24 September 2015 – El Mundo
The (average) recovery currently happening in the Spanish housing sector is characterised by its uneven nature. It really depends on the area of the map you look at. You could almost say it varies by neighbourhood. That is one of the main findings from the first “Solvia Market View” report about the trends in the real estate market, prepared by Solvia and presented in Madrid by Javier García del Río, the Director General of the servicer. As the study points out, the engine of the recovery is clear: it’s Madrid.
“Madrid is setting the pace of recovery in the sector. It is ranked as the hottest market, with a significant volume of development activity, especially in the North and North-East of the city; and prices there are rising” according to the report. Besides Madrid, it is mainly Barcelona and the Costa del Sol that are showing the best signs of recovery from a real estate perspective, in the form of increases in prices, transactions and residential construction activity.
In other words: “The clean up of prices has now concluded in Madrid and Barcelona”, according to García del Río, who highlights the “demand for prime (RE)” factor when he talks about the Costa del Sol. “In other areas”, he adds “the emerging recovery in the property sector still needs to be consolidated”. And he offers advice for this to happen: “Make the product attractive to buyers” (both in terms of the price and quality of properties).
In his opinion, the real estate sector ought to know how to benefit from the “favourable wind that is blowing” at the macroeconomic level at the moment (in terms of the economy, employment, financing, etc) and “move towards a higher degree of sophistication”, with micro analysis by neighbourhood. “Before, the market was driven by supply, now it is driven by demand”, he says. In this way, García del Río talks about a positive “gentle recovery” in terms of overall prices. And he dismisses the desire for any sharp increases: “A rebound like the one we saw in 1993 would not be a good thing right now”.
These general trends set out by García del Río are already bearing fruit for Solvia. Across the country, this servicer – “which was born out of necessity” (to sell Banco Sabadell’s assets)- has seen how the sales prices of its homes increased by 3.9% between January and May 2015, with respect to the same period in 2014. Similarly, Solvia has increased its rate of sales by 1.5% and has tripled its sales of land. “We are aiming to become one of the largest real estate companies in the country, but we also want to improve awareness about the sector”, he says.
Finally, García del Río, does not hesitate in stating that “the rental market needs to grow because socially Spain needs it, above all, to drive mobility, albeit through good operators”, he specifies. At the end of 2014, Solvia estimated that the percentage of rental homes over the total residential stock amounted to 17.6% – with levels exceeding 25% in cities such as Madrid and Barcelona -. Between 2015 and 2017, rental homes are expected to account for between 20% and 30% of Spanish homes at the national level.
Original story: El Mundo (by Jorge Salido Cobo)
Translation: Carmel Drake