Tag: mortgages

Sankaty Finalises Purchase Of 40 Large Loans From Bankia

6 May 2015 – Expansión

During 2015, Bankia has become an important focus point for international funds. Along with the sale of properties amounting to €4,800 million, the nationalised entity has launched three other large sales processes to divest non-strategic assets: one contains hotel debt – Project Castle; another involves problem mortgages – Project Wind; and the third includes large loans to real estate companies – Project Commander. The last of these is likely to close first, since the US fund Sankaty, a subsidiary of Bain Capital, is now in exclusive negotiations to seal the purchase and may sign an agreement in the next few days.

If the agreement comes to fruition, the investor will acquire 170 loans granted to 39 companies linked to the property sector. Of those, 31 are property developers that have filed for bankruptcy or liquidation. The portfolio include several loans granted to companies such as the Catalan firm Promociones Habitat.

Most of the loans are syndicated and bilateral, secured by rural land and industrial warehouses. The nominal value of the portfolio amounts to €500 million. Sankaty already acquired one portfolio from Bankia last year, together with the hotel investment giant Starwood. They paid the bank €400 million for hotel and real estate loans.

Original story: Expansión

Translation: Carmel Drake

Fitch Confirms The Credit Recovery In Spain

23 April 2015 – Expansión

Over the last month, Fitch Ratings has revised upwards its growth prospects for Spain in 2015 and 2016, to 2% and 2.3%, respectively. In this context of recovery, the agency notes that “new credit growth has been more robust during the first quarter of 2015” and it expects this trend to continue for the rest of the year. Although, the pace will depend on “the strength of the economic recovery and consumer confidence”. “The banks’ healthier balance sheets and initiatives being taken by the ECB to improve liquidity, including the TLTRO (long-term auctions) should support this increased lending”.

Fitch makes these reflections upon publication of its Fitch Spanish Fundamentals index, which analyses changes in the fundamentals of credit, taking into account the key indicators of the Spanish economy: the evolution of mortgages, SMEs and securitisations, the expected EBITDA (gross operating profit) and capital expenditure (capex) of companies, ratings outlook, CDS forecasts, new credit, unemployment prospects and trends in transport. The index ranges from 1 to 10 and Spain is awarded a six, which shows that “its recovery is holding up”.

Unemployment

In terms of unemployment, another one of the key variables that Fitch uses in its new index, the agency forecasts that the rate will amount to 22.5% and 21% in 2015 and 2016, respectively. “This positive trend in employment will support domestic demand. The increase in real disposable income, together with the fall in oil prices, should also drive economic growth”. Nevertheless, in the agency’s opinion, unemployment continues to be too high and, as a counterpoint, it warns that the non-financial corporate sector is continuing to deleverage.

The agency confirmed Spain’s BBB+ rating in October last year with a stable outlook.

Original story: Expansión (by D. Badía)

Translation: Carmel Drake

Housing: Price Decreases Slow As Sales Increase

17 April 2015 – Cinco Días

The most prestigious research studies in the country continue to improve their forecasts for expected growth in Spain this year and next; and one of the (key) factors influencing this increase in optimism is, without doubt, the performance of the housing sector. This week was the turn of BBVA Research, whose report not only predicted that the rise in GDP this year could exceed 2.7%, it also forecast “an improvement in the basis for housing investment, which continues to reinforce a change in the cycle, both in terms of supply and demand”.

Moreover, the study concludes that residential investment has increased once again during the first quarter of this year, although these increases have been “moderate and starting from historically low levels”.

The General Council of Notaries and Tinsa also published their own statistics this week. The notaries recorded a total of 26,562 house sales during the month of February, representing a slight decrease of 1.9% compared with the same month last year, although that increases to 2.6% for the seasonality-adjusted figures. Despite reductions in January and February, the notaries argue that the trend over the last few months continues to reflect the stabilisation of sales.

“This decrease may be explained by the end of the base effect following the normalisation of the figures after tax breaks for housing were phased out”, says the report. Also, if we analyse the volume of transactions by type of property, we can see that sales of newly built homes dropped significantly, by 34.4%, whereas sales of used homes (which account for more than 70% of all transactions) increased at a rate of 3.4% p.a.

More mortgages

In terms of prices, INE’s recently published statistics showed that behaviour varies substantially between new and used housing. The average price of house sales in February amounted to €1,192 per square metre, representing a decrease of 3.1% compared with the same month last year. However, whilst the price of second-hand homes barely changed during that period, falling by just 0.1%, the price of new builds experienced an average decrease of 5.8%, compared with twelve months earlier.

Moreover, the notaries calculate that house prices in Spain have decreased by 36.8%, on average, since the start of the crisis, back in 2007.

This figure does not agree exactly with the calculations performed by one of the largest property surveyors in the market, Tinsa, but it is very similar.

According to data published this week by Tinsa (see graph above), which is based on valuations obtained from its network of more than 1,200 surveyors across the country, average house prices experienced a year-on-year decrease of 2.8% in March, compared with a 3.6% drop in the previous month. According to Tinsa’s data, house prices have experienced a cumulative decrease of 41.4% from the peak figures recorded in December 2007.

Overall, the statistics show that the cumulative depreciation in house prices (since 2007) amounts to around 40%, although in areas such as the Mediterranean Coast, the aggregate adjustment amounts to 48.7%.

This fact, which means that in some regions houses today are worth half their pre-crisis values, is what continues to explain that many of the transactions recorded each month are completed without mortgages.

Specifically, in February, only 42.3% of house purchases were financed using a mortgage, which means that more than half were either paid for in cash or were financed using another type of loan that did not require a mortgage guarantee.

The notaries’ statistics also provide information about the average mortgage amount for the purchase of a home, which stood at 75.6% in February. And since more houses are being sold, it is logical to say that the granting of loans for the construction of new developments is also recovering, albeit slowly; the number of loans granted increased by 45.8% in February to take the total number of financed transactions to 335.

Original story: Cinco Días (by Raquel Díaz Guijarro)

Translation: Carmel Drake

Banks May End Up Paying Out Interest To Their Mortgage Customers

15 April 2015 – Expansión

In Europe, negative interest rates have created a problem that no bank would ever have imagined until now: they cannot rule out the possibility that they may end up having to pay out interest to customers that have mortgages linked to Euribor.

In countries such as Spain, Portugal and Italy, Euribor is the interbank interest rate that is used for (most) loans. Since the ECB introduced measures such as quantitative easing (QE) to boost the Eurozone’s economy, the index has fallen sharply and has even slipped into negative territory.

Given that the banks set interest rates on many of their loans at a small percentage above or below reference rates, such as Euribor, the fall in these interest rates means that some banks are now finding themselves in the difficult situation in which they are having to pay out interest to borrowers.

At least one bank, Bankinter, has started to pay its clients interest on their mortgages for those loans that are indexed to the Swiss franc, after the reference rate fell into negative territory.

According to a spokesman for Bankinter, in recent months, a negative interest rate has applied to the handful of mortgages linked to one-month Swiss franc Libor that the bank still has in its portfolio, since that Libor rate has dropped to a rate of -0.85%.

So far, European banks have been hoping that they will avoid the cost of having to pay out interest to their customers.

They have consulted with their (respective) central banks to find out how they should act in the event that the interest rates on their mortgages fall into negative territory. And so far, the response they have received has not been very reassuring.

The Portuguese central bank ruled recently that entities will have to pay interest to their customers if Euribor falls below zero, although the banks may “take appropriate action” regarding the terms (and conditions) they include in future loans. In Portugal, more than 90% of mortgages are linked to Euribor.

In Spain, a spokesman for the Bank of Spain said that this matter is currently being evaluated. The vast majority of Spanish mortgages are linked to 12-month Euribor, which currently amounts to 0.187%.

An executive from another Spanish bank said that in recent months his entity had started to include floor clauses in the loans linked to Euribor that it grants to companies.

In Italy, the banks are waiting for a response from the central bank, although in advance, they say that their mortgages do not contain any clauses to explain what happens if interest rates slide into negative territory.

Original story: Expansión (by P. Kowsmann and J. Neumann)

Translation: Carmel Drake

ST: House Prices Increased By 3% During Q1 2015

9 April 2015 – Expansión

Nine consecutive months of price rises for the first time since 2007 / According to the appraisal company Sociedad de Tasación, the average price per constructed square metre recovered significantly between January and March.

House prices rose by 3% during the first quarter of 2015, compared with the same period last year, according to data published by Sociedad de Tasación (ST). That made it the third consecutive quarter of house price increases, for the first time since the beginning of 2007, i.e. exactly eight years ago.

And so, the gradual improvement in data from the sector continues, which closed the year 2014 with positive results, leaving behind seven years of deep recession. The number of house sales increased by 2.2% and prices rose by 1.8% (in 2014), according to the National Institute for Statistics (INE).

This year, the price rises have increased to 3%, according to the statement made yesterday by Juan Fernández-Aceytuno, the CEO of the appraisal company, during his speech at the 22nd Meeting of the Financial Sector, organised by ABC and Deloitte. And he added that ST has seen a “double-digit” rise in the number of appraisals requested to support mortgages.

Nevertheless, Fernández-Aceytuno sais that “the data must be analysed with caution”, given “the low (levels) of mortgage lending and the fragility of the labour market”. This long-awaited turnaround may be starting to happen, but caution still prevails in the sector: “We have seen (positive signs) in recent quarters, but we will have to see whether the price curve ends up flattening out; currently, I can not see any signs that point clearly to an increase in demand, rather, (I see) a turning point.

For the housing market to fully recover, there needs to be an increase in demand and in the number of mortgage granted, adds the CEO of ST. In 2014, only 240,000 home loans were granted, well below the “cruising speed” required for a recovery, which experts agree is around 450,000 mortgages (per year). “When we return to the volumes last seen in 2001 and 2002, then we will be able to say that the recovery has begun”, adds Ferndández-Aceytuno.

BBVA’s research service is more optimistic. Its Spanish Real Estate Flash report for April says that (it expects) the sale of homes, construction and the signing of new mortgages to continue to rise, driven by the favourable economic climate.

It is clear that the net downwards trend is coming to an end. Albeit, gradually. In fact, the average appraisal value of homes per square metre has varied over the last seven quarters. “The last three quarters have been very positive, but the quarters prior to that involved fluctuations. As such, this positive data may be temporary”, explains Fernández-Aceytuno.

As well as the volatility and fragility of the sector, the real estate analysts’ reservations stem from real estate statistics from the General Council of Notaries, which shows that the euphoria in the residential market is cooling. The notaries reported a 10% decrease in sales in January. Nevertheless, on the upside, mortgage lending increased by 11.4% (during the same period).

Caution aside, what is certain is that the property market has changed direction. “This is the first time in seven years that we are seeing this data”, says Fernández-Aceytuno. The seven quarters at the start of the turning point in the real estate sector “have coincided with seven quarters of GDP growth”, he adds.

“There is consensus that, with the environment of low (interest) rates in the short term, it is very likely that the financial institutions that own cheap land will start financing the market once again, through property developers, whereby reviving the property market”, explains the CEO of the appraisal company.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

Bankia And BMN Both Put NPL Portfolios Up For Sale

27 March 2015 – Expansión

Divestments / Bankia and BMN are seeking to replicate the transaction completed by Catalunya Banc in 2014 on a smaller scale. The market expects a “boom” in these sales in 2015.

After two years divesting shareholdings and bad debts, Bankia considers that the time has come for it to transfer some of the non-performing mortgages that it deems to be unrecoverable. The entity led by José Ignacio Goirigolzarri has put a portfolio amounting to €1,300 million up for sale, of which more than €900 million relate to unpaid mortgages. BMN has also put a similar package of loans up for sale, amounting to €160 million, of which €52 million relate to mortgages.

Investors have received these operations with a great deal of anticipation, because since Catalunya Banc transferred a portfolio of problem mortgages amounting to €6,500 million to Blackstone last summer, no other entