2 August 2018 – Eje Prime
Sevilla, the third largest Spanish city by population, is seeing the first signs of recovery in its residential market (…).
The capital of Andalucía, which is home to almost 690,000 inhabitants, has seen its population decrease on a gradual basis since 2012 when it exceeded 702,000 inhabitants. The slow but progressive decline of the population is probably one of the reasons why house prices have not risen there and why new builds account for an all but residual percentage of the market.
Nevertheless, some of the data does indicate that Sevilla is jumping on the bandwagon in terms of the improvements in the real estate market that are being seen across Spain: a sharp increase in prices in 2017, an on-going rise in sales and, finally, investment in the city by groups of the calibre of Habitat and Ayco.
The city of NO8DO, Sevilla’s traditional motto, saw its population peak at 710,000 inhabitants in 2003, before falling below the 700,000 threshold in 2007. That figure rose above 700,000 again in 2009 before reaching a decade high of 704,000 in 2010, but it has fallen continuously since then to the current figures.
Real estate dynamism
Despite that, the dynamism in terms of house purchases has been considerable in recent years. In 2013, operations in the sector were still registering strong decreases, with a fall that year of 24.4% to just 4,715 house sales. However, the rises have been unwavering since then: up by 12.1% in 2014; 11.3% in 2015; 15.1% in 2016 and 14.1% in 2017, with a total of 7,732 sales.
According to data from the Ministry of Development, during the first quarter of this year, 2,234 house sales were recorded in the city, of which more than 95% corresponded to second-hand homes. With just 98 sales, new homes accounted for just 4.4% of the residential activity during the first quarter.
Nevertheless, and despite this growing activity in terms of sales, residential prices in Sevilla remain stagnant. In recent years, average appraisal prices per square metre in the fourth quarter of each year have decreased steadily, with the exception of 2014 only, when they rose by a measly 0.3% (…).
Currently, house prices amount to €1,468.70/m2 on average (€1,754,40/m2 for new builds and €1,464/m2 for homes aged five years or more). That value is 26.3% lower than the prices in Sevilla in 2012 and 35.9% lower than the peaks of 2007, before the outbreak of the crisis, when the average house price amounted to €2,316.10/m2.
Governed by the socialist Juan Espadas since June 2015, the weight of social housing in the city is greater than that of many other Spanish cities, at least based on data for the first quarter of 2018. In this sense, 177 of the purchases recorded in the city between January and March involved social housing properties, which accounted for 7.9% of the total.
Habitat is one of the companies that has invested in the Sevillan market this year. In July, the property developer announced a €30 million investment in a new development in the Andalucían capital comprising 199 homes. The acquired land is located in Mairena del Aljarafe, one of the fastest growing areas in the local residential market (…).
Another active player in the city is Ayco, which has acquired a batch of buildable plots this year in the municipality of Camas (Sevilla). In total, that company has purchased land spanning 18,000 m2, where it plans to build around 200 homes.
Another emerging business for the city is the office market, which closed 2017 with 919,173 m2 of space leased, up by 4% YoY, and approaching the records of 2013, according to a report by the Sevilla-based consultancy Inerzia (…).
In the commercial sphere, the Torre Sevilla project is the most important in the city at the moment. Six years after inheriting this macro-project, CaixaBank has let 100% of the office space and the shopping centre is on the verge of opening its doors.
Aenor, Deloitte, Everis, Orange and the Chamber of Commerce are some of the entities present in the 18-storey office block, which account for just half of the skyscraper. The rest of the tower is occupied by a hotel managed by Eurostars, belonging to the Hotusa Group.
Original story: Eje Prime (by C. De Angelis)
Translation: Carmel Drake