Tag: mortgage foreclosures

Registrars: House Sales Soared By 23.7% In Q2

30 August 2016 – Expansión

Between April and June, 107,838 homes were sold, specifically 88,291 second-hand homes and 19,547 new homes. The figure represents the highest number of transactions recorded in a single quarter in the last three years.

(…). According to data published yesterday by the College of Registrars, house prices rose by 7.48% in Q2 compared with the same period last year. Compared with the figures recorded during the first quarter, the rise between April and June amounted to 2.19%. Despite these significant increases, prices have still not returned to their pre-crisis levels. And although the cost of housing is now similar to the level last seen in 2004, the cumulative decrease still amounts to 26% with respect to 2007, when prices reached their highest level before the burst of the real estate bubble.

The data from the College of Registrars also shows that the figures for the second quarter “comfortably” exceeded the 100,000 transaction threshold, after more than three years below that figure. Specifically, 107,838 transactions were signed during the second quarter (representing an increase of 23.7%), of which 88,291 corresponded to second-hand homes and 19,547 to new homes. Nevertheless, sales of new homes recorded their second consecutive positive inter-quarter variation (0.84%), after a long period of steady decline. It is the highest level seen in the last five quarters, proof that this type of housing is now showing its first signs of recovery.

Second-hand homes

In addition, sales of second-hand homes continued their strong upwards trend, already seen in recent quarters. The 88,291 sales recorded represented a QoQ increase of 10.31%, resulting in the highest number of second-hand sales in almost nine years, according to the College of Registrars. We have to go back to Q3 2007 to find such a high level of quarterly second-hand home sales.

Most autonomous regions recorded a QoQ increase in the number of house sales (specificially fifteen), with double-digit increases in six of those. The highest number of transactions were recorded in Andalucía (20,846 homes), Cataluña (17,300), the Comunidad Valenciana (15,734) and Madrid (15,540). In relative terms, the highest increases were recorded in the autonomous regions of the Balearic Islands (31.4%), País Vasco (24.07%) and Murcia (22.2%).

Furthermore, demand for housing from foreigners maintained its traditional strength during the second quarter, to account for 13.38% of all house purchases, up from the figure of 12.93% recorded during the first quarter. The historical maximum was recorded in Q4 2015 (14.38%). British citizens continue to buy the most residential properties in Spain; they accounted for 19.73% of all purchases made by foreigners. They were followed by German (7.3%), French (7.05%), Swedish (6.9%) and Italian buyers (5.9%). (…).

Meanwhile, 11,470 mortgage foreclosure proceedings were initiated during Q2 and there were 2,432 “daciones en pago”, down by 30.8% compared with a year earlier.

Mortgage debt grew by 1.6% during the second quarter, to reach an average of €110,981.

Original story: Expansión (by Calixto Rivero)

Translation: Carmel Drake

Carmena To Construct 4,000 Social Homes By End Of Term

19 April 2016 – 20 Minutos

After the Europa Press Breakfast on Monday, the mayoress of Madrid, Manuela Carmena, announced that the Town Hall has set itself the objective of ending its term with 4,000 social homes, as part of its efforts to alleviate “the humanitarian disaster resulting from mortgages foreclosures”. She argues that in a society with the level of wealth and development such as ours, it should be possible to achieve the objective of “ensuring a home for everyone that needs one”.

Carmena revealed the preliminary details of her social housing construction plan, which will be formally announced “in September or earlier” because she considers that it is “quite embarrassing” to talk to the mayors of Paris and New York and tell them how “little social housing the Town Hall of Madrid has to offer”. Especially given that the Municipal Home and Land Company (EMVS) has 6,000 applicants at the moment.

One of the options proposed by Carmena involves “increasing the buildability” of renovation projects. To that she adds the possibility of the banks allowing some of their foreclosed homes to be rented out, as well as the option of building on land that the Town Hall has available. The Town Hall is also exploring ways of providing more security to owners who grant their properties for social use.

The option of offering a “zero rent” arrangement is also being considered for cases of “absolute emergency” and Carmena announced the new configuration of the Mortgage Mediation Office, which will provide support and advice to affected citizens from 1 September. (…).

Original story: 20 Minutos

Translation: Carmel Drake

Colau Warns Of RE Bubble Danger In Barcelona

3 March 2016 – Público

The mayoress of Barcelona, Ada Colau, has warned about the imminent “danger of a real estate bubble” in the city, driven by an increase in the price of rental housing since 2014-2015.

