Tag: mortgage lending

26 Spanish Real Estate Experts Share Their Predictions for 2018

6 January 2018 – Expansión

House prices will rise by more than 5% on average this year, with increases of more than 10% in the large cities. These gains will happen in a context of great dynamism in the market, in which house sales will grow by more than 10% to exceed 550,000 transactions. Rental prices will also continue to rise.

Those are just some of the predictions made by 26 real estate experts for Expansión.

Aguirre Newman: “House prices will grow by more than 10% in Madrid and Barcelona”.

“In our opinion, house prices are going to continue to rise in 2018, reaching average growth rates of 6%-7%”, says Juan Riestra (pictured above, top row, second from left), Director of the Residential Area at Aguirre Newman. “In Madrid, Barcelona and the coastal cities, we expect to see double-digit growth, driven by the supply of new homes that the property developers have announced, which will result in an even more intense increase in prices than seen in 2017 since new build home are typically more expensive than second-hand properties”, he adds (…).

Fotocasa: “New build homes will have a higher profile in 2018”.

“New build homes will have a higher profile in 2018, as we have already seen during the last quarter of 2017. And that, combined with the return of confidence to the housing market, will continue to push prices up if the economic context is maintained and the situation in Cataluña is resolved”, says Beatriz Toribio (pictured above, bottom row, second from left), from Fotocasa, who thinks that this effect will drive up house prices by more than 5%, but not reaching double-digits (…).

Universitat Pompreu Fabra: “Everything depends on the situation in Cataluña”.

“The upward momentum in the market will be accentuated in 2018 due to the improvement in the new build market since the homes that started to be built two years ago are now being sold”, said José García Montalvo (pictured above, top row, second from right), Professor of Economics at the Universitat Pompeu Fabra. “The major change is that new homes now account for 20% of the market, whilst before they represented 60%” (…). But “everything depends on the political uncertainty in Cataluña” (…).

Arcano: “Demand for investment in housing will continue to grow”.

“There is still a very significant imbalance in terms of demand, spurred on by the ECB’s policy and labour improvement, and a supply that is still restricted by the very low level of new house starts. Moreover, demand for housing as an investment will continue to grow. In this context, prices will rise by more than 5%”, says Ignacio de la Torre, Chief Economist at Arcano (…).

Notaries’ Centre for Statistical Information: “We expect house prices to increase by more than 5%”.

“On the basis of our analysis of the available information, we expect house prices to grow by between 5% and 10% in 2018 (…). Although we expect the housing stock to increase, due to greater investment and employment in construction in recent months, which may lead to price rises being contained, we also expect an increase in demand, given the dynamism of economic activity and the behaviour observed in the labour market”, says Milagros Avedillo, at the Notaries’ Centre for Statistical Information. In her opinion, the growth in mortgage loans will be single-digit.

Asprima: “Very few new homes will be built”.

“I don’t think that the volume of transactions will increase by more than 10% and the forecast for price growth will be below 5%”, says Carolina Roca, Vice-President of Asprima. “The most important macro-factor is income”, she laments. Therefore, prices cannot rise by much, in her opinion, although they will increase in certain areas. “New builds will recover in 2018, but not by much (…)”.

Tinsa: “The reduction in the unemployment rate will boost the market”.

“The residential market will record moderate price growth in 2018 (of between 3% and 4%), similar to that seen in 2017, with different speeds, depending on the region”, says Pedro Soria (pictured above, bottom row, second from right), Commercial Director at the appraisal company Tinsa. “The recovery will expand to more areas; the large capitals will continue to be the drivers, although the rate of growth will soften”, he adds. “The reduction in the unemployment rate and continuing investor interest, due to the prolongation of the low-interest rates, will increase house sales by between 10% and 15% (…).

Sociedad de Tasación: “New house prices will rise by 5.4%”.

“Applying our predictive model to the data from the Ministry of Development, we estimate that 14.1% more house sales will be completed in 2018 than in 2017 (…)”, says Consuelo Villanueva (pictured above, top row, far left), Director of Institutions and Key Accounts at Sociedad de Tasación. “The result (…) indicates growth of 5.4% in the price of new homes under construction for the average of provincial capitals in 2018 (…)”.

