Tag: IPE

Tinsa: Residential Land Prices Rose By 4.1% In Málaga In Q2

17 July 2017 – Diario Sur

The housing sector in Málaga is continuing to grow. The price of residential land in the province rose by 4.1% during the second quarter of this year compared to the same period last year, to reach €1,399/m2, which is €154/m2 higher than the national average, according to data from the appraisal company Tinsa. It represented the highest increase in Andalucía and the sixth highest in Spain as a whole; and it consolidates the upward trend seen over the last two years, a situation that has generated concerns about the possibility that the sector is heading towards a new real estate bubble.

The Director General of the Institute of Business Practice (IPE), José Antonio Pérez, said that, for the time being, the growth is “sustainable”, although he warned that the lack of buildable land on the Costa del Sol to meet the current demand from property developers and investors will limit this trend and may lead to a disproportionate rise in prices in some enclaves. Pérez attributes the lack of supply to “restrictions” imposed by the general urban planning orders in certain municipalities and the slow pace of urban planning procedures. (…).

Tinsa’s report also reveals that the average mortgage granted to Malagan households amounts to €126,815, the seventh most expensive in the country, with a monthly instalment of €592. The percentage of household income spent on paying the first year of a mortgage is 27.6%, almost eight points above the national average (19.9%). The appraisal company highlights that this statistic makes Málaga the province where families spend the highest percentage of their income on mortgage repayments, above the Balearic Islands and Barcelona (21%).

Málaga also leads the list of provinces with the highest number of house sales closed in the last four months, with respect to the size of its housing stock: 32.1 for every 1,000 homes. It was followed by Alicante and the Balearic Islands, which also have “a clear tourist component”, said the report. The appraisal company reminds its readers that the province is home to “a large number of high-end homes” aimed primarily at foreign buyers, which put upward pressure on average house prices.

By contrast, the IPE considers that it is “a mistake” to draw conclusions at the provincial level “because you cannot compare the situation in Villanueva del Trabuco, for example, with that of Marbella”. The institute, which specialises in the real estate sector, highlighted the sea fronts and golden triangle formed by Marbella, Estepona and Benahavís as the areas where demand for residential land is highest, as well as the capital, where Limonar and Valle del Guadalhorce are positioning themselves as the new enclaves for future urban development.

House sales

The Real Estate Pulsometer compiled by IPE confirms that Málaga is seeing one of the strongest recoveries in the sector, together with Madrid, Barcelona and the Balearic Islands. Investors, savers, funds and individuals comprise current demand, which caused house sales to grow by 6% last year; and a similar rise is forecast this year. Currently, half of all purchases are paid for in cash and the other half are financed through mortgages (…).

Original story: Diario Sur (by Alberto Gómez)

Translation: Carmel Drake

Bank Of Spain: Average Housing Yield Amounts To 8.8%

30 April 2017 – Expansión

Housing is still one of the most profitable investments. The net return from buying a home to put it on the market to rent, now amounts to 8.8% on average. That is according to data from the Bank of Spain, which takes into account not only income from the rental of properties, but also the annual appreciation in their values. In other words, if the rental of a home generates an income of 4.4% and the price rises by 5% in twelve months, then its total return would be 9.4%. And that represents an attractive yield, well above the rates being offered on debt and deposits. Moreover, in some places, the real estate market is offering even higher returns.

To this end, Expansión has identified the districts in Spain’s five largest cities where investors can earn more than 10% from buying a home. And the conclusions are clear: 9 out of the 10 districts in Barcelona and 12 of the 21 districts in Madrid already exceed that percentage. In Valencia, 10 of its 19 districts generate returns of more than 10%; in Sevilla, only 1 out of 11; and in Zaragoza, 4 out of 12.

