Registrars: 99,343 Second-Hand Homes Sold In Q2 2017

4 September 2017 – Expansión

More than 1,000 second-hand homes were sold per day in Q2. During the second quarter of 2017, 99,343 second-hand house sales were recorded, the highest quarterly figure since 2007. That statistic confirms the consolidation of the residential market.

Over the last 12 months, 429,624 properties were sold, and so the experts consider that the sector is reaching its cruising speed. Moreover, they forecast that prices will rise by around 5%, which is the “healthiest” rate to avoid a bubble (…).

Each day, 1,090 second-hand homes are sold in Spain, according to data from the College of Registrars. It is true that not all of those homes are strictly “second-hand”, given that although they have all been sold in the past, some of them have never been lived in (those sold to the banks). However, new build sales are also recovering and overall, demand is booming. Over the last twelve months, 429,624 homes were sold, which is very close to the psychological threshold of 450,000, which real estate analysts consider would represent a return to normality in the housing sector.

“In most markets, the recovery is starting to take hold or has already been established”, said Julio Gil, President of the Real Estate Research Foundation. In his opinion, there are three speeds of recovery: “The first, in large capital cities, islands and the most established areas along the coast. The second, in the most heavily populated capital cities. The third, in small capital cities and areas without much activity”.

“The forecasts indicate that 2017 will close with between 450,000 and 500,000 residential property sales. I think that we are going to reach cruising speed”, says Manuel Gandarias, Founding Partner and Director General at Civislend PFP (…).

New build sales are taking off

“New builds are starting to gain ground. All of the off-plan sales made in 2014, 2015 and 2016 are starting to be recorded in the statistics now. The numbers are going to start to grow”, says Gandarias. According to Julio Gil, this recovery depends “on demand from the youngest generation, i.e. from first-time buyers, being able to access the market”. In reality, new families have been displaced to the rental market, which is experiencing a boom: rental prices are rising significantly and returns on homes are much higher than those being offered on deposits and public debt.

Gandarias explains the effect of this displacement on the buy-to-let market as follows: “There is still a lot of upwards potential for new builds. We are always talking about pent-up demand, and that demand exists, but it still doesn’t fulfil the solvency criteria demanded by the financial institutions”. Gil adds that “ It is absolutely necessary (for society) to redouble efforts in terms of access to housing for young people, with help to make purchases that can be reversed. That is one of the major challenges facing the housing market.

In other words, the market could still grow more. That will happen if employment continues to grow. However, there is a significant threat to mortgage financing and therefore home buying: that of a possible increase in interest rates.

The inevitable rise in interest rates

“A large part of the current recovery is due to the extraordinarily low interest rates” says Gil. “A rise in rates, which will happen sooner or later, will have a significant impact on the real estate market”. The other factor that will determine the behaviour of the future growth of the sector will be the behaviour of demand from first-time buyers.

Meanwhile, house prices are continuing to rise, but not by too much, dispelling fears of a new bubble. In comparison with the same period last year, second-hand house prices have risen by 1.7%, according to Idealista, up from €1,529/m2 in August 2016 to €1,554/m2 now. The highest rises were seen in the Balearic Islands (+1.7%), followed by the Canary Islands (+0.8%), Cataluña and Castilla-La Mancha (+0.7% in both cases). They were followed by prices in Comunidad Valenciana (+0.6%) and Andalucía (+0.5%) (…).

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

CBRE: Spain Needs 120,000-140,000 New Homes/Year

14 June 2017 – Observatorio Inmobiliario

The effective demand for housing has intensified and is expected to amount to between 120,000 and 140,00 units per year over the next two years. That is one of the findings of the Spanish Residential Report compiled by CBRE and presented yesterday by Javier Kindelán (pictured above, centre), Vice-President of the company; Samuel Población (pictured above, right), National Director of Residential and Land; and Lola Martínez Brioso (pictured above, left), Director of Research at CBRE España.

The study concludes that the consolidation of growth and the indicators of economic sentiment suggest a new phase of the cycle, where consumption and investment will continue to lead aggregate demand. The outlook and forecasts point to a continuation of the positive trend in the economy for the period 2017-19. The volume of new homes being constructed is well below the level seen in the 1990s. Nevertheless, an intense increase in the number of projects is being seen, which suggests an eventual recovery in the construction of new homes over the next few years, according to Javier Kindelán.

“The current volume of new home construction is insufficient to satisfy a demand of between 120,000 and 140,000 homes per year”, said Lola Martínez Brioso. “There is potential for the construction of new homes, given that the build rates for the next 2 or 3 years are unlikely to meet demand”, explained Samuel Población (…). “The increase in house construction in areas such as Madrid, Barcelona, Valencia, Costa del Sol, the Balearic Islands and País Vasco, is key to containing the inflationary trend in prices”, he added.

And so, at the national level, the recovery in the sector has been reflected in an increase in house building, itself reflected by a 29% increase in the number of housing permits granted in 2016.

Prices will rise by between 4% and 6% on average

The study also highlights that, although the recovery in the residential market in Spain is not generating any significant tensions in terms of house prices at the aggregate level, sharp rises are being seen in the price of new homes in some local markets where demand is high and the supply of new homes is very limited. CBRE forecasts that house prices in Spain will grow during 2017, with increases of between 4% and 6%, taking into account both new and second-hand homes. “In the case of new builds, prices could rise by up to 8% and by 10% in the large capital cities and in areas with lots of demand”, said Samuel Población.

The construction of new homes is currently concentrated in the markets where demand is most solvent, such as the Community of Madrid, which accounts for 23% of the supply of new homes; Alicante, which accounts for 10%, Barcelona (8%), Valencia (5%), the Balearic Islands (3%) and Málaga (2%). These areas alone accounted for 51% of all the new homes that were constructed in Spain in 2016. The pace of property development will continue in 2017 “but the recovery will spread over to include new areas such as Zaragoza, Valencia and Sevilla”, said Población. (…).

Original story: Observatorio Inmobiliario

Translation: Carmel Drake

Bankia Offers More Than 3,500 Homes With Discounts Of Up To 50%

12 February 2015 – El Economista

Bankia has put more than 3,500 homes up for sale across Spain with discounts “in many cases” of up to 50%, which means that 80% of the homes to be offered by the entity until the end of March have an average price of less than €80,000.

The homes, all of which are second hand, are located in urban and coastal areas, ranging from large capital cities, to metropolitan areas and small towns, said Bankia in a statement.

Valencia is the autonomous region with the largest supply of housing, with more than 1,300 properties for sale, followed by Cataluña, with 800; more than 300 properties will be available in Castilla-La Mancha; 200 in the Canary Islands; and more than a hundred in other autonomous regions such as Madrid, Andalucía and Murcia.

Original story: El Economista

Translation: Carmel Drake