Gesvalt: “Mortgage lending will rise by around 15%”.

“According to the forecasts at Gesvalt, we predict moderate growth in second-hand house prices of around 5% at the national level, although there will be notable differences between provinces”, says Sandra Daza (pictured above, bottom row, far right), Director General at Gesvalt. (…). And by how much will mortgage lending grow? “By around 15% and there will be a slight increase in the number of mortgages that exceed 80% of the total property value”.

Foundation of Real Estate Research: “The political uncertainty will weigh down on Barcelona”.

The President of the Foundation of Real Estate Research, Julio Gil, believes that house prices will rise by “between 0% and 5% in 2018. “We will move to a three-speed market”, he thinks, referring to consolidated areas, cities in recovery and provinces with a surplus supply and/or limited demand. “And I think that Barcelona will perform less well than Madrid, weighed down by the political uncertainty”, he adds (…).

Pisos.com. “Mortgage lending will rise by more than 10% for the fourth consecutive year”.

According to Ferran Font, Head of Research at Pisos.com (…) “Historically low interest rates and the decrease in unemployment mean that we expect mortgage lending to grow at double-digit rates in 2018, like it has done for the last three years”.

General Council of Real Estate Agents: “The rise in rents will lead to tension in sales prices”.

“House prices will grow by around 5% in 2018, driven more by the refuge effect of savings than by objective economic variables”, says the President of the General Council of Real Estate Agents, Diego Galiano. “Savings are not being rewards and housing is recovering a certain degree of stability and offering good prospects for investors (…)”.

TecniTasa: “Prices will grow by around 5%”.

“On average in Spain, we estimate price growth of around 5%, but we highlight that that figure represents an average of a very heterogeneous market, by area and asset class. In some regions and for certain types of high-end homes, the increase will amount to between 5% and 10%, and may even exceed 10% (for example, in the Balearic Islands). Whilst in small towns and for cheaper homes, prices are barely expected to rise at all in 2018”, says José María Basáñez, President of TecniTasa (…).

Civislend: “The mortgage war will intensify”.

“The growth that we will see in terms of mortgage lending is going to continue to reflect double-digit rates and the war in terms of granting loans by financial institutions is going to intensify”, says Manuel Gandarias, Director and Founder of the real estate crowdlending platform Civislend (…).

Acuña & Asociados: “80% of sales will be made in 400 towns”.

“Given the current situation, the expected growth in prices at the national level for 2018 will amount to around 5.5%”, forecasts Luis Rodríguez de Acuña. However, “demand for housing is not behaving in a homogenous way across the country, and transactions are only being recorded in 1,300 of Spain’s 8,125 municipalities”. In other words, in one out of every six. And 80% of transactions “are being closed in just 400 municipalities (…)”. (…).

CBRE: “The sale of new homes will continue to gain weight”.

The value of homes will increase “by around 5% YoY at the national level, with higher rises (between 7% and 10%) in certain markets such as Madrid, Valencia, Málaga and the Balearic Islands”, predicts Samuel Población (pictured above, top row, far right), National Director of Residential and Land at CBRE (…). “Sales of new build homes are going to increase their relative weight (with respect to second-hand homes) as a result of the recovery in construction output; nevertheless, the recovery will not have an immediate impact on transaction volumes given the time lag associated with new build developments”, he says.

BDO: The land market is preventing soaring construction output”.

“We are facing a very favourable macro context (GDP and employment, above all) and therefore, an upwards cycle is likely, which will have different regional rates”, explains Alberto Prieto, at BDO. (…). “The launch of new build projects by the new large players will start to be felt in 2018, and then more intensely in 2019”, he adds. “The situation in the land market makes it unfeasible for the volume of new build homes to soar for the time being”, he says.

Foro Consultores Inmobiliarios: “Fixed-rate mortgages will play an important role”.

