Tag: Madrid

Demand For Holiday Rentals Grows By 25%

20 January 2015 – El Mundo

Requests in inland areas, such as Madrid, recorded an increase of 35%.

Andalucía is the region that accounted for the highest percentage of requests, with 31%.

The analysis reveals that visitors to Spain prefer to holiday in the sun and on the beach.

HomeAway, the online platform for holiday rentals, which has more than one million listings in 190 countries, has published its annual report for 2014. It shows that demand for holiday rentals in Spain increased by 25% with respect to 2013.

According to the analysis, visitors prefer to holiday in the sun and on the beach, although the regions in the North and Centre of the country experienced the highest increases in 2014. Galicia, Asturias, Cantabria, the Pais Vasco and Navarra, despite accounting for an average of 2% of requests in 2014, experienced an average growth rate of 60% with respect to 2013. Of those, it was Navarra that experienced the highest increase in demand for holiday rentals, with a rise of 96% on the previous year.

Meanwhile, requests in inland regions, such as Madrid grew by 35%, and Castilla-La Mancha and Castilla y Leon recorded increases in requests of 127% and 105%, respectively, becoming the regions with the highest increases in demand in 2014. For their part, Extremadura and Aragón recorded increases of 86% and 83%, respectively, to also place them amongst the leading regions by number of requests.

The autonomous regions of Andalucía, Cataluña, Valencia, the Balearic Islands and the Canary Islands accounted for 80% of total demand during 2014, and Andalucía was the region that recorded the greatest percentage of all requests (31%). Of these traditionally popular regions, the Balearic Islands led the increase in requests, up 41% compared with 2013, followed by Valencia (19%).

France (40%), the UK (19%) and Italy (13%) are the three European countries that accounted for the majority of the demand for holiday rentals in Spain, together accounting for more than 70%.

In terms of the percentage growth with respect to 2013, the most notable increases in the number of requests came from Portugal (77%), followed by Italy (32%) and beyond the European continent, the United States (27%). Despite being two of the main markets from which tourists to Spain originate, demand from the French and British for holiday rentals increased by just 4% and 3%, respectively. The number of holiday rental requests from the Swiss also increased by 3%, placing Northern Europe as the new focus of interest from which visitors come to our country.

Meanwhile, Germany, which continues to be one of the top five countries for requests, accounting for 19% of requests in 2014, grew by 9% compared to 2013.

Original story: El Mundo

Translation: Carmel Drake

Housing Sector To Improve Region To Region RECOVERY / Large Cities Are Initiating The Climb Out Of The Crisis

26/12/2014 – Expansión

Housing recovery will be asymmetrical, as it is in the real estate market — experts and industry players are convinced. Areas where fewer new homes remain unsold and price adjustments have been significant will take less time to return to normal levels than in the more built-up provinces.

What happens in big cities is often a leading indicator of the coming trend. And in Madrid, housing price adjustment has been more than 40% and things are starting to move again in the real estate market. That is, investors have already become more active, considering that home value drop will not deepen much further. The same thing is happening in Barcelona and major cities in the Basque country. The surprise is that real estate consultants and economists already see the light at the end of the tunnel in Mediterranean tourist destinations such as the Costa del Sol – which always falls and recovers before the average of other Spanish regions – and parts of Levante, the eastern coast.

Specifically, there are already 20 provinces that are on the road to recovery, after seven years of continuous descent. This is much better than the 2013 scenario, in which only eight provinces were showing signs of improvement. This was noted in a report by Deloitte in which the exit speed of the real estate crisis is measured by region.

According to the study, the Spanish provinces with the best real estate score are in order as follows: Madrid, Álava, Barcelona, Guipúzcoa, Vizcaya, Navarra, Cantabria, Zaragoza, Lleida, Baleares, Segovia, Valencia, Asturias, Huesca, Burgos, Valladolid, Palencia and Soria. That is to say, these are the regions where the real estate market will see the greatest recovery, i.e. more and more cranes, construction projects and mortgage subrogation will begin to pop up.

On the opposite end, Almería, Ciudad Real, Toledo and Castellón will take the longest to recover, “due to both their worse relative position in macroeconomic terms and weaker real estate sector activity, heavily penalized by oversupply.” Yes, it is remarkable that this tail-end has shrunk from having 21 provinces in 2012 to only four this year. The remaining areas (25 provinces) are at a midpoint, meaning they will recover in ‘a second phase’”.

It is also important to note that 18 of the 20 provinces that will get out of the housing crisis early are situated in the North. The other two are the Balearic Islands and Valencia (see chart). And none of the southern provinces will recover in the first of the three exit phases of the housing crisis that Deloitte has set. “The North will climb out of the crisis faster than the South, since it is not so contingent upon tourism. Furthermore, in the North, urban residential development has not been as significant as in the South,” said the Director of Deloitte Real Estate, Javier Garcia-Mateo.

The regions with the highest housing stock are Valencia (164,000 homes), Andalusia (102,500) and Castilla-La Mancha (83,700). Together, these three regions account for more than half the housing surplus at the end of 2014, according to the Real Estate Institute Business Practice Pulsometer, which estimates the stock of unsold new homes at the end of 2014 at 652,000, 14.8% less than in 2013. On the opposite side, Extremadura (3,238), Navarra (3,854) and Baleares (7,965) have the lowest number of homes remaining unsold. Catalonia has a surplus of 12,977 homes, less than half that of Madrid (27,198).

Original article: Expansión

Translation: Aura REE

New Houses Spring Up in Northern, South-Eastern Madrid

16/12/2014 – El Mundo

Construction in the capital seems to have regained the pulse lost during years of being halted and focused basically on new neighbourhood of Valdebebas. Thousands of dwellings have started to be raised in the last months in various areas of Madrid, proving the turning point for Spanish housing after the dark times of 2013 has come.