The most profitable districts are concentrated in the Catalan capital, above all due to the very high appreciation in property values there. Ciutat Vella leads the ranking with 27.7%, followed by Eixample (22%) and Horta-Guinardó (20.5%). That same percentage is also being generated in the Madrilenian district of Hortaleza (20.5%), which is not one of the most selective neighbourhoods, but, prices are rising quickly there nevertheless. It is followed by the Centro district of the Spanish capital (19.8%). Following those five, the ranking continues with Rascanya (Valencia) and Tetuán (Madrid), both with a gross annual return of 18.9%.

In the most exclusive neighbourhood of Madrid (the district of Salamanca) the figure is 13.9%. In Sarrià-Sant Gervasi (Barcelona), the average return is 9.8%. Other prime locations such as Chamartín (14.6%) and Gràcia (17.9%) are also very attractive. (…).

“The increase in returns in the city centres is happening due to a cocktail of senior boomers (the generation born in the 1960s) returning to the city centre and the huge boom in tourist rental properties”, said José Antonio Pérez, Director at the Real Estate Practice of the ‘Instituto de Práctica Empresarial’. That means that “now is a good time to buy a small flat or a small building to turn it into apartments for tourists”, said Pérez. (…).

But, investors should not limit themselves only to the large cities to find attractive investments. “Savers should also buy tourist homes in areas along the coast where there is already a lot of demand, or in peripheral areas of large cities that are well connected or in university areas”, advised Pérez.

The recovery in the residential sector is spreading out across the whole country. Slowly and unevenly, but it is happening. (…).

According to Jorge Ripoll, Director of Research at Tinsa, “The best prospects for investment in housing are located in established areas with active markets that are clearly recovering, such as those in Barcelona, Madrid, Málaga, Valencia, San Sebastián and Bilbao, for example”. They are areas “where asset prices are rising and where there is solvent demand for primary residences from those who cannot afford to buy a home due to their inability to have been able to save in the past”, he said.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

IPE: Málaga’s Land Shortage Will Drive Up House Prices

29 March 2017 – La Opinión de Málaga

During 2017, the Malagan real estate market is expected to continue along the path to recovery that it began two years ago, however, the lack of available buildable land along the Costa del Sol to meet current demand from developers and investors looks set to limit the growth of the sector. That is according to the

That is according to the Institute of Business Practice (IPE), which presented the 24th edition of its Real Estate Pulsimeter for Málaga last week. It warned that this lack of available buildable land in certain municipalities could result in the future effect of a rise in house prices in certain enclaves. In fact, the Director of the IPE’s Real Estate Practice, José Antonio Pérez (pictured above), said that this “new bubble” is already being seen in some parts of the Costa del Sol.

“There is more demand than available supply and if we do not resolve that mismatch, we will see prices rise again. The main problem is the lack of buildable land, understood as land that is suitable for the presentation of plans and for obtaining a licence. (…)”, he said.

In his opinion, the lack of available supply is due, on the one hand, to the “restrictions” imposed by the PGOU and the slowness of the urban planning procedure in certain towns compared to others, and, on the other hand, to the fact that some of these plots of land are owned by individuals and investment funds that are not interested in developing them, for the time being at least. Pérez pointed out that Sareb still owns lots of plots of land that it took over from financial entities, which are “clogging up the market”, despite the fact that the bad bank is working as fast as it can to find an exit from those assets.

As part of this trend, the IPE made reference to the special role being played by the so-called “golden triangle” of the Costa del Sol, which comprises the areas of Marbella west, Benahavís south and Estepona east. There, “the price of buildable land is doubling, products that suit the needs of solvent clients are running out and financial competition between landowners is becoming speculative and monopolistic”. Pérez also explained that, given the lack of available land along the west coast, investors are also starting to look for sites to develop along the east coast.

Málaga leads the way

The figures from the Real Estate Pulsimeter (….) confirm (…) that Málaga is one of the most important areas in terms of the recovery of the sector. (…).

House sales grew by 6% (in Málaga) in 2016 to reach a total of almost 26,200; and the IPE forecasts a similar increase for 2017, which would take the figure to around 27,700. Currently, c. 50% of purchases are paid for in cash and the other half are financed through mortgages, which gives us an idea of the importance of foreign buyers and investors here, as they are the main people who can acquire properties without having to resort to financing.