The town hall has submitted a report about the increase in rental prices in Barcleona, whose results show an increase of more than 6% in rental housing across the city as a whole, especially where tourism is most concentrated. The neighbourhoods most affected by the rises are Les Corts (8.7%), Sant Martí (8.6%), Sarrià-Sant Gervasi (6.9%) and Eixample (6.7%). “Rental prices in Barcelona have risen by more than in any other city in Spain”, she said.

In light of this increase, the mayoress has asked both the Generalitat de Catalunya and the Spanish State to act to limit future rental price rises, especially in areas where tourism demand is the highest, and to modify housing regulations to “avoid a new speculative cycle”. “We want to raise the alarm because the housing laws have not been modified and that is facilitating new speculation about the housing market, which means that rental prices are increasing in areas where income levels have not improved”, she said at a press conference.

Colau made reference to Germany as an example of good practice in the protection of the right to housing, given that there, the “State allows limits to be placed on rental prices”, depending on the income levels in the areas where prices are on the rise. “We urge the relevant authorities, at both the Catalan and Spanish level, to follow the European example regarding limitations on rental prices in places where there is significant residential demand”, she said.

The mayoress also acknowledged that progress has been made in the battle against evictions and the increase in rental housing in Catalunya, thanks to the approval of law 24 2015, by popular initiative. But, according to Colau, this regulation still needs to be applied to “put an end to mortgage foreclosures and to put a stop to the speculation”. Even so, she considers that “collaboration with the State is necessary” and she took the opportunity to denounce the limited profile the housing crisis is having in the investiture debate.

The mayoress and the councillor for housing, Josep Maria Montaner, announced that the Town Hall has increased the number of homes in the city’s public housing stock by 255, thanks to acquisitions from financial institutions. It is the second batch of homes that the banks have transferred or sold to the town hall, below market value, to increase the city’s pool of rental housing and to resolve the social emergency. Specifically, 50 flats have been transferred in 8 years, 131 homes have been purchased below the market price and the right of first refusal has been granted on another 28 homes.

With these, the municipal government has now obtained 455 homes from the banks for inclusion in the public housing stock, during the course of its mandate (in addition to the 200 granted by Sareb and the 50 from CaixaBank). (…).

Original story: Público (by Laura Safont)

Translation: Carmel Drake

La Caixa: House Prices Increased By 2.65% YoY In Q1 2015

6 July 2015 – Cinco Días

The recovery in the housing market is strengthening with rising sales prices, an increase in the volume of mortgages and a decrease in the number of mortgage foreclosures. In parallel, major transactions are being signed in the market for offices once again.

The official statistics show that house prices increased by 2.65% YoY during the first quarter of 2015 and by 1.88% with respect to the end of 2014 – property prices fell by 31% on average during the crisis -. Furthermore, growth is being seen across all regions, with the País Vasco and the Balearic Islands leading the charge.

Between January and March 2015, 16.2% more house sales were registered than during the period from October to December 2014, and 9% more were recorded than during the same period in 2014. The sale of used homes rose by 23.8% during the first quarter.

Transactions involving foreigners – who are driving the sector – increased by 8.9% with respect to the same quarter in 2014. Certificates for mortgage foreclosures decreased by 4.3% with respect to the first quarter in 2013 and have now fallen by 14% since their peak in 2010. A report from La Caixa says that supply, demand and prices are all adjusting accordingly. The inclusion of Spaniards (as buyers) will happen in due course, supported by the “improved labour market and easing of access to credit” thanks to the ECB’s program and the clean up of the banking sector. There is still a high level of stock to sell and lease, and the market for the construction of new developments is only just beginning to recover. The study warns that we should continue to monitor the market for signs of a possible bubble.

Furthermore, activity is returning to the segments for offices, warehouses and commercial premises. During the first quarter, there was a five-fold increase in transaction volumes with respect to the same period in 2014, say Savills, and four purchases alone amounted to €1,340 million in total.

According to PricewaterhouseCoopers, Madrid is one of the European cities with the best investment prospects; that is reflected in the “surge in capital inflows, which began in 2013 and is not showing any signs of receding”. And the money is coming from all sources, including global funds and tycoons such as Warren Buffet. Spain is a good place to invest.