From January to November, 3.043 new building permits were granted to Madrid’s builders and architects, local City Hall’s data shows. These are not only numbers, though. They embody a wide spectrum of renewed and rich residential supply coming forward to meet unsatisfied apetitte for new real estate. What is more, the housing has little or nothing to do with the boom, none in terms of prices (pretty competitive), nor typology (quality and tailor-made), and not even the location (nice areas).

The boiling, long-awaited supply also comes from new players. Thus, traditional developers had to face up to the new realm and learn how to live in harmony with other residential market kings like the banks looking to add value to their repossessed land, and investment funds, which spotted a golden strike in this segment. Moreover, the cooperatives have increased their activity, betting on short- and mid-term development.

Awaiting the large-scale projects to start, such as the 50 Raimundo Fernandez Villaverde and the Cuatro Caminos Metro depots’ plot, cranes work round the clock on the building sites in other locations, like the Arroyo de Fresno and Valdebebas neighborhoods in the north of Madrid and in the Ensanche de Vallecas in the south-east. The three town-planning ventures represent the epicenter of the capital’s new construction, let alone the Sanchinarro, Las Tablas and Montecarmelo developments, also in the north.

Speaking of geographical distribution of the new permits, 701 of the total 3.043 granted (rehabilitations included) were for Villa de Vallecas, 698 for Fuencarral-El Pardo and 573 for Hortaleza areas, simply the most desirable districts.

However, not only does the property development flourish in new and large housing estates, but also in other places where more than a hundred of homes were built. Namely, there were 203 applications for permits in Tetuan, 201 in Moncloa-Aravaca, 157 in San Blas-Canillejas and 155 in Carabanchel neighborhoods.

On the other side, not even a single building permit was granted for Retiro, Chamberi, Puente de Vallecas, Moratalaz and Villaverde. Little available land or few buildings needing rehabilitations cripple new housing production in the first two, while the lingering stock, scares developers off the remaining three. In case of Puente de Vallecas, its closeness to Villa de Vallecas deprives it of the new home opportunities. Of the to-be-built supply, 2.474 are apartments and 569 single-family units (300 in Villa de Vallecas).

As experts point out, the cranes can be found in Puerta de Hierro (Fuencarral-El Pardo), El Barrial (Moncloa-Aravaca) and Las Rosas and Las Mercedes (San Blas-Canillejas). The two places mentioned at the beginning are unique and  supply in there is usually destined for solvent, demarcation-oriented public.

While giving his opinion on new housing types, Carlos Smerdou, CEO of Foro Consultores, said the catalog shares one common feature: tailor-made, and therefore reaching high pre-sales before a project starts. ‘The goal is to respond to a demand which has been waiting for determined products in specific areas for years’, the director explained.

Dario Fernandez, the Residential, Town Planning and Land department Head of JLL, sees eye to eye with Mr Smerdou. ‘Many factors concurred to the increase in new construction, such as dormant demand in matured areas witnessing supply shortages’, he said.  The expert praised the developments in the north, too. ‘Perhaps, these neighborhoods show a good response to more traditional/rational developing behavior, where considerable demand and little supply coincide’.

The exact parameters brought ACR and Allegra to constructing their October-launched Residencial Nature project nearby the Plaza de Castilla square (Tetuan district). ‘The quality, competitive price and meticulous design mark the standard for this and our future developments, to be located in active demand and restrained supply areas’, assured David Botin leading the Development Department at ACR.

Projects Settled on Cheap Land

Looking at results of the firms, it seems their strategy works flawlessly. ACR and Allegra sold 100% of the Residencial Nature in only few months. The closed complex has all types of common areas and 94 apartments at prices ranging from 115.000 and 275.000 euros. And the attractive prices could be set thanks to huge discounts on the land, reaching up to 80% in some parts of Madrid, as well as to limited building activity.

Via Celere‘s chairman, Juan Antonio Gomez-Pintado supports the modus operandi: ‘All the residential product started in 2014 was developed on basis of an exhaustive market study and on the plots where such a diverse product did not exist’. The developer ran property developements in Embajadores, Arcentales and Valdebebas this year, focusing on the best energy efficiency class (A) and special common areas.

In this context, Smerdou adds that the new housing industry walks towards normalization due to adjustment in prices, fundamentally. ‘Average discount in the developed areas of Madrid posts between 30% and 40% from the market’s peaks. Vallecas is an exception with 50%-off values, where banks trade REO land’, he claims.

According to the latest update by Sociedad de Tasacion, in June, a new square meter cost 2.669 euros on average, down 32.9% from June 2007 (3.978 euros). By the capital’s districts, prices fell the deepest in Chamartin (down 46.9%) and in Villaverde (42.1%).

When it comes to features of the new construction homes, Smerdou points out their sizes. ‘The new dwelling units are bigger than those built during the real estate bubble. We return to three-bedroom houses and one-bed and bedsit apartments are going out of fashion’, he remarked. ‘Properties for living are replacing investment units’.

General director at Grupo Ibosa, Juan Jose Perucho adds other indirect keys to their trading success: better expertise in the real estate invoking demand. ‘The fear did not disappear but the buyers seek information about the track and history of managers and developers’, he assured. Grupo Ibosa has set four cooperative property developments in Valdebebas running with almost 200 unsubsidized or partly-public homes inside estates called Auriga, Sagittae, Orion and Atenea.

‘Many believe the pricing cannot be lower so they started to buy homes for living instead of speculative investment’, Mr Perucho said.

 

Original story: El Mundo (by Jorge Salido Cobo)

Translation: AURA REE