Carlos Smerdou, CEO at Foro Consultores, believes that “new build homes will drive the market and that recent land transactions indicate that the trend in terms of prices will be upward, of between 5% and 10%” (…). In terms of fixed-rate mortgages, “they will play an important role”, despite the fact that “interest rates are forecast to remain negative”.

MAR Real Estate: “Banks are still reluctant to grant the necessary financing”.

Rosario Martín Jerónimo, representative of MAR Real Estate in Marbella, believes that house prices will grow by more than 5% in Spain this year, on average (…). Nevertheless, she does not think that sales or mortgage lending will be as high in 2018 as they were in 2017 and that the growth rates will remain below 10% in both cases. “Buyers are willing but the financial institutions are still very reluctant to grant the necessary financing”, she explains. “Many property developers are completely financing their projects using money from private investors/buyers, without any support from the bank”, she says (…).

uDA (urban Data Analytics); “Prices will rise by more than 10% in the large cities”.

“House prices will rise by around 6.9% in 2018, although the behaviour will be tremendously heterogeneous”, warns Carlos Olmos, Director of urban Data Analytics. In other words, there will be “some large cities with growth rates of more than 10% and many other capitals with small decreases” (…).

Gonzalo Bernardos, Professor of Economic: “House prices will rise by 11% and sales volumes by 23%”.

“I think that house prices will rise by 11%”, says Gonzalo Bernardos, Director of the Real Estate Masters at the Universidad de Barcelona (…). Moreover, in macroeconomic terms, it is the best scenario for the residential market: high (economic) growth (around 3%), the creation of employment, scarce new build supply (new build permits will amount to 125,000 in 2018), very low interest rates and bank willingness to grant mortgages”. “House sales will rise by around 23% and mortgage lending will increase by 17%”.

Irea: “House prices will rise by more than 7% in consolidated markets”.

Mikel Echavarren (pictured above, bottom row, far left), CEO of the real estate consultancy and advisory firm Irea, forecasts that house prices will rise by between 5% and 10% in 2018 with respect to 2017. “In consolidated markets, the increases will be closer to 7%”. (…). In the mortgage market (…), “in theory, financing conditions will continue to be very beneficial for buyers and property developers”, he adds.

College of Registrars: “Mortgage lending will grow by around 20%”.

The registrars believe that house prices will rise by less than 5%. “Taking into account our data and the slowdown that is already being seen in Cataluña, which accounts for approximately 17%-18% of the Spanish housing market (…), we think that it will be hard to exceed a growth rate of 5% in 2018”, explains Fernando Acedo Rico, Director of Institutional Relations at the College of Registrars. (…). Something similar will happen with mortgage lending, which “will continue to grow at around 20%”.

Idealista.com: “Madrid will drive the price rises”.

According to Fernando Encinar, Head of Research at the real estate portal Idealista, house prices will rise by less than 5%. (…). “There will be cities that will experience a more acute recovery, such as Málaga, Valencia, Sevilla and the islands. But I think that Madrid is going to be the real driver, with even more accelerated price growth”. Why? “The Spanish capital is gobbling up talent and investment, and demand there indicates that prices are going to continue to rise. There is minimal stock left in Madrid (…)”.

Instituto de Práctica Empresarial: “In 2018, 550,000 homes will be sold in Spain”.

According to the Director of the Real Estate Chair of the Instituto de Práctica Empresarial, house prices will rise by 6.1% in 2018 (…). In Spain, 550,374 homes will be sold, which represents 14.5% more than in 2017, despite the sluggishness that may be seen in Cataluña.

Invermax: “Tourist areas may see price rises of 10%”.

Jesús Martí, Real Estate Analyst at Invermax, thinks that “house prices will grow by another 5%, with this average varying between the large cities and the traditionally touristy coastal areas, where they may rise by 10%”. “It is still a good time to buy a home, especially for investors”, he adds (…).

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

IPE: House Prices Will Rise By 7.5% In 2016

28 November 2016 – Expansión

According to the Institute of Business Practice (IPE), house prices are booming, driven by a significant increase in sales (+17%). Mortgage lending (+8.7%) and building construction (+25%) are also underpinning the recovery of the sector, which will reach cruising speed in 2017.

