Spain House Sales Rose Last Year (For First Time Since 2010)

11 February 2015 – Bloomberg

Spanish home sales increased last year for the first time since 2010, adding to signs that the property market is recovering from the worst recession in the country’s democratic history.

Transactions rose by 2.2 percent from a year earlier to 319,389 units, according to data compiled by the National Statistics Institute. That’s still far below the peak in 2006, when 955,186 properties were sold.

“We are out of the operating room but we are still in the hospital,” said Fernando Encinar, co-founder of, Spain’s largest property website. He said 2013 was “the worst year of all for Spanish real estate sales, so any comparison will look good.”

More than two years since applying for a European Union rescue of its banking system, Spain has become one of the fastest-growing economies in the euro area as exports surge and investment rebounds. The country is poised to have the highest growth since 2007 this year.

Tinsa, Spain’s largest homes appraiser, said today that home prices fell 2.7 percent last year, taking the drop since values peaked in 2007 to almost 42 percent.

Original story: Bloomberg (by Sharon Smyth)

Translation: Carmel Drake

Housing: Rental Yields Now Exceed 5%

3 February 2015 – El País

Property has become a safe haven again for savers and retirees.

Rental properties offer returns of between 5% and 7%. After almost seven years of falling prices, credit constraints and low yields on bank deposits, property “has become a safe haven again for savers and retirees” said Jesús Duque, Vice-President of Alfa Inmobiliaria.

Buy-to-lets have become a good investment option once more, as they provide much higher returns than those offered by financial institutions. Furthermore, prices continue to fall, although that trend is now slowing. The price of second-hand homes in Spain decreased by 0.1% during the month of January to reach €1,592 per square metre, according to the latest real estate price index published by Idealista. The year-on-year decrease was 5.1%. Nevertheless, the outlook is set to change as prices in five autonomous regions (Murcia, Valencia, Cataluña, Madrid and the Balearic Islands) increased.

To generate income, one cannot buy just any house. When looking to invest, one should focus on homes that have permanent demand, i.e. those with a central location. The most stable investments are properties located in middle class neighbourhoods, since they have risk-reward relationships that offer more stability over the long-term.

“It is much more worthwhile to invest in a neighbourhood in any city, rather than in a house on the beach, where the possibility of renting is usually limited to the summer months”, explains Duque. The greater the rate of rotation, the lower the profit. Several months may pass between tenants during which time the owner receives no income and also has to upgrade and repair the property. “Whenever possible, if you are looking for a stable investment, you should try to rent out your property for long periods”, said the expert.

Family homes amd those with space for at least two adults are better than one-person studios, for one-income households. And, almost more importantly, you must ensure that the rent will be collected and that it will cover the investment. This can be done through an objective analysis of the tenant’s ability to pay, but can also be supplemented by non-payment protection insurance, which although decreases the profitability of the operation, does provide security.

One should keep in mind that from the expected yield of 5% to 7%, an owner should deduct 1% to cover the payment of IBI, community costs, garbage collection, insurance and the repair and maintenance of the property.

Original story: El País (by Sandra López Letón)

Translation: Carmel Drake

Spain’s Top Cities Show Signs Of Housing Recovery

21 January 2015 – WSJ

Spain’s residential real-estate recovery is a tale of two cities: Madrid and Barcelona.

Barcelona is the only city in Spain to post an annual increase in home prices during 2014. Prices in the city rose 2.8%, with some neighborhoods gaining as much as 8%.

Madrid, too, has fared better than most. While it hasn’t enjoyed price gains, Madrid’s decline of 4.9% last year was better than the 5.7% drop for Spain overall, according to, a Spanish property website.

The price performance in Madrid and Barcelona helps explain why Spain’s construction sector is expected to make a comeback in 2015 after seven comatose years, as demand grows amid a modest economic recovery. Most of the building will take place in Spain’s two biggest cities.

“You have to look at Spain as if it were two countries,” says Fernando Rodríguez de Acuña of real-estate consulting firm R.R. de Acuña & Asociados in Madrid. “There’s the Spain that’s recovering. That’s the Spain that has the big cities and wealthy coastal areas. Then there’s the Spain where we went crazy during the housing boom, and that’s not going to recover for at least 10 years.”

New housing permits in greater Madrid were up 26.4% in the first 10 months of last year compared with the same period in 2013, according to the latest available data from Spain’s Ministry of Public Works. Most of the residential construction, investors say, is apartment buildings. Loans to build residential housing in Spain overall were up 25.6% in the third quarter of 2014 from a year earlier, according to Spain’s General Council of Notaries.

No one expects a surge in building comparable to the boom days. Nearly the same number of building permits in greater Madrid were issued in June 2006, at the height of the building frenzy, as in the first 10 months of 2014.

The construction comes as Spain tries to digest an estimated one million unsold empty houses, which can seem “counterintuitive,” says Fernando Encinar, head of research at, a Spanish property website. “In 2015, there will be a high level of housing stock at the national level, but a deficit of housing in certain markets that will allow for the construction of new homes.”

Even within Madrid and Barcelona, there are major differences. Home prices in an exclusive neighborhood of Madrid, Chamartín, fell 2.2% in 2014, while another neighborhood south of the center, Villaverde, saw declines of 14.6%, according to data from

Spaniards who didn’t lose their jobs during the country’s downturn and have been waiting for house prices to slow their decline are among the most likely buyers, analysts and investors say. Banks also have been more willing recently to issue home mortgages to buy the newly built houses.


Fernando Moliner Robredo, Chief Executive of Actívitas Inversión Inmobiliaria SL, the developer of a 105-unit apartment building in the Villaverde neighborhood of Madrid, says a postcrisis building lull created a need for housing. “In Madrid, new housing stock won’t cover demand for more than six or nine months,” he says.

Luis Martín Guirado and César Barrasa, executives at Sareb, Spain’s “bad bank,” say they also are seeing an uptick in demand for land beyond Madrid and Barcelona, including along the Mediterranean Coast and the Balearic Islands.

The expectations for construction growth in Spain break from the norm in other European cities hard hit by the financial crisis. Residential property development in Europe has generally remained sluggish.

“The standout would be Germany, which has been able to maintain robust levels of capital investment,” said Simon Rawlinson, head of strategic research at construction-consultancy Arcadis . “Most others have not.”

Before the crisis, cheap mortgage lending helped drive housing construction in markets like Spain and Ireland. Spain’s construction sector started to collapse in 2008, as the market was clogged by the building boom. The bust saddled banks with billions of euros in bad loans, forcing lawmakers to request a €41 billion bailout from the European Union to shore up confidence in the stability of the country itself.

The signs of life in Spain’s building sector come as the number of unemployed has declined and as the country’s economy—the fourth-largest in the European Union—is expected to grow more than 2% in 2015, among the strongest performers in the region.

But the country’s recovery is a modest one. Unemployment is still a staggering 23.7%, the highest in the EU after Greece.

An increase in construction now “doesn’t mean that everything is going well in the real-estate sector,” says Mr. Rodríguez de Acuña. “Construction is happening in very specific areas and at very competitive prices, which is why they are able to sell it.”

Original story: WSJ (by Jeannette Neumann in Madrid and Art Patnaude in London)

Edited by: Carmel Drake

What Is Driving The Boom In The Sale Of Second-Hand Homes?

14 January 2015 – El Economista

New homes that are more than two years old and those sold by banks are considered to be “used homes”.

The real estate website says that the methodology used by the National Institute of Statistics (INE) to compile statistics on housing sales explains, at least in part, the “hegemony” of used housing over new housing.

Analysis prepared by idealista news recalls the latest statistics published by INE, which showed a 20.6% decline in the number of new home transactions in November (down to 7,767 homes) versus a 41.6% upturn in the sales of existing homes (to 17,433). Thus, 69.2% of the homes sold during the month were used.

However, the website notes that, only part of this “hegemony” of second-hand housing is explained by “the greater bargaining power that individual homeowners have versus developers”; the rest is down to two other factors.

How does INE define used homes?

Fernando Encinar, Head of Research at says that, at first glance, it appears striking that no new homes are being sold, but, points out that there is more to this data than meets the eye. This is because new homes that remain unsold after two years are classified as second-hand by INE.

Moreover, Encinar points out that “in the case of banks, they accumulate lots of newly constructed homes in their portfolios that have mainly been awarded e rate developers. For tax purposes and in INE’s survey, those properties are also considered to be used homes”.

The difference between new and used housing is also important for the Tax Authorities. In this way, if a brand new house is acquired, VAT of 10% is levied on the transaction.

For this purpose, the definition of a new home also includes a home that a person buys from the developer after having leased the property for at least two years. If, however, the purchaser were another person (not the tenant), then the sale would be considered to pertain to a second-hand home.