“Malaga’s position of leadership in the real estate sector is also reflected when we draw comparisons between Spain, Andalucía and Málaga with respect to the growth in the number of housing permits granted in 2016 vs. 2015 – the figure grew by 35% in Málaga, and by 20% and 16.9% in Spain and Andalucía, respectively. Something similar happened with the growth in the number of new homes started – Spain, with growth of 33% in 2016 vs 2015, was a long way below the rate of growth in Málaga (54%)”, says the IPE. (…).

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

Translation: Carmel Drake

IPE: House Prices Will Rise By 7.5% In 2016

28 November 2016 – Expansión

According to the Institute of Business Practice (IPE), house prices are booming, driven by a significant increase in sales (+17%). Mortgage lending (+8.7%) and building construction (+25%) are also underpinning the recovery of the sector, which will reach cruising speed in 2017.

Prices, sales, construction permits, mortgage lending, building construction, returns from rental properties…all of the major indicators in the residential market are growing at a strong pace in 2016, the year of consolidation for the real estate recovery. The housing sector has switched gears and is progressing, steadily, towards sustainable figures.

The end of year forecasts from the Real Estate Academic Arm of the Institute of Business Practice (IPE) confirm this trend. Firstly, the forecasts show that the average sales price of homes will rise by 7.5% this year (…). By the end of the year, the average home will cost €144,973, a level not seen since the end of 2012. It is worth remembering that, according to Spain’s National Institute of Statistics (INE), average house prices rose by 4.2% in 2015, the largest increase since 2007 (5.7%). If IPE’s predictions are correct, the price rise this year will be the largest increase since the recovery of the property market.

In addition, according to the XXII Real Estate Pulsometer from the IPE, house sales are soaring, by 17.2%, to reach 414,812 transactions, the best figure since 2010,and 9% higher than in 2013, which is when the sector bottomed out.

Permits and house starts are also rising, but they are starting from a very low base. Permits have increased by 25%, from 35,945 to 44,880. This forecast represents the most abundant activity in terms of cranes since 2012, but it is light years away from the years of the boom, when more than 700,000 house starts were recorded per year. The number of urban mortgages granted – over plots of land, homes, garages, premises, etc. – is expected to grow by 8.7% and the amount loaned is forecast to increase by 14.9%, according to the study, prepared using data from MAR Real Estate’s network of real estate agents and the Network of Qualified Real Estate Advisors, which has been cross-checked with official data from INE, the Ministry of Development, the College of Registrars and the Notaries.

Two speeds

At the same time, the surplus of unsold new residential properties is expected to decrease significantly. At the end of 2015, this stock amounted to 433,583 homes. In 2016, a quarter of that volume has been drained, with 326,295 units left. That figure is less than half the stock recorded in 2014 (675,945), according to the IPE’s study.

Almost all of the unsold homes are located in areas with limited demand or are properties that fail to fit with the current needs. By contrast, in the most established and sought-after areas, such as the centre of Madrid and Barcelona and along the main areas of the Costa del Sol, homes, and even land, are scarce. In other words, the recovery is still happening at two speeds, but the difference is less acute, in the sense that, it is now widespread across almost all of Spain.

What’s more, the residential rental market is recovering strongly (by 4.4% gross per annum, or 8.3% with capital gains) (…).

With these statistics, the residential market is heading towards its cruising speed. The outlook for 2017 is encouraging, although all indicators point towards a slow down in terms of the increase in house prices. (…).

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

Outlook 2016: House Prices Will Rise By 7% & Sales By 17%

28 December 2015 – Expansión

(…). According to the XXII edition of the Real Estate Pulsometer published by the Institute of Business Practice (IPE), the outlook for 2016 is promising. Next year, house prices will rise strongly (by 6.6%), sales will increase by 17.2%, construction of new homes will rise by 12.2%, mortgage lending for urban properties will increase by 16% and stock will decrease by 24.7%.