Prices, sales, construction permits, mortgage lending, building construction, returns from rental properties…all of the major indicators in the residential market are growing at a strong pace in 2016, the year of consolidation for the real estate recovery. The housing sector has switched gears and is progressing, steadily, towards sustainable figures.

The end of year forecasts from the Real Estate Academic Arm of the Institute of Business Practice (IPE) confirm this trend. Firstly, the forecasts show that the average sales price of homes will rise by 7.5% this year (…). By the end of the year, the average home will cost €144,973, a level not seen since the end of 2012. It is worth remembering that, according to Spain’s National Institute of Statistics (INE), average house prices rose by 4.2% in 2015, the largest increase since 2007 (5.7%). If IPE’s predictions are correct, the price rise this year will be the largest increase since the recovery of the property market.

In addition, according to the XXII Real Estate Pulsometer from the IPE, house sales are soaring, by 17.2%, to reach 414,812 transactions, the best figure since 2010,and 9% higher than in 2013, which is when the sector bottomed out.

Permits and house starts are also rising, but they are starting from a very low base. Permits have increased by 25%, from 35,945 to 44,880. This forecast represents the most abundant activity in terms of cranes since 2012, but it is light years away from the years of the boom, when more than 700,000 house starts were recorded per year. The number of urban mortgages granted – over plots of land, homes, garages, premises, etc. – is expected to grow by 8.7% and the amount loaned is forecast to increase by 14.9%, according to the study, prepared using data from MAR Real Estate’s network of real estate agents and the Network of Qualified Real Estate Advisors, which has been cross-checked with official data from INE, the Ministry of Development, the College of Registrars and the Notaries.

Two speeds

At the same time, the surplus of unsold new residential properties is expected to decrease significantly. At the end of 2015, this stock amounted to 433,583 homes. In 2016, a quarter of that volume has been drained, with 326,295 units left. That figure is less than half the stock recorded in 2014 (675,945), according to the IPE’s study.

Almost all of the unsold homes are located in areas with limited demand or are properties that fail to fit with the current needs. By contrast, in the most established and sought-after areas, such as the centre of Madrid and Barcelona and along the main areas of the Costa del Sol, homes, and even land, are scarce. In other words, the recovery is still happening at two speeds, but the difference is less acute, in the sense that, it is now widespread across almost all of Spain.

What’s more, the residential rental market is recovering strongly (by 4.4% gross per annum, or 8.3% with capital gains) (…).

With these statistics, the residential market is heading towards its cruising speed. The outlook for 2017 is encouraging, although all indicators point towards a slow down in terms of the increase in house prices. (…).

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

INE: Mortgage Lending Reaches 5 Year High

28 November 2016 – Expansión

The month of September 2016 was the best for the residential mortgage market in the last five years. In total, lenders granted €3,018.5 million to borrwers to acquire homes, the best figure since 2011, which represents an annual increase of 12.5%, according to Spain’s National Institute of Statistics (INE).

In total, 26,667 mortgages were constituted over homes, up by 10% compared to September 2015. The average mortgage loan amounted to €113,193, up by 2.2% YoY. The value of mortgages constituted over urban properties in general amounted to €4,848.6 million, up by 3.7% compared with September 2015.

Interestingly, the percentage of fixed rate mortgages continued to gain in popularity during September; they accounted for 30% of all mortgage loans, almost one third of the market, compared with 28.3% in August (…).

These loans “are very attractive for potential house buyers given their current conditions and because they protect borrowers against possible increases in interest rates, such as the rise being considered by the ECB”, said Beatriz Toribio, Head of Research at Fotocasa.

The mortgage lending market has been on the road to recovery for more than two years now and that upwards trend was broken only in July 2016, when lending decreased by almost 15% YoY following a suspension in the inscription of some contracts for legal reasons.

Normalisation of the market

The Director of Research at pisos.com, Manuel Gandarias, expects that, as we head towards year end, “mortgage lending will continue to grow as political stability takes hold and above all, the confidence and expectations of the most solvent buyers rises”. “We have have seen two months of adjusted increases in comparison with what the statistics had previously been showing”, he said. For Toribio, the data shows that “mortgage financing is consolidating as a result of low interest rates and the liquidity that exists in the market” and that “the real estate sector is moving towards normalisation”.

