Housing Market Volume Rises To €32.516 Billion By September, Up 25%

29-12/2014 – Expansión

The Spanish non-subsidized housing market has risen to €32.5 billion between January and September 2014, a 25% increase over the same period last year (€25.99 billion).

The volume of non-subsidized housing has thus stayed on a positive trend until September after three consecutive years of decline, according to data of the Ministry of Public Works, collected by Servimedia.

The €32.5 billion correspond to 240,763 non-subsidized housing transactions that were made throughout the first nine months of the year – 22.6% more than a year earlier.
In particular, second-hand non-subsidized properties moved up to €27.249 billion (a 30.1% increase), whereas the volume corresponding to new housing units was much lower – €5.267 billion (up 4.1%).

Madrid was the region with the largest volume recorded in non-subsidized housing transactions over the first nine months of the year, with €6.234 billion, followed by Andalucía – €5.866 billion, Catalonia – €5.855 billion, and Valencia with €3.934 billion.

Down the list are the Basque Country – €1.588 billion, the Balearic Islands – €1.451 billion, the Canary Islands €1.418 billion, Castilla y León – €1.104 billion, Galicia – €1.018 billion), Castilla-La Mancha – €832.8 million, Murcia – €756.6 million, and Aragon – €708.4.

Meanwhile, the regions with the lowest non-subsidized housing transactions volume were Asturias €438.2 million, Navarra – €375.5, Cantabria – €353.5, Extremadura – €307, La Rioja – €180.8, and Ceuta and Melilla – €91.2, both together.

Original article: Expansión

Translation: Aura REE

Spain Exchanges Subsidized Housing For Rent Subsidy Program

5/12/2014 – Expansion

Goodbye, subsidized homes! Welcome, rental subsidies for unsubsidized apartments! This is the new policy of the current Government which assumes promotion of rental assistance for low-income families.

The measure has been included in the 2013-2016 State Plan on home leasing, building rehabilitaion and town regeneration and renovation. The scheme seeks replacing so-called VPOs (subsidized housing units) because currently their prices post much higher than many free and available properties across Spain.

Thus, the Government foresees granting up to 200 euros per month, until 2016, to 200.000 families that find it diffcult to make the ends meet. The Ministry of Public Works will pay betwen 33 per cent and 40 per cent of monthly rentals to households whose incomes are lower than 22.365 euros annually and who rent homes for less than 600 euros per month. Total annual payment must be inferior than 2.400 euros.

The new assistance will be provided for 12 months, extendable until the end of the Plan’s effectiveness. However, as the approval arrived a bit late, the applicants will have a chance to enjoy the support until 2017.

Not in vain, the Ministry has already foreseen 48.000 beneficiaries of the assistance in 2014. Will it be done just in four weeks? The eligible people in need cannot earn more than three-times the Iprem (Spanish Public Indicator of Multiple Effect Income) but the quota may vary in accordance to the number of family members. Moreover, priority will be given to the evicted.

On the other hand, from the real estate market news, recent report by Tinsa states that the industry predicts decrease in yields on prime assets, as well as a cut in incentives for office rentals. Also, it says interest will boost about vacant or for management assets.

 

Original story: Expansión (by Juanma Lamet)

Translation: AURA REE

New Rental Assistance Program In Effect Today: Who May Apply?

4/12/2014 – Expansion

Today opens the acceptance period for applications for the rental, building rehabilitation and town regeneration and renovation assistance program, included in the Government’s Housing Scheme for years 2013-2016.

Previous reform dating back at July 4th 2013, prolonged all rights to the help of that time ‘until new program comes into force’. Once amended, the document elaborated by the Ministry of Public Works and various regional authorities includes a 40% support for rents which do not exceed 600 euros monthly and 2.400 euros annually.

Moreover, beneficiaries of the new basic income support (Renta Basica de Emancipacion in Spanish) can apply when their previously indicated validity period is over.

Furthermore, tenants whose personal income is lower than three times the Public Indicator of Multiple Effect Income (known as Iprem in Spain) would show, are eligible for the program in line with their households’ composition. The assistance is given for a year and it could be extended until the end of the Plan, i.e. 2016.

 

Original story: Expansión 

Translation: AURA REE

Property Prices Decline by 2.9% in Q3

27/11/2014 – El Mundo 

Unsubsidized dwellings continue to cheapen, not as abruptly as they used to, though, when the slump repeatedly reached 10%. Accordig to data provided by the Ministry of Public Works, Spanish home price fell by 2.6% in the third quarter of 2014 from Q3 2013. To compare, in the second quarter the depreciation showed 2.9%. Currently, a residential square meter costs 1.455,8 euros on average.

From the second quarter, the price has stagnated (down 0.2%).

Considering the age of the properties, new house price (less than 2-year old) and the value of existing units practically coincides as first lost 2.9% and the other 2.6%.

 

Original article: El Mundo

Translation: AURA REE

In Reality, Spanish Property Value Dropped 58.61% Between 2007 & 2014

9/10/2014 – Inmodiario

Since the 2006-2007 peaks, Spanish real estate depreciated by 58.61% in nominal terms. The percentage is much higher than the figure published by the Ministry of Public Works, 31.51%, which was estimated on basis of property appraisal values. This correction was included in a report on the first half of 2014 drafted by Tecnocasa and the Pompeu Fabra University in Barcelona.

According to other sources, the drop-off showed 43.89% (Tinsa) and all agree that presently, housing prices in Spain stand at the 2004 (and earlier) levels with the adjustment process at the verge of concluding. In fact, over the last 12 months, the slump slowed down, demand for long-term investment increased and many transactions have been sealed in cash.

Previous experience with housing price corrections indicates that values use to overreact 10% down before a turn in tendency occurs. In accordance with the opinion of analysts from the OECD and The Economist who maintain that Spain is among the countries where property is overvalued (between 5% and 8%), still the prices will go down by 15%.

Moreover, the positive news about constantly increasing real estate sales in the first quarter of 2014 (50% more) have been triggered by extremely low performance a year before when the tax relief for property purchase was abolished.

In fact, the number of deals sealed in the first quarter (81.358 sold properties) is greater than Q1 2013, 2012 and 2011 only. Today’s real estate sales represent a mere 34% of the total of purchases in 2006, while mortgage approvals only 20% of that figures.

Next indicator speaking against the recovery is the number of foreclosures. In the last year, there were 81.971 cases of seizure, by 8% more than a year earlier. Specifically, main residence foreclosures rose by 19.1% if compared to the fourth quarter of 2013 and declined by 4.2% year-on-year. Mostly rented homes are being foreclosed.

Speaking of rentals, investors see a certain appeal in attractive yields on buildings in main cities where the circumstances are expected to improve and the prices rise.

Original article: Inmodiario

Translation: AURA REE

Ministry of Public Works to Give Rent Subsidies to 200.000 Low-Income Households

22/09/2014 – Expansion

The Spanish Government foresees granting €200 each month to 200.000 families that find it difficult to to pay their rents for what remains of 2014 and the entireties of 2015 and 2016. Included in the 2013-2016 Housing Scheme, the subsidy will amount to 33% to 40% of their monthly payments, on condition that the annual income of a household does not exceed €22.365 and the dwelling is being rented for below €600 monthly.

The measure has been introduced as an alternative for subsidizied housing (VPO by its acronym in Spanish) as in fact, according to the Ministry of Public Works, this type of rentals are not as cheap as thought and renting an unsubsidized dwelling in many provinces of Spain appears to be much less expensive.

The form of assistance will be given out for 12 months with a possibility of prolonging it until the end of the State Scheme. In total, each low-income family may receive up to €4.800 during the three years.

Families which do not earn more than the Spanish minimum wage index (IPREM) fixed at €22.365 may apply for the rent subsidy. The amount may vary in line with the number of family members. Moreover, evicted families will be given priority.

Ten out of seventeen Spanish regions have already signed the covenant: Catalonia, Extremadura, Castille-La Mancha, Cantabria, Asturias, Castille and Leon, Aragon, Galicia, Andalusia and the Canaries, while the rest will do so at the end of September or at the beginning of October.

The Ministry will invest €2.311 million and the regions €216 million in implementation of the whole Scheme. The rent subsidies solely will represent an expense of €480 million annually with expected private contribution of €1.27 billion more.

Together with the plan, that includes rehabilitations and subsidizing of 230.000 mortgage loans, the Monistry of Public Works contemplates creation of 36.000 jobs within the three years.

Such an indirectly protected tenancy is a very desired measure among the housing experts and the left-wing party. The previous Government has established it for the young (i.e. below 30) only, who received €210 monthly.

The new, €200 assistance will be universal. Last year, the Government estimated that throughout 2014, 48.000 grants will be given to poorer households.

When  it comes to renovations, 50.000 dwellings will receive them over the three years. From the socio-economic point of view, focusing on rehabilitation of the complete neighborhoods is considered the most efficient.

 

Original article: Expansión (by Juanma Lamet)

Translation: AURA REE