In addition, the report forecasts a gradual recovery in the rental market, a sharp increase in yields on housing and a full-blown recovery in the non-residential sector, which has broken records in 2015 and on course for a positive 2016, with fewer operations but higher prices.

The most tangible indicator of the real estate recovery will be “the increase in the sales of homes, offices, warehouses, retail premises and land (especially urban)”, says José Antonio Pérez, Director of the Real Estate Department at IPE and the author of the report. (…). We expect to see around 820,000 operations closed in total in Spain in 2016, which represents an increase of 8.1% with respect to  2015 and 23.7% more than in 2014.

Increases across all regions

More than half of the properties sold will be homes. Specifically, next year, 481,500 homes will be sold, i.e. 17.2% more than in 2015 and 50.7% more than in 2014, according to the study, prepared using data from the MAR Real Estate network of estate agents and the Network of Qualified Real Estate Advisors, cross-checked against official figures from INE, the Ministry of Development, the registries and the notaries.

Sales are expected to grow by the most in País Vasco (by 26.8%) in 2016, followed by the Balearic Islands (24.5%), Madrid (23.5%) and Cataluña (22%). Only Castilla-La Mancha is expected to experience a decrease next year: operations will decrease by 2.4% in that region, which has the highest volume of stock per capita in Spain.

In other words, the recovery will continue to take place at two speeds, but the differences (between the speeds) will be less marked, in the sense that, although we will see different speeds, improvements will be seen across almost all of Spain.

In the context of more transactions and increased mortgage lending, house prices will increase significantly. On average, by 6.6%. If we also take into account non-residential assets, property prices will increase by 8.17%, on average.

The market for new builds will also be affected. According to the Pulsometer, cranes will return to our cities, albeit gradually. Specifically, construction permits (which indicate future construction activity) will increase from 58,636 in 2014 to 82,682 in 2016. Up by 41% in two years (in 2015, they already increased by 9% YoY). Moreover, construction will begin on 39,000 residential properties in 2016, up by 12.2% compared with 2015 (34,700). (…).

The changes will also help to reduce the stock of unsold new properties. This surplus amounts to 433,583 homes at the end of 2015. In 2016, a quarter of that supply will be used up, taking it down to 326,295 units. That figure represents less than half the number in 2014 (675,945), according to the IPE’s study.

More mortgages

The real driver behind this consolidation in the residential market is financing. Mortgage lending for urban properties (in other words, not only homes, since the report does not break down non-residential financing) will amount to 426,647 (individual mortgages) in 2015, up by 23% compared with 2014. The figure for 2016 will increase again to 494,890, i.e. 16% more than this year. (…). The average mortgage in 2016 (€122,500) will be higher than since 2011 (€124,862). (…).

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

Gómez-Pintado: Housing Stock Will Decrease By 25% In 2016

23 November 2015 – El Economista

After the summer, the stock of unsold homes in Spain amounted to 462,000 properties, i.e. less than half the number recorded in 2008 (1.2 million). Moreover, this supply is forecast to decrease by 24.5%, i.e. by one quarter, next year, down to 349,377 homes.

That is according to analysis published on Friday by Juan Antonio Gómez-Pintado, the President of Asprima (Madrid’s Property Developer Association) at a conference entitled “Economic outlook for 2016 and trends in the real estate sector”, organised jointly with Sociedad de Tasación.

This estimate, prepared using data from Spain’s National Institute of Statistics (INE), the real estate professorship at the Institute of Business Practice (IPE) and the Network of Qualified Real Estate Advisors (RAIC) indicates that 74% of the remaining stock is located in the Community of Valencia, Castilla-La Mancha, Andalucía and Murcia, and that next year, this percentage will decrease to 51%.

Meanwhile, the stock of empty homes in Madrid will decrease to 6,000 properties next year, whilst in Cataluña it will drop to just over 4,300 homes.

On the other hand, Gómez-Pintado, also indicated that, taking into account migration flows, the need for homes in Spain will amount to around 140,000 properties over the next few years, with Madrid playing a particularly important role, where the figure will range between 30,000 and 40,000 homes.