In addition, in her opinion, “in 2016, in addition to a significant increase in the number of loans, we have also seen growth in the average amount loaned as a result of the behaviour of prices, which are recovering in the large cities, such as in Madrid and Barcelona, as well as along certain parts of the Mediterranean Coast.

By autonomous region

By autonomous region, the areas that recorded the highest number of mortgages constituted over homes were: the Community of Madrid (5,086), Andalucía (4,788) and Cataluña (4,631).

Nevertheless, the regions that recorded the highest YoY variations in terms of the number of mortgages granted were: La Rioja, with an increase of 59.6%; the Canary Islands, with an increase of 45.2%; and Cantabria, with an increase of 38.5%.

Finally, the regions that lent the most capital for the constitution of mortgages over homes were Madrid (€772 million), Cataluña (€616 million) and Andalucía (€470.1 million).

Original story: Expansión (by J. M. L.)

Translation: Carmel Drake

INE: Mortgage Lending Rose By Just 7.1% In October

22 December 2015 – Cinco Días

The signing of new mortgages to purchase homes increased by just 7.1% YoY in October, down from 20.2% a month earlier, with 19,195 new mortgage loans constituted in total.

According to data published yesterday by Spain’s National Institute of Statistics (INE), the signing of mortgages decreased by 19.4% compared with the month of September, which affected the YoY statistics.

The total amount of mortgages granted to purchase homes in October amounted to €2,144.2 million, up by 18.7% compared with the same month in 2014 and down by 18% compared with the previous month.

Moreover, in October, 28,989 mortgages were signed for all kinds of properties, including both rural and urban buildings, up by almost 5% compared with a year earlier, but down by 19.5% compared with the previous month.

The amount of capital loaned by Spanish institutions to constitute these loans amounted to €4,040 million, 12.5% more than in October 2014 and 15.6% less than in September.

More than half of all of the mortgages constituted in October, specifically, 53.1%, involved homes, according to INE’s data, which also revealed that 90.3% of the loans had variable interest rates, versus 9.7% which had fixed interest rates.

Euribor was the preferred reference rate for the constitution of variable rate mortgages, specifically it was used in 92% of all new variable rate contracts. The average interest rate, at the beginning of the mortgage terms, for home loans was 3.30%, which was 8.2% lower than during the same period in 2014.

In total, changes to the conditions of 12,457 mortgages were recorded in the property registers, down by 18% compared with last year. For homes, the number of mortgages whose conditions were modified decreased by 19.4%. (…).

By autonomous region, the areas that recorded the highest number of new mortgage constitutions over homes in October were: Andalucía (3,551); Cataluña (3,138) and the Community of Madrid (3,033).

The autonomous regions that recorded the highest YoY rates of change were the Balearic Islands (61.8%), País Vasco (43.7%) and the Canary Islands (32.8%).

The autonomous regions that loaned the most capital for the constitution of mortgages over homes were the Community of Madrid (€513.0 million); Cataluña (€388.5 million) and Andalucía (€335.0 million).

The autonomous regions with the highest month on month positive rates of change in the number of home loan mortgages were La Rioja (19.1%); Murcia (12.1%) and the Canary Islands (9.7%).

Meanwhile, the autonomous regions that recorded the highest MoM decreases were the Community of Madrid (38.7%); Navarra (36.2%) and Aragón (30.4%).

Original story: Cinco Días

Translation: Carmel Drake

House Prices Will Rise Again In 2016

10 December 2015 – El Economista

Second-hand house prices are going to close 2015 with a YoY decrease of between 1% and 2%, according to pisos.com, which forecasts that they will grow again in 2016.

And next year will be a strong year not only for second-hand homes, but also for new builds, despite the tax advantages of the former compared with the latter.

“The evolution of prices highlights the improved pace of activity in the real estate sector, which has now left behind the large drops and promises to make a definitive comeback in 2016”, says the Director of Research at the real estate portfolio to which the CEO, Miguel Angel Alemany, adds that 2016 will be a “fantastic” year for developments to overturn the market.

“There is a significant amount of demand eyeing up the upcoming residential developments, something that supports sales off-plan, a phenomena that practically disappeared during the crisis”, adds Alemany, who predicts that “next year, the gap between these two types of operations will become narrower, thanks to the deliveries that will be formalised.

All of this is due to the fact that, in the background, there is a greater understanding between some very competitive financial institutions and a well-informed demand.

This understanding is expressed in the purchase and sale of homes that, according to the real estate portfolio, will continue along the same lines as in recent months, to finish the year with around 41,000 more operations than in 2014, which represents an increase of 11%, according to the registers held by the National Institute for Statistics (INE).

In the same way, mortgage lending will end the year with growth of 22%, i.e. around 46,000 more loans, according to the forecasts set out by pisos.com.

Change of buyer, change of market

Thus, the buyers and the financial institutions have changed and they are showing different attitudes as we emerge from the crisis. The former are leaving behind opportunistic purchases, based on pure investment criteria, with the value in use of homes gaining weight.

“Buyers are no longer looking for bargains that allow them to live off the rental income, but rather they are looking for homes according to their own needs”, says Alemany, who immediately adds that owners “have come to their senses” and now “wise clients are those who wait to build up their savings and avoid the requirement for guarantors”. Meanwhile, the banks now appreciate customers who come to their branches with their accounts already prepared.

Cautiously looking ahead to the future

Thus, at the real estate portal, they consider that “sustainable growth in the residential sector doesn’t seem so difficult to achieve any more”. Nevertheless, they urge buyers to be “cautious” given that long-term volatility in variable interest rates may lead to nasty surprises in the future for those individuals who are now taking our mortgages now whilst Euribor is at historical lows.

Moreover, pisos.com points out that “any political decisions that are taken after the general election affecting the housing market must be coherent, considered and responsible”.

Original story: El Economista

Translation: Carmel Drake

The Prices Of Apartments Rise By 5%, Caused By Mortgage Holdback

1 September 2015 – Expansión

REAL ESTATE RECOVERY / The bank turns the tap on and grants 26.3% more of housing loans. Sales rise by 11%, thanks to the boom in the secondary market, surging 43.5%.

Mortgage lending, home sales and price per square meter guarantee consolidation of the residential market recovery. And by recovery we mean stabilization, which is the phase that really promises getting out of the hole. After seven years of deep recession, the vital signs of the real estate are very evident, but the important thing is that the upward trend stabilizes: there is more credit (26.3% increase in June) and, therefore, more formalized sales (11.1% rise in the second quarter) and the prices go up (by 5.1% between April and June).

The first link in this chain is the mortgage. Signing of mortgage loans for house purchases reached the abovementioned interannual 26.3% in the sixth month of the year, up to 21,454, as noted yesterday by the National Statistics Institute. The average amount was 103,626 euros, 4.2% more.

The month rate rose by 8.7%. And this is the first positive data recorded in the sixth month of the year since the beginning of the crisis. The communities with the highest monthly growth rates in the number of home mortgages are the Canary Islands (38.3%), Balearic Islands (31.7%) and the Basque Country (26.8%). With the highest annual rate: Aragon (59%) and Cantabria (52.5%).

The cumulative increase of mortgage lending exceeded 21% in the first six months of the year, and that of the borrowed capital 25%. This “shows that the banks have turned on the mortgage tap and are not as strict now with the profiles they analyze”, notes Fernando Encinar, Head of studies of Idealista.

Also (and most importantly), “the average amount is maintained at very reasonable levels”, above 100,000 euros, as points out Manuel Gandarias, Director of the Office of Studies of pisos.com. And that “can revoke the revival in growth of housing prices,” adds Encinar.

Therefore it is expected “that the sector continues to grow with the sustainable encouragement from the bank,” predicts Gandarias. “The advancement in granting of mortgages is positive and confirms that 2015 will be a year of recovery for property sector in most of the state ‘, concludes Encinar.

