by 9.2% and 7.5%, respectively, in YoY terms.

These high percentages sit well above the average increase across the country, which amounted to 1.4%, with the market recording its second consecutive quarter of increases. Cataluña (8.2%) and Madrid (7%) “are still the drivers, thanks to the dynamism of their respective capital cities”, says Tinsa.

After Cataluña and Madrid, the highest price rises were recorded in the Balearic Islands (3.8%), Castilla La Mancha (3.5%) and the Canary Islands (2.4%). During the quarter, Asturias (+2.2%), La Rioja (+2.2%) and País Vasco (+0.4%) joined the group of autonomous regions with positive movements in their YoY prices. At the other end of the spectrum, the highest decreases were recorded in Aragón (-3.5%) and Galicia (-3.1%), but those decreases have moderated with respect to previous months.

In this sense, for the first time since the start of the crisis, more autonomous regions recorded increases during the first quarter than experienced decreases. (…).

House sales takes 10.5 months on average

Meanwhile, it takes 10.5 months, on average, to sell a home. According to data on the housing supply and the rate of sales in each region, the provinces where it takes the longest time to find a buyer are Cantabria (19 months), Ávila (17.1 months) and Álava (16.8 months). By contrast, the provinces where the housing market is most liquid include Las Palmas and Madrid, as well as the autonomous cities of Ceuta and Melilla, with average sales periods there of less than seven months.

Meanwhile, the percentage of salaries required to pay the first year of the mortgage amounts to 22%, and it takes six years salary on average to buy an average home in Spain.

A recovery that is here to stay

During the presentation of the index, Tinsa’s Director of Products and Diversification, Pedro Soria, said that 2015 was the year of revival for the housing market and 2016 marks the beginning of the sector’s normalisation following seven years of deep crisis.

“The recovery is here to stay, we are embarking on a new more rational and sustainable cycle, and the general decrease in house prices has come to a definitive end” said Soria, who also added that the political uncertainty does not seem to have cooled the recovery. Nevertheless, Tinsa warns that regional markets are operating at different speeds. (…).

More sales, mortgages and construction permits

Tinsa’s Director of Research Services, Jorge Ripoll, predicts that interest rates will remain low in the context of low and negative consumer prices. According to Tinsa’s forecasts, house sales will grow by between 10% and 15% to reach between 440,000 and 460,000 this year, and housing permits will recover by between 30% and 40%, to amount to between 65,000 and 70,000.

In addition, mortgages will grow by between 15% and 20%. (…).

Evolution of prices by province

By province, the quarterly statistics reveal YoY price increases in 25 provinces during Q1, including in Barcelona (8.9%), Albacete (7.6%), Madrid (7%), Lleida (6.5%), Santa Cruz de Tenerife and Girona (both 5.9%). The YoY increase also exceeded the Spanish average (1.4%) in 12 other provinces.

The most acute decreases at the provincial level were recorded in Álava, Teruel and Jaén, with YoY reductions of 7.8%, 6.7% and 6.3%, respectively. Price decreases also exceeded 3% in the provinces of Córdoba, Pontevedra, Palencia, Burgos and Zaragoza. (…)

Original story: El Mundo

Translation: Carmel Drake

Anticipa: 230,000 New Homes Will Be Built Before 2018

22 October 2015 – Expansión

The supply of housing in Spain will grow by 20% p.a. and the market will receive around 230,000 new homes between now and 2018, according to a study by Anticipa and Josep Oliver, a professor at the Universidad Autónoma de Barcelona, which was presented at Barcelona Meeting Point yesterday.

Spain currently has 983,000 homes to sell. In 2018, there will be 978,000 empty units. The accumulation of unoccupied housing stock, which partly explained the crisis in the sector, will remain stable for the rest of this decade and will only decrease if fewer homes than forecast are built. It is expected that the economic improvement will help the formation of new households – and the demand for homes – despite the falling population.

Lluís Marsá, President of the Property Developers (Association) of Barcelona (APCE), warned that the pace of house construction in Cataluña is four times lower than it should be, but he did not dare to predict when it would return to its normal ratio of 3.5 new homes per thousand inhabitants.

The recovery is very heterogeneous. “We have a two-speed market in Spain and when some people hear talk of recovery in the country, it would not be unreasonable for them to respond with a comment such as: “What are you talking about?””, said the CEO of Neinor Homes Madrid, Juan Velayos, during a talk.

Whilst Madrid and Barcelona have shortages, there are still lots of unsold properties left in unpopulated areas, as the CEO of Vertix Barcelona, Elena Massot, highlighted. She warned that the price of land may rise due to the entry of funds into the market.

The experts point to a rise in rentals, which have increased from 10% to 17% in recent years. “This figure is going to continue to rise”, said the Director General of Servihabitat’s real estate business, Juan Carlos Álvarez.

One segment that is very much not in crisis is the hotel sector, which will grow by 72% in 2015 to €1,900 million, according to the consultancy CBRE. This volume reflects a return to pre-crisis levels.

Original story: Expansión (by A. Zanón)

Translation: Carmel Drake