Original story: El Economista

Translation: Carmel Drake

Barcelona, Madrid & Costa Del Sol Lead Residential Recovery

26 October 2015 – Expansión

Two terms are key in the residential market: “trend” and “it depends”. The first has a clear rationale: investment in housing is a long-term phenomenon and as such analysis should be kept as far away from the short-term as possible. The second serves as a wildcard, in one of the most fragmented markets of all. For example: Is now a good time to invest in a home? Well, “it depends” on where, because the real estate recovery is happening at, at least, two speeds.

On the one hand, we have medium-sized cities with a lot of stock and less established areas, which are weighing down on the results. On the other hand, we have the large real estate centres and main tourist destinations, which are experiencing a resurgence.

According to a survey conducted by the Network for Qualified Property Consultants (RAIC or ‘la Red de Asesores Inmobiliarios Cualificados’) for Expansión, 73.9% of the professionals in the sector think that the three main leaders of the real estate recovery will be Madrid, Barcelona and the coastal regions.

17.39% believe that the leaders of the real estate recovery will be Barcelona and Madrid only, whilst 4.35% put thier money on the cities in the north of Spain. A similar percentage back the Mediterranean Coast.

Madrid and, above all, Barcelona, are experiencing a new period of real estate expansion. House prices increased by 7.4% in Barcelona during Q3 2015 and by 0.2% in the capital, according to Tinsa.

The third most preferred region for investment, since it is recovering so well, is the Costa del Sol, which, unsurprisingly, is regarded as the “leading indicator” of the sector. When prices rise in Marbella and the surrounding area, prices in other areas tend to follow suit.

Javier García-Mateo, Partner in the Financial Advsiory team at Deloitte explains: “Crises always start on the coast, but so too do the recoveries, above all on the Costa del Sol. It was in Marbella that we first began to see price decreases in 2007”. He considers that now is a “good time” to buy on the coast of Malaga. “And the feeling there is even better than in many of the major cities. The coast is a much more volatile market, where the decreases are very acute, but so too are the increases. And demand there is European, not just Spanish”.

Foreigners are the main players. José Antonio Pérez, Professor of Real Estate at IPE, says that purchases by foreigners “are growing twice as quickly as those made by Spaniards, on the coast”. “For the most recent developments sold off-plan in the Costa del Sol and Levante, more than two thirds have been bought by citizens with 12 different nationalities; they demand and pay more, and almost always pay in cash”, added Pérez.

The coast in Alicante is starting to recover strongly too, according to Jorge Ripoll, Head of Research at Tinsa, the largest appraisal company in Spain.

The consultant José Luis Ruiz Bartolomé emphasises another major focus of the residential growth: the metropolitan areas of the large cities. “Opportunities in the labour market are clearly found in Madrid, Barcelona, Valencia and other large cities, and that is leading to migration, particularly young people, to the peripheries of these cities”, he says. “That is where homes need to be built”, he adds.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

IPE: Urban Land Prices Will Rise By 10% In 2015

17 June 2015 – Expansión

Land will be the next market to be affected by the change in the economic cycle. That is the main conclusion drawn by the first Land Pulsometer, prepared by the Institute of Business Practices (IPE). The average price of urban land will grow in 2015 “by almost two-digit figures”, according to the study coordinator, José Antonio Pérez, Director of Real Estate at IPE.

In this way, if in 2014, each square metre cost €147 on average, by the end of 2015, it will be worth €160/m2, the highest figure since 2012. “It is a clear turning point” says Pérez, who says that “investment in land has a threefold economic impact, due to its direct, indirect and induced effectcs”. That means, every euro spent on land leaves a final economic footprint of three euros.

This recovery will take place because prices will increase “at double that rate” on the coast and in the major cities, i.e. at around 20%, “especially on the Costa del Sol, in Levante, the Balearic Islands, the Canary Islands, Madrid, Bilbao, Barcelona and A Coruña”, says Pérez.

These forecasts come a day after the Ministry of Development published its official statistics, which confirmed the beginnings of an upwards trend – from very low figures – in the market for land. During the first quarter, the average price of urban land (per square metre) increased by 5.9%, and in cities (with more than 50,000 inhabitants), the increase was 37.8%. (…)

According to the report, the number of transactions involving buildable plots of land will increase by 5.04% in 2015. Andalucía will account for 22% of operations, followed by Cataluña (16%) and Castilla-La Mancha (11%). (…)

Andalucía and Madrid will generate the most value: €579 million and €508 million, respectively, which means that the two regions alone will account for 42% of the national activity, which will amount to €2,593 million, i.e. 0.25% of GDP. The total impact (direct, indirect and induced) of the market for land will be €7,780 million.

The average price of land in Madrid, the highest in Spain, will exceed €300/m2, followed by the País Vasco and Balearic Islands, where it will exceed €250/m2. (…)

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

Housing: 319,389 Homes Were Sold In 2014, Up By 2.2%

11 February 2015 – Expansión

After three years in decline, INE confirms that the residential sector is on the road to recovery. The greater increases in the number of transactions were recorded in the Balearic Islands (18.5%), Navarra (13.9%) and the Canary Islands (12%).

The National Institute of Statistics (el Instituto Nacional de Estadística or INE) confirmed yesterday that house sales have turned the corner around Cape Horn. The crisis is not behind us yet, by any means, but the sector has begun its long road to recovery, and that is the best news to come out of the property sector in over six years. Residential property transactions increased by 2.2% in 2014.

Last year, 319,389 homes were sold, compared with 312,600 in 2013 and 318,534 in 2012. This represented the first annual statistical increase since 2010, although that year was clearly affected by the termination of the tax relief for first home purchases for individuals earning more than €24,107, which caused numerous families to bring forward their house purchases so as not to miss out on the tax incentive of up to €1,350 per year.

“The year-end figure reflects a rise that, although timid, is a symptom of a significant change in the pace of operations. It is an encouraging piece of data that emphasises the stabilisation of the sector and it is based on the return of financial institutions to the field of finance and on the price adjustments undergone in the market”, said Manuel Gandarias, Head of Research at pisos.com.

In reality, 2014 was the first year since 2007 in which demand grew by itself, without tax incentives or other decisive policies. The worst years of the crisis for the property sector were 2008 and 2009, when residential sales decreased by -28.8% and -25.1%, respectively. In 2010, sales increased by 6.3%. The decline then slowed down gradually in 2011 (-18.1%), 2012 (-11.5%) and 2013 (-1.9%, when tax relief ended completely).

The expected upturn in purchases in due solely and exclusively to the strong sentiment in the second hand market, the real thermometer of the residential sector at a time when new homes are still somewhat mummified, in an over-inflated stock.

Sales of used homes increased to 199,943 in 2014, i.e. 18.4% more than a year earlier. Second hand homes now account for two out of every three transactions (62.6% of the total). These sales had increased by 3.8% in 2013.

Meanwhile, sales of new homes in 2014 amounted to 119,446 (down -6.9% with respect to 2013) and now accumulate four consecutive years of decline.

“This superiority of used homes over new builds is not only based on the larger volume and leeway afforded by the prices of such homes, it is also due to the scarcity of new developments and the effect caused when the banks dumped the new developments they held on their balance sheets, which effectively converted these properties into second hand homes for tax purposes”, said Gandarias.

The number of unsubsidised homes sold increased by 3.2% with respect to 2013, whilst the number of subsidised house sales decreased by 6.2%.

By autonomous region

The autonomous communities that experienced the greatest increases in the number of house sales in 2014 were the Balearic Islands (18.5%), Navarra (13.9%) and the Canary Islands (12%). The largest decreases were recorded in La Rioja (-25.1%), Castilla-La Mancha (-12.6%) and Murcia (-6.3%).