Meanwhile, the repeat sales house price index of the Registrars Association rose by 5.1% YoY in the second quarter, and by 2.8% QoQ, “thus consolidating and enhancing the change in trend begun in 2014”, according to the registrars.

In April, May and June 87,187 house sales were registered in property records, which is the second highest quarterly result of the last nine quarters, and an increase of 11.1% compared to the same quarter of 2014. 335,163 operations were registered  in the  last twelve months, 2.7% more than the cumulative result of the first quarter of this year.

The 68,705 quarterly sales and purchases of used homes (interannual increase of 43.5%) represent the highest result of the last twenty-eight quarters. “You have to go back to the first half of 2008 to find a number of quarterly transactions in used homes so high. Surely this is a clear sign of the housing market recovery, “emphasises the report.

According to the real estate consultant Jose Luis Ruiz Bartolome, what is happening is that “the investors are following the footsteps of the market leaders, which are opportunistic funds and REITs. Besides, the economic and labour market recovery can be seen a little.”

So, “if nothing strange happens, we can say that the sector begins to stabilize,” he adds.

Original story: Expansión

Translation: Lee La

Notaries: House Sales Up By 1.9% In April To 30,758

16 June 2015 – El Economista

House sales increased by 1.9% in April, with 30,758 transactions, whilst the average price of properties sold decreased by 3.9% to €1,188/m2, according to data from the General Council of Notaries, published on Monday.

These percentage changes reflect a moderation with respect to the increase recorded in sales in March (+12.3%), as well as the drop in prices observed during that month (-7.5%). According to the same source, house prices have accumulated a total decrease of 37% with respect to the peaks reached in 2007.

By type of property, the sale of flats increased by 1.3% in April in YoY terms. In the free (unsubsidised) market, the increase was 1.1%. The rise in the number of flats sold was driven by an increase in the sale of second-hand homes (+5.9%), which more than offset the decrease recorded in the sale of new flats (-27.3%). Meanwhile, the sale of family homes increased by 4.2% in April.

In terms of prices, on average, flat prices decreased by 3.2%, with the price of second-hand flats falling by 3.3% and new flat prices increasing by 2.7%. Meanwhile, the price of houses (chalés) decreased by 2.9%.

During the fourth month of the year, the sale of other types of properties decreased by 9.1% to amount to 6,987 operations, of which 37.7% related to land and plots. The average price per square metre of these transactions was €123, i.e. 18.4% lower than in April 2014.

According to the same source, the evolution of the mortgage market for the acquisition of homes reflects the stabilisation observed in the real estate sector, “with an increase in total credit”.

Thus, in April, 12,716 mortgage loans were granted for the purchase of homes, i.e. 12.3% more, for an average amount of €122,199, i.e. 13.1% more. The percentage of home purchases financed using a mortgage loan was 41.3%.

Original story: El Economista

Translation: Carmel Drake

The AHE Urges Banks To Sell Their Remaining RE Assets

12 June 2015 – Expansión

The Spanish Mortgage Association (‘Asociación Hipotecaria Española’ or AHE), whose members are all banks, believes that the sector must sell off its real estate portfolio so that it can, progressively, focus its resources on its core banking activity once more. According to the economic report issued by the General Assembly of the AHE, the real estate market is now showing its first signs of revival and recovery, after its “significant adjustment” since 2007.

Meanwhile, the trade association also analyses whether the recovery in mortgage lending is happening in the right way, after some bankers raised concerns. In this regard, the AHE notes that the recovery in terms of mortgages is positive, and so too is the competition between entities, as that is leading to lower prices, which is in turn facilitating access to credit for families. Nevertheless, the association draws attention to the fact that “we cannot highlight enough the importance of properly assessing the risks in order to avoid malfunctions such as those experienced in recent years”.

The risks are particularly high during periods of extraordinary economic stimuli and/or when interest rate curves flatten out.

Original story: Expansión (by M.R.)

Translation: Carmel Drake

BBVA: The RE Recovery Depends On 3 Cornerstones

5 June 2015 – Idealista

According to BBVA Research, the real estate sector showed clear signs of stabilisation during the first quarter of 2015. The entity has based its findings on: the opening of mortgage credit; the slight variation in house prices; and the recovery in construction activity.

The data supports this recovery. The volume of house sales increased by 2.3% YoY in Q1 2015, maintaining the trend seen in recent months. The General Council of Notaries confirmed the trend with the sale of 34,756 homes in March alone.

This growth in demand, coupled with interest rates at historic lows, has allowed more growth in the mortgage market, with a YoY increase of 22% in mortgage lending during the first quarter of the year and an increase of 20.4% in the volume of loans granted for new house purchases during the first three months of the year.

Meanwhile, house prices dropped slightly (by 0.1%) during Q1 2015 to reach €1,459/m2 on average, according to data from the Ministry of Development; they continue evolve heterogeneously by region. Whilst the Canary Islands and Aragon experienced the highest increases during the quarter (higher than 1%), Cantabria, Murcia and Asturias suffered the most significant decreases.

The third element of this improving environment is: construction activity. Despite the decline in the granting of permits for new constructions during the first quarter of the year with respect to the previous two quarters, YoY growth amounted to 23%. Moreover, the number of individuals registered for social security in the sector increased slightly, by 0.4%, in April compared with March, whilst unemployment continued to decrease in the sector.

Original story: Idealista (by David Marrero)

Translation: Carmel Drake

Demand For Off-Plan Homes Rises From The Ashes

8 May 2015 – El Confidencial

We can see cranes and bulldozers on the horizon in Spain once more. And although players in the real estate sector would rather talk about prudence than euphoria, stabilisation than recovery, the outlook is very encouraging.

Mortgage lending is increasing, more new homes are being built and more homes (in general) are also being sold. And, although the second-hand market is still winning hands down – even though the statistics are distorted by the foreclosures of homes by banks – demand for new builds is returning once more. Thus, purchasing a home off-plan, a practice that became almost anecdotal during the crisis, is returning to the fore once again, seven years after the real estate bubble burst.

There are several advantages to purchasing off-plan. You buy a new home that, for the most part, does not need any work doing to it. Some developers even allow future owners to adapt homes to their needs and likes – to convert a 4-bedroom home into a 3-bedroom property with a larger living room, for example – but, undoubtedly, the main advantage is that purchasers are not obliged to make a major outlay (of cash) in one go, but rather, they make small contributions until the keys are handed over, and those amounts are then deducted from the final price of the home. The main drawback is that new builds are not yet finished, which means they are not available immediately. And construction work can last for between 18 and 24 months.

Recently, several dozen people queued up overnight to reserve one of 62 homes that Solvia will soon build in Barcelona. It will be the real estate platform’s first development in the regional capital. (….) “There was a great deal of interest because it was a well-located product, with great features and reasonable, attractive prices”, said Augusto Monte, Director of Sales and Transactions at Solvia. “Clearly, it was an exceptional case and you cannot make wider generalisations about what happened with this development”. Nevertheless, Monte acknowledges that the fear of buying off-plan has declined in recent months.

(…) Other recent examples include the actions of housing cooperatives – for example, the plot of land in Raimundo Fernández-Villaverde or the old engine sheds at Cuatro Caminos – which obtained 100% of the partners in record time to sign up to purchase homes that will not be built for another two years.

Property developers, banks and servicers are conscious of this change and have come to the largest real estate fair in Spain (SIMA) with this type of product. Thus, for example, Solvia has a 75-home development of Alcalá de Henares. Between July and September last year, 64% of the development had already been purchased. And it is not the only one.

“We still notice considerable uncertainty amongst prospective buyers. Many of them come to the stand to ask us when the construction work will to begin. They are quite afraid that the building work will get delayed or that it will not happen at all”, says Inmaculada López-Gasco, sales manager at Magnum & Partners, which started to sell 63 homes in San Sebastián de los Reyes in April. “We have already sold 16 – i.e. 25% – and we will have the licence to start the construction work in June. We hope that sales will accelerate once the bulldozers start work.

(…)

Original story: El Confidencial (by Elena Sanz)

Translation: Carmel Drake