Finally, the website explains that when an existing home is sold, the purchaser must pay a property transfer tax (ITP), the rate of which varies by autonomous region.

Original story: El Economista

Translation: Carmel Drake

The Municipalities Where Major House-Buying Power Comes in Handy

5/12/2014 – El Economista

According to official statistical data, housing prices keep dipping in most of the Spanish citites. However, given the current economic circumstances, the financial effort which needs to be made to purchase a home is still considerable. And the affordability gap between cities and municipalities spreads wide.

Ad rem, Malaga’s municipality of Nerja requires a as its inhabitants must intend their 10.5 year’s earnings to be able to buy a property, reports

Also, more than ten years to pay their home off need households in Eivissa and Santa Eulalia del Rio, Ibiza (10.2 years in both). Sant Just Desvern, Barcelona, takes the fourth position with a need of 9.7 years’ savings on average.

Still, more than 9 years’ rates are shown in Mogan (Las Palmas, 9.5 yrs), Sant Josep de Sa Talaia (the Balearic Islands, 9.2 yrs) and Sanxenxo (Pontevedra, 9 yrs). The top 10 list closes at Sant Antoni de Portmany (the Balearic Islands, 8.9 yrs), Baiona (Pontevedra, 8.9 yrs) and San Bartolome de Tirajana (Las Palmas, 8.6 yrs).

What About Less Effort?

One the other side, the Valencian Community and its municipalities of Onda and Villareal (Castellon area, 2.5 and 2.6 yrs on average respectively), as well as in Ontinyent (2.6 yrs), Mollerusa (Lleida) and Tortosa (Tarragona) with 2.7 years both, show better affordability rates.

Main Provincial Cities

The study also analyzes provincial capitals with Barcelona opening the ranking with 8.1 years, followed by Cadiz (7.4 yrs), A Coruña (7.2 yrs) and Madrid (7 yrs). Further on, there position Salamanca (6.5 yrs), Santander (6.5 yrs), Malaga (6.2 yrs) and Seville (5.8 yrs).

When it comes to residential markets, the biggest effort is required from citizens from municipalities surrounding Barcelona: Hospitalet de Llobregat (7.8 yrs), El Prat de Llobregat (7.6 yrs), Cornella (7.6 yrs), Badalona (7.4 yrs), Montcada i Reixac (7.3 yrs) and Sant Adria del Besos (7.2 yrs). Among Madrid’s cities, only San Fernando de Henares (7.7 yrs) lives up to the bar.

According to the information source, Lleida‘s inhabitants make the smallest effort (3.3 years of income), and so do citizens of Castellon (3.8 yrs), Guadalajara (4.3 yrs), Huesca (4.4 yrs) and Alicante (4.5 yrs).

In order to prepare the report, portal employed official average taxable income rates per contributor and compared them with an average price of a 80 square meter apartment in each of the municipalities included in the study.


Original story: El Economista

Translation: AURA REE

The Sale Homes Increases 8,8% In June

08/08/2014 – Expansión

The sale of homes has increased by 8.8% in June compared with the same month in 2013, reaching a total of 26.076 transactions, due to the boost of the second hand market, according to an announcement today by the Spanish Statistical Office (INE).

It is the fourth increase in a row after those experienced in March, April and May, when the sale of homes rose more than 22%, 5% and 5,4%, respectively, putting an end to ten consecutive months of year-on-year declines.

The figures published by the Spanish Statistical Office (INE) relate to sales recorded on the property registers based on deeds of sale from the months prior to that of the data.

Looking only at month-on-month data (comparing June with May), the sale of homes declined 7,3%. As for the year-to-date total (from January to June against the same period in 2013), a drop of 5,4% has occurred.

The year-on-year growth in the sale of homes has been due to the 17,4% increase in the sale of second hand homes, which have reached 16.257 transactions. On the other hand, the sale of new homes declined at a rate of 3% year-on-year, to 9.819 transactions.

The combined total, the number of homes registered as being transferred on the property registries (based on deeds of sale already finalised) in the month of June was 125.817, which represents 8,8% less than in the same month of 2013. In the case of the registered sales of homes, the number of transfers has reached 56.250, which represents an annual increase of 5,9%. The autonomous regions of Navarre, Aragon and Castille-Leon have the most activity. In June, the total number of transferred homes filed on the property registers for every 100.000 inhabitants reached the highest amount in Navarre (566), Aragon (536) and Castille-Leon (512).

The autonomous regions which have registered the highest inter-annual changes are Navarre (27,1%), the Balearic Islands (11,4%) and the Basque Country (10,9%). On the other hand, the one which has shown the lowest increases is Castilla.

Despite the improvement, analysts warn of the dangers of being overly optimistic. The head of studies at, Fernando Encinar, believes that this data “could lead to false expectations among sellers”, being based on a comparison with 2013 which was the worst year in the real estate sector.

Encinar believes that this data “could generate a greater resistance to lowering prices”, when the statistics also show a fall of 7,3% month-on-month after fewer homes than ever (9.819) were sold in June.

Meanwhile, the head of studies of, Beatriz Toribio, explains that the recovery of the property market will be slow and modest, given that although sales are slightly increasing and the fall of prices is slowing down, credit remains very limited and the labour market situation is still very complicated, which constrains the demand for homes from private individuals.

Original article: Expansión
Translation: Aura REE

Housing: 13 Homes Unsold For Every Thousand Inhabitants In The Provincial Capital Cities

07/08/2014 – Cinco Días

Spain is accumulating in its provincial capitals 12.6 unsold homes for every thousand inhabitants. The figure has risen 55% since August 2011, when the number of unsold homes in the Spanish capitals was 8.1 for every 1,000 inhabitants, according to data from the property portal, which has checked the properties of its database against the official data of the last municipal register of residents of 2013.

Alicante is the Spanish provincial capital with the highest density of second hand homes per inhabitant. The city, capital of the Alicante province, has 25.8 second hand properties for sale for every thousand inhabitants. After Alicante, Ciudad Real has the greatest number of homes per inhabitant, with an average of 25.6 homes for every 1,000 inhabitants.

Next on the list is Bilbao, where the density is 21.7 homes on sale for every 1,000 citizens. At the other end of the scale is Huesca, with 5.9 homes on sale for every 1,000 inhabitants, the Spanish capital with the lowest density of homes compared with its population.

Behind Huesca are Murcia (6.4 homes), Teruel (6.5 homes), Cuenca and Santa Cruz de Tenerife (7.1 homes in both cases). “The data demonstrates that despite the fact that the number of completed buy-sell transactions has increased compared with a few years ago, it is still not sufficient to absorb the stock of homes which has been accumulating,” affirms Fernando Encinar, head of studies at “The price reductions have led many buyers to decide to take the leap to becoming landlords, but the macroeconomic data does not indicate that it is enough to significantly reduce the stock in the short term.”

Original article: Cinco Días
Translation: Aura REE

Home Buyers Haggle Down Prices by 21%

24/07/2014 – El Economista & El Confidencial

Discounts demanded by property purchasers in June averaged at 21%, according to portal

The figure is by two percentaige points lower than the December 2013 datum posting 23%.

Sellers trading their properties through the website have received 20.000 bids during the last month.

By provinces, the biggest discrepancy between the asking price and the buyers´expectations was found in Girona (-26%), Badajoz (-25.5%), Lleida (-25.2%), Tarragona (-24%) and La Rioja (-23.6%).

On the other hand, bargaining turned out to be less effective in Zamora (-15.2%), followed by equally tough sellers in Palencia and Soria (-16.6%in both) and in Albacete (-17%).

Descending to the city level, Bilbao purchasers asked for the biggest discounts (-23.2% price slash), only a little bit less in Zaragoza (-23%), Seville (-22.2%), Valladolid and Valencia (-21.8% in both). Barcelona (-20.6%) and Madrid (-20.1%) rank further in the list which is closed by Caceres (-11.8%) and Jaen (-10.4%). gives several advices to sellers who would fancy avoid cuts in their property´s asking price without losing the visiting rates:

1. Setting the price higher than your neigbhors to have some negotiation margin will only result in their selling the homes faster.

2. Respond calls and messages rapidly.

3. Be flexible when it comes to your apartment´s visiting hours and make sure you will be at home at that time to show it.

4. Take an advantage from current popularity of renting. Maybe it´s time to change the strategy and put the house up for rent and enjoy increasing returns.

5. Weight each offer up. Setting an eye-catching price and being ready to negotiate are the key elements of a successful sale.


Original article: El Economista, El Confidencial (by E. S.)

Translation: AURA REE