The regions that recorded the most transactions per 100,000 inhabitants in 2014 were Valencia (1,182), the Balearic Islands (1,043) and the Canary Islands (1,015).

83.0% of the sales recorded in 2014 related to urban properties and 17% to rural properties. In the case of urban properties, 55% corresponded to homes. Sales of rural properties increased by 7.3% and sales of urban properties rose by 0.9%. Within this second group, housing was the property type that experienced the highest growth.

The experts expect the improvement in house sales to extend into 2015. The 21st Edition of the Real Estate Heart Rate Monitor (la XXI edición del Pulsímetro Inmobiliario) published by the Institute of Business Practices (el Instituto de Práctica Empresarial or IPE) last week, forecasts that sales will grow by 7.5% this year.

According to the IPE, house prices will grow by 2.5% in 2015. In addition, mortgage lending will increase by 2.5% and the construction of new builds will grow by 7.5%.

Sales have already increased. Will prices rise too? We will know on 9 March, when INE publishes data abour the average house price at the end of 2014.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

The Stock Of New Homes Will Fall By 29% In 2015

9 February 2015 – Expansión

The over-supply of properties is decreasing / The number of unsold new homes will decrease from 662,761 in 2014 to 469,700 in 2015.

The puncture in the paroxysm of greed that was the real estate bubble, left a never-ending mummified trail, a sea of properties strewn haphazardly across the country and without exception. In 2008, when the economy crashed, a squirrel could have crossed Spain from Tarifa to Cadaqués jumping from empty home to empty home. Not anymore. Or not through so many empty new homes at least. The stock of new residential property for sale is decreasing significantly, although in absolute terms the number is still high.

That is the view of the 21st Edition of the Real Estate Heart Rate Monitor (XXI edición del Pulsímetro Inmobiliario) published by the Institute of Business Practices (el Instituto de Práctica Empresarial or IPE). The surplus of homes declined in 2014, for the fourth consecutive year, from 777,000 in 2013 to 662,761. In other words, by approx. 115,000 homes or 14.7% of the total.

Furthermore, the decrease will be even greater in 2015. According to the IPE’s forecasts, the figure will drop down to 469,708 residential properties this year, i.e. 29.7% fewer than in 2014. In other words, almost one third of the stock will have vanished in just 12 months. As many as 193,000 homes.

The over-supply of homes reached its peak in 2010, when the developments that had been started in 2008 were completed – residential construction is a process that tends to take around two years. In 2010, the surplus stock amounted to 931,615 homes, slightly less than twice the number of new, empty homes that will be on the market in 10 months time in Spain (note, stock does not include second-hand homes).

Once again in 2014, Valencia was the autonomous region with the highest number of phantom residential properties and the only one to have more than 100,000. This region, which is heavily influenced by coastal second homes, closed 2014 with a stock of 163,098 units, which will decrease by 27.5% in 2015, down to 118,196, according to the forecasts released by MAR Real Estate and the IPE. Valencia accounts for no less than one in four of all surplus properties, i.e. 25% of the total.

It is followed by Castilla-La Mancha, an unequivocal symbol of the legacy of the years of over-heating, which is expected to have 72,944 homes by December (2015), down 13.6% from a year earlier.

The third autonomous region is Andalucía, which is expected to have 59,563 empty homes by the end of the year, i.e. 41% fewer than in 2014 – not for nothing, the Costa del Sol is beginning to recover. These three regions alone account for 54% of the total stock.

Experts predict that the highest reductions in the over-supply of property will take place in the Community of Madrid and Cataluña, where they expect the figures to decrease by half, i.e. from 27,618 to 13,809 in the case of the former; and from 25,353 to 12,676 in the case of the latter.

“New homes are already being built in Madrid and Barcelona because some areas have been left with very little stock”, says José Antonio Pérez, Director of Real Estate at IPE. However, there are other provinces, especially those in the East “with a large quantity of homes that are going to be hard to sell”, due to the vast number of properties that are suffering from a double hangover: that of the bubble and that of the nearby sea”.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake