Registrars: House Sales Exceeded 134,000 in Q2 2018

4 September 2018 – Expansión

The housing market is performing well, so much so that forecasts indicate that more than half a million house sales will be completed this year (…) whereby returning to pre-crisis levels.

During the second quarter of the year, 134,196 units were sold, up by 12.4% compared to the same quarter in 2017. That is the highest figure recorded in a second quarter since 2008, when 152,630 sales were registered, according to real estate statistics published yesterday by the College of Registrars.

The slight moderation in GDP growth, which is expected to rise by 2.7% in 2018, according to Government forecasts, has not prevented the real estate market from reaching cruising speed. Domestic demand, which is continuing to sustain the Spanish economy, is allowing for a reduction in the unsold stock of homes, thanks to the pull of large Spanish cities. The strong demand that is driving these figures is also having an impact on prices, which rose by 10.7% between April and June.

“The statistics are continuing to reflect the excellent performance of the sector”, said Ferran Font, Head of Research at Pisos.com, given that during the second quarter, the highest volume of transactions for 40 months was recorded.

The drivers of the increase in prices and demand relate to the increase in consumer confidence in the economy, which has boosted private consumption, and the greater weight of housing as an investment alternative, in a volatile environment where interest rates are low. This behaviour is feeding the forecasts of the experts, who expect 2018 to close with house sales of between 500,000 units, according to the ratings agency S&P, and 600,000, as predicted by the consultancy firm Jones Lang La Salle (JLL).

Nevertheless, the market is not evolving in a homogenous way. On the one hand, the sale of second-hand homes is driving the figures, accounting for 83% of total sales, whilst new build homes are more expensive. Thus, second-hand house sales between April and June recorded their highest figure since the middle of 2007, with 111,537 sales, up by 12.2% compared with Q2 2017. Although by volume there were significantly more second-hand house sales in Q2, it is also worth noting the growth rate of the sale of new build homes, which rose by 12.9% to reach 22,659 units sold.

In terms of prices, the situation is different. In general, new build homes are more expensive than second-hand homes. According to a report published by Pisos.com yesterday, the price of second-hand homes amounted to €1,612/sqm in August, up by 5.5% compared to a year ago.

By contrast, the price of new homes in Spain rose by 5.9% in June, according to data from Sociedad de Tasación. Nevertheless, that figure is skewed by the pull of the large capitals. “The average prices of new homes in Spain rose by 5.9%, but that figure decreases to 2.8% if we eliminate the impact of Madrid and Barcelona, which means that prices are in line with other fundamental factors of the Spanish economy”, indicate sources at Sociedad de Tasación.

The average price of a 90 sqm home in a provincial capital is around €205,600, whilst in the other cities, the average price amounts to €1,605/sqm, which represents a rise of 2.9% compared to 2017.

The Spanish market is still growing at several speeds, with the large cities acting as links in a chain pulling up prices and sales. Madrid, Barcelona and Alicante are the provinces where the most homes were sold during the second quarter (…).

Original story: Expansión (by Inma Benedito)

Translation: Carmel Drake

Tinsa: House Prices Rose by 5.4% in April

7 May 2018 – Eje Prime

House prices are continuing to rise unabated. Finished home prices (new and second-hand) rose by 5.4% in April compared with the same month last year, driven by rises in the capitals and large cities, which saw price increases of 8.7% with respect to April 2017, according to Tinsa’s index.

On average, house prices have now risen by 10.3% since the minimum level reached at the beginning of 2015, although they are still 36.7% below the peak of the boom recorded in 2007. Prices along the Mediterranean Coast were the most severely hit during the crisis, given that they have recorded a cumulative decrease of 45.8% since their maximum level.

That region is followed by the cumulative decreases in prices in metropolitan areas (42.8%) and, despite having seen an 18.6% increase in their value since May 2015, prices in large capitals are still 36.6% below their 2007 levels.

The capitals and large cities are still continuing to perform the driving role in terms of the reactivation of the market, together with the metropolitan areas and the Balearic and Canary Islands, where prices have risen by 5.7% and 5.6%, respectively.

Original story: Eje Prime

Translation: Carmel Drake

INE: House Sales Soared by 23% in January

15 March 2018 – Expansión

The real estate sector is aiming high in 2018 off the back of the economic recovery. Having surpassed the barrier of half a million homes sold in 2017 and whereby made a return to pre-crisis levels, in January, house sales soared by 23% YoY, to reach 47,289 units. It is the best data for a decade, since May 2008, according to the latest data published by INE. That, combined with the 4.5% recovery in prices in February, as estimated by Tinsa’s price index, indicates that the time is ripe for consolidation in the sector. “The consolidation of credit, the improvement in the economic context and the strong outlook for the sector and the economy, in general, explain this reactivation in demand for housing”, explains the Head of Research at Fotocasa, Beatriz Toribio. With respect to December, sales in January soared by 46.8%.

Forecasts for the real estate sector point to increases of 5% in terms of prices and 10% in terms of sales, in line with the forecast evolution of the Spanish economy. Even so, the number of operations recorded is still well below the more than 100,000 homes sold per month in the years prior to 2008, when the real estate bubble burst. Prices have also continued to recover, and whilst in the centre of some cities, they have now recouped their losses, there are still many areas of the country where house prices today are 65% lower than they were in 2007.

On the one hand, the large capitals and coastal areas are leading the increases in prices, boosted by interest from investors, the tourist boom and a shortage of stock and of new homes. In fact, the overheating of prices in many areas is leading to a displacement of demand towards less central areas of those cities.

In terms of sales, the 23% increase is backed by double-digit growth in 13 autonomous regions. Asturias, the Community of Valencia and Murcia lead the rises, with increases of 56%, 40% and 39%, respectively. Nevertheless, only Valencia remained in the top 3 in absolute terms. That community was, after Andalucía, the one where most house sales were recorded in January (7,409 units). Andalucía was the area where most homes were sold, 8,988 units, up by 31% compared to January 2017. The third region on the podium was Cataluña, which recorded 7,334 sales, although at a rate that was well below the average, of 8%. In this regard, Toribio said that although “the political situation may have slowed down activity in the Catalan real estate market, it has not paralysed it completely”.

Meanwhile, in Madrid, 6,526 homes were sold, up by 14%. Together with Cataluña, La Rioja, Aragón and Extremadura recorded the lowest increases in transaction numbers, up by 8%, 5% and 1%, respectively. The geographical differences expand further as you zoom out of the photo. By province, Álava grew by the most (56.5%) and several provinces saw their sales figures fall. Specifically, in Ciudad Real sales decreased by -19.4%, in Zamora by -10.3% and in Badajoz by -7.4%.

The composition of that growth was also uneven by segment, with a clear predominance in terms of second-hand housing. Of the total number of transactions, just 8,272 were new homes, compared to 42,745 second-hand properties, in other words, 17.5% of the assets sold were new and 82.5% were second-hand. Nevertheless, both segments are evolving in parallel, with growth of 23.5% for new homes and of 23% in the case of second-hand dwellings.

Original story: Expansión (by I. Benedito)

Translation: Carmel Drake

Tinsa: House Prices Rose by 3.6% in January

6 February 2018 – El País

House prices rose again in January, in both the new build and second-hand segments. Overall, prices increased by 3.6% with respect to the same month in 2017, according to the appraisal company Tinsa. But the average increase across the country was well below the figures seen in the capitals and large cities as well as in the Balearic and Canary Islands, which recorded the highest price rises of the last 12 months in January, with increases of 5.1% and 4.1%, respectively. In metropolitan areas, the rise amounted to 3.2%, whilst along the Mediterranean Coast, house prices increased by 3%. In small towns, the increase amounted to just 0.9%.

Although average prices in Spain have recovered by 7.6% from the minimum levels reached during the crisis, they are still 38.3% below their maximums of 2007. In fact, the values registered in January place the price of finished homes at June 2013 levels. With respect to the historical maximums, the evolution of the residential market is still slow, in particular along the Mediterranean Coast, where prices are still 47% below their peaks.

The cumulative decrease in metropolitan areas as well as in capitals and large cities is also still above the average, at 43.3% and 39.7%, respectively. The Balearic and Canary Islands are the regions that have performed the best since the crisis, recording a cumulative decrease of 24.1% over the last 10 years, followed by small Spanish towns, with a cumulative decrease of 36.2%.

Original story: El País

Translation: Carmel Drake

Investors Are Buying More Homes Than Ever

12 September 2017 – El Mundo

House and rental prices are experiencing a robust increase, which means a perfect combination for the yield on homes to grow and the residential market to attract investors. In this context, according to the XXV Housing Market Report prepared by the Tecnocasa Group and the Universidad Pompeu Fabra (UPF), 28.7% of the second-hand house purchases closed during the first quarter of 2017 were made for investment purposes.

In fact, the volume of investors buying homes is higher than ever recorded by Tecnocasa and has almost doubled since 2013 (16.3%). “Investors are still finding good opportunities, as well as generating high returns from renting homes out”, says the study.

Tecnocasa took the opportunity to perform a detailed analysis of the investor profile. The first noteworthy fact is that this buoyant demand is coming from people who are older than those typically buying their first home. Specifically, more than half of the investor buyers are aged 45 years old or above. In terms of their employment status, 37.38% are self-employed, 36.18% have permanent contracts and 14.66% are pensioners. The self-employed and pensioner cohorts are both purchasing more for investment purposes than for their primary residence (11.96% and 10.28%, respectively). In terms of the nationality of the residential investors, Spaniards exceed foreigners hands down (85.9% vs. 14.1%).

The large increase in investors, to record levels, is not complaining at the sight of the juicy returns that homes are generating in comparison to financial products, given that the price of money is fixed at 0% and shows no sign of rising. Meanwhile, according to the Bank of Spainthe average home in Spain generates a return of 9.5% – a percentage that reaches the double digits only for tourist properties in certain areas of large cities. Of that gross figure of 9.5%, 4.3% comes from the rent itself and the remainder represents the gain from increasing sales prices.

That is because second-hand house prices rose by 8.24% YoY during the first half of the year, according to the study by Tecnocasa, which works with real prices of sales completed by the company itself. Moreover, the market has entered a positive spiral, which has seen second-hand house prices rise for six consecutive 6-month periods. Above all, in large cities such as Barcelona and Madrid, where second-hand properties are the most expensive in the country, costing €2,754/m2 and €1,970/m2, on average, respectively.

According to Tecnocasa, the significant presence of investors in the market is positive. “If it is true (as some people say) that a new bubble is starting to grow, it will be very different to the previous one (and much less harmful) given that it will not be based on loans, but rather on savings”, says the firm. In this sense, the real estate company stresses that 33.1% of primary residence purchases are paid for in cash, a figure that soars to 78.4% in the case of investors (…).

Moreover, the market for second-hand homes seems to have significant upwards potential, given that prices are currently 48.1% below the peaks of 2007, when the average price per square metre exceeded €3,500/m2.

Original story: El Mundo (by Jorge Salido Cobo)

Translation: Carmel Drake

RE/MAX: The RE Recovery Is Spreading Across Europe

12 June 2017 – El Mundo

The real estate market is growing, not only in Spain, but also in Europe, according to the Housing Report compiled by RE/MAX Europa. This improvement is being reflected in high levels of demand and rising prices, a trend that looks set to continue over the coming months in the property sector of the Old Continent. The good borrowing conditions and the incentives, especially for those buying their first home, are two of the main factors that are driving this growth.

Specifically, in Spain, house prices are stable, with potential for growth. “The increase in wages in Spain, the access to financing, as well as the political stability are posited as the most important factors for driving this upward trend in prices”, explain RE/MAX Europa.

Specifically, since 2015, the sales prices of family homes, as well as of flats and apartments, have increased by 4.5% on average in urban areas, where the average price per square metre has risen from €1,651/m2 to €1,727/m2. House prices in urban areas are expected to increase by 1.8% in 2017 and by 1% in the case of properties located in small towns.

And the picture is even more buoyant in the rental market. Prices per square metre have risen by 9.8% in the large cities and by 7.7% in small towns. In this way, the average monthly rental cost in a Spanish city amounts to around €800/month, whilst in the smaller towns, that figure stands at around €600/month.

The recovery of the real estate sector at the European level is based, above all, on low interest rates and, therefore, loans that are accessible to the public. This situation is “currently being seen in almost every country in Europe”, said the study. “That is resulting in higher demand, which is driving up prices in almost every segment and area”, it adds.

In Slovakia and Estonia, for example, thanks to these favourable conditions, there has been a significant increase in the construction of new homes, said RE/MAX Europa. In Malta, there has also been growth in the rental market, due to the rising number of overseas employees living on the island. Markets such as Portugal, Greece and Scotland “have been recovering really well over the last few years and are now showing clear signs of stable growth, with the prospect of more transactions in the future”.

Cities are improving

The experts at RE/MAX confirm that between 2015 and 2016, sales prices rose for apartments and family homes. In particular, prices per square metre rose significantly in the case of urban apartments, specifically, by 13% in certain cities in Lithuania, Germany and Luxembourg. The sales prices of houses in small towns also rose and are expected to increase by 4% in 2017 in Austria and Estonia. Nevertheless, prices are predicted to remain stable in France, Greece and Switzerland.

Rental prices also increased in 2016. Specifically, by 10% for urban apartments in The Netherlands, Romania and Spain, and by 16% in Malta. The experts at RE/MAX predict that rental prices will increase or remain stable in the majority of Europe during 2017.

One of the most important criteria in determining differences in prices is location. According to Michael Polzler, CEO of RE/MAX Europa, “the sales prices of apartments vary by 64%, depending on whether a property is located in an urban area or in a small town. For family homes, that difference amounts to 44%”.

Original story: El Mundo

Translation: Carmel Drake

Tinsa: House Prices Rose By 6.1% YoY In Large Cities In April

10 May 2017 – Expansión

House prices are continuing to rise sharply, boosted by an acceleration in the large cities and in the Balearic and Canary Islands, according to the latest estimates from the appraisal company Tinsa. Specifically, the price per square metre of properties rose by 2% in April with respect to the same month last year, according to figures published yesterday.

Although those figures are seven-tenths lower than those registered in March for the country as a whole, we cannot speak of a slowdown, given that the general trend over the last few years has been increasingly bullish. Moreover, the data also reveals a growing acceleration in several key markets, such as the large cities, where prices rose by 6.1%, and the Balearic and Canary Islands, where property prices rose by 4%.

In this way, the rise in house prices in Spain’s provincial capitals and large cities has accelerated by six-tenths with respect to the same month last year, to reach its highest rate since the outbreak of the crisis. This increase is being spearheaded by some of the prime areas of Madrid and Barcelona, where supply is constrained and demand is rocketing. Nevertheless, over the last few months, the price rises have been spreading to more and more neighbourhoods, given the strong buyer pressure in the most sought-after areas.

Meanwhile, property prices in the Balearic and Canary Islands are rising at a rate of 4%, driven by two main factors. On the one hand, the high level of demand from overseas buyers. On the other hand, the purchase of homes as investments, given that owners can rent them out easily for short-stays for most of the year, which raises their yields. Prices in these regions have fallen by 27.8% since 2007, i.e. by one-third less than the average.

On the other hand, this situation contrasts with the weakness in house prices along the Mediterranean Coast, in metropolitan areas and small towns, where there the stock of homes for sale is greater and demand is lower. (…).

Two speeds

(…). By way of illustration, house prices in the Mediterranean region are still 46% lower than their peak levels of 2007. (…).

In metropolitan areas, prices are still falling, with a decrease in property prices of 2.6%. That data also represents a slowdown of more than two points with respect to last month and is a kick in the teeth for a market that has seen its price plummet by 45.9% since the real estate bubble burst. The reason is precisely due to the fact that the crash in the market made house prices in the centre of large cities more affordable, which meant that most buyers did not have to move tens of kilometres away to buy a home.

Original story: Expansión (by P. Cerezal)

Translation: Carmel Drake

Rentalia: Tourist Rental Homes Break Records Over Easter

19 April 2017 – Expansión

(…). Over the last few days, Spain’s large cities have experienced occupancy rates of 90.5%, i.e. 9.6% percentage points higher than last year, when the occupancy rate reached 80.9%. That is according to a study of prices and occupancy rates conducted by Rentalia (a company that belongs to the Idealista group). Sevilla, San Sebastián and Barcelona were the cities with the highest occupancy rates.

The cities with the highest occupancy rates over the Easter break were: Sevilla, with 98.3% (+14.6 percentage points higher than last year); San Sebastián, 98.1% (+9.1 points); and Barcelona, 96.6% (+13.9 points). Those with the lowest occupancy rates, but still above the national average were: Granada, 94.7% (+1.4 points); Valencia 93.9% (+12.5); Madrid, 92.7% (+1.2); Gijón, 91.5% (+3.8); Córdoba, 91.4% (+27.1); and Málaga 91.4% (-0.5).

“Beyond the large cities, other areas also recorded good occupancy rates”, said Rentalia. 67.5% of tourist homes on the coast were occupied over Easter, which represents an increase of 19.7 percentage points with respect to last year. Homes in rural areas had an average occupancy rate of 68.7%, which is almost identical to the figure recorded in 2016 (68.6%). “Of all the tourist homes in Spain, including homes in all areas, the occupancy rate amounted to 69.1% in 2017, whereas last year, it stood at 58.2%, which means it has grown by 10.9 points”, said the report.

The average price of tourist homes over the Easter break amounted to €30.40 per person per night. The most expensive cities for renting a tourist apartment between 12 and 16 April were: Ibiza, at €65.20 per person per night; Palma at €50.90; and Barcelona, at €42.30.

The best value-for-money destinations over Easter were Gijón at €20.80 per person per night, Alicante (€21.30) and Valencia (€22.80). In other cities, prices ranged between €24 and €40 per person per night: San Sebastián (€40.60); Málaga, €40.50; Sevilla, €39.30; and Granada €36.10, amongst others.

“In terms of the nationality of visitors, it seems that domestic tourists travelled the most during the Easter holidays, above all, given that 89% of reservations were made by domestic tourists and 11% were made by foreigners”, according to the report.

According to Almudena Ucha, Director at Rentalia, “the occupancy rate this year is the best since 2008. The good weather forecasts and the possibility of going to the beach and enjoying the (traditional Easter) processions without rain means that this Easter broke records for holiday rentals”.

Original story: Expansión (by J. M. L.)

Translation: Carmel Drake

Mitula: Rental Prices Soar In Spain’s Large Cities

25 January 2017 – El Mundo

The residential rental market is riding high at the moment and this good situation is reflected in rental prices, which are soaring in most of Spain’s major cities, according to a study by the home finder Mitula. Specifically, rental prices have increased by more than 60% in Barcelona over the last five years, whilst in Madrid, they have risen by almost 20% during the same period.

In this way, average rental prices in the Spanish capital amounted to around €1,048 per month in 2012, a figure that has grown in a sustained way over the last five years. By January 2017, the average rent in Madrid stood at €1,256, which represents an increase of 19.85%.

Other cities such as Barcelona and Palma have also seen their residential rental prices soar, but to an even greater extent. In the case of the Catalan capital, for example, the average rent has risen from €892 in January 2012 to €1,478 in January 2017, which represents an increase of 65.70%.

Palma has also seen its rental prices move upwards. A rental home in the capital of the Balearic Islands used to cost around €700 per month on average in 2012. Nowadays, the same property costs around €1,000 (€986), up by 40%, according to Mitula.

This upwards trend is being repeated in most of Spain’s major capitals, but there is one exception: Santander. The capital of Cantabria is one of the few cities where rental prices have remained practically frozen. At the moment, a rental home costs €649 per month, on average, which is 2.84% less than five years ago, when the figure stood at around €668/per month.

Original story: El Mundo

Translation: Carmel Drake

ST: House Prices Will Rise By 3% In 2017

18 January 2017 – Cinco Días

House prices will grow by 3% on average this year, driven by the improvement in the economy and employment, but also by the pseudo boom that is happening in the rental sector, in particular in large cities. That is according to Sociedad de Tasación, one of the largest appraisal companies in the sector.

The year that has just started will continue to be favourable in general terms for a real estate sector that, in the words of the Director General of Sociedad de Tasación, Juan Fernández-Aceytuno, is “recovering its sense of judgement”.

Thus, the volume of transactions will continue to grow, the rate of construction will intensify and more mortgages will be signed (although that figure will always fall below the number of house sales); and all of that means that house prices will end the year 3% higher, on average. Nevertheless, Sociedad de Tasación warns against certain risks and key factors that will determine the extent of this improvement in the real estate sector.

The first is what is happening in the rental market. Fernández-Aceytuno again highlighted the large group of potential buyers, such as young people aged between 25 and 35 years old, who are unable to buy a home because of their low wages and because of the precariousness associated with the majority of the new jobs that are being created. Since those people are not buying, many are choosing to rent, which has caused demand in the rental market to soar, along with rental prices. Sociedad de Tasación believes that if no response is given to this insolvent demand, rental prices will continue to rise and that will, in turn, drive up the prices of homes up for sale.

The Director General recalled that the average yield on rental properties in large cities stands at around 6.1% at the moment, which means that the increase in real estate prices in the major cities will be higher than the 3% forecast for the country as a whole.

Moderate pace

Other decisive factors, in addition to the improvement in employment, will be everything relating to financing. The new accounting standards, which the banks must comply with this year, together with the cost of recent court rulings, such as the judgement regarding floor clauses, and the forecast increase in interest rates may have an impact on the conditions for accessing credit over the medium term, which will determine the behaviour of much of the demand.

In any case, the good news, according to Socidad de Tasación, is not only that the main indicators in the sector are going to continue to stabilise, but also that they are doing so in a much more balanced way than in the past. In this sense, the firm gave the example that house prices are growing at more moderate rates now than they did during the previous boom, with rises in line with the number of new Social Security members. Moreover, it highlighted that land prices have not soared by more than house prices, which was also common during the early 2000s.

What’s more, property developers have not started to build homes in an uncontrolled way, even despite the expectation that more new homes are going to be sold. A study compiled by the appraisal company shows that the supply of new homes in Madrid and Barcelona is actually scarce, which means that it will run out within 10 months in the capital and within 14 months in Barcelona. Finally, it describes the rate of property construction along the coast as “very reasonable”.

Original story: Cinco Días (Raquel Díaz Guijarro)

Translation: Carmel Drake