Original story: Cinco Días (by Carlos Gómez Abajo)

Translation: Carmel Drake

Moody’s Warns That Banks Are Delaying Their Property Sales

9 June 2015 – Expansión

Moody’s warns that Spanish banks are delaying the sale of foreclosed properties to avoid losses, as they wait for market conditions and house prices to improve.

In a report about residential mortgage-backed securities (RMBS), Moody’s observes that, despite the recent decrease in mortgage foreclosures, data from the Bank of Spain shows that the volume of foreclosed real estate assets in the banks’ portfolios amounted to €83,400 million in 2014. As such, it warns that a delay in the sale of these properties may expose securitisation funds to greater losses.

In turn, it adds that the figures regarding the number of foreclosures that go to court actually under-estimate the real number of homes the banks have foreclosed in the last two years. And it points out that, in its opinion, a single property may be involved in more than one mortgage foreclosure process. Furthermore, it notes that, in general, Spanish mortgage lenders have become more willing to accept “daciones en pago” (assignment of deeds in lieu of payment).

Improvements

The number of mortgage foreclosures has decreased by almost 14% from the peak they reached during the crisis, recorded in 2010. Moody’s also highlights the decrease in the default rate in Spain, which is being driven by the decrease in interest rates and the improvement in the economic environment.

Original story: Expansión

Translation: Carmel Drake

Election Fallout: Uncertainty May Deter Investors & Delay Large Deals

28 May 2015 – Cinco Días

Experts predict that there will be an impact on the rental market and on the sale of debt portfolios. They warn that Madrid and Barcelona will be affected by anti-eviction initiatives.

The rise of political parties advocating the suspension of mortgage foreclosures, the relocation of evicted families (to vacant properties owned by banks and Sareb), and the end of sales of public properties to private owners, at the elections last Sunday, has put the international investment funds, which have been arriving in Spain in recent years with a renewed hunger for property, on alert.

Experts in the market say that although we are still waiting to see the specific impact of these initiatives by the governments, which depend on pacts that are just as uncertain, the situation will cause funds to reduce their already low purchase offers and to postpone large transactions until they know the results of the general elections, scheduled for the end of the year.

“Madrid and Barcelona are the showcase for the country”, explains Mikel Echavarren, CEO of the real estate consultancy firm Irea, predicting that the expected appointment of Ada Colau (Barcelona en Comú) and Manuela Carmena (Ahora Madrid) as the mayoresses of the two large capital cities, “will cause investors’ interest to disappear for four years” in all areas “that depend on decisions by local councils”.

In his opinion, there are three areas of particular concern. On the one hand, the suspension of evictions – or their delay, because, as Echavarren points out, municipalities do not have the legal power to eliminate them altogether – because that would result in a penalty for the budding rental market and above all “longer timeframes, more uncertainty and lower prices” in the offers made by funds for packs of credit with real estate collateral.

Secondly, proposals such as the one made by Colau to suspend the opening of new hotels in Barcelona, “which is one of the most important hotel markets in the world”. And thirdly, the review of the general urban plans in Madrid and Barcelona.

“Either you have a local council that is “pro-business” or investors pack their bags and take their money elsewhere”, warns the director of an investment fund who asked to remain anonymous, stating that “Anglo-Saxon capital does not understand it when urban development is not encouraged”.

“Any change represents uncertainty and money flees from uncertainty”, says Julio Gil, Chairman of the Real Estate Research Foundation (Fundación de Estudios Inmobiliarios or FEI), bearing in mind that as a minimum “funds will consider their investments in Spain to be more risky and therefore will demand high returns”.

Nevertheless, Gil states that for the time being this support for social rather than economic policies is only being seen at the local government level and, to a lesser extent, at the regional government level, but he thinks that the fear of what might happen in the general elections this year may well “delay several (large) transactions” as investors wait to see the outcome.

“The greatest risk is that we drop off of the radar of investors”, warned sources yesterday at ETC Real Estate, a new platform for the management of debt and mortgaged assets, promoted by TDX Indigo, Equifax and Cobralia.

Its partners expect that funds will lower their asset purchase offers, but argue that the change in the political paradigm will make it necessary to promote alternative means of eviction, such as discounts and “daciones en pago” (delivery of the deeds in lieu of payment), amongst others. A management model they promote, they assure, to the funds and banks to whom they render services.

Original story: Cinco Días (by Juande Portillo)

Translation: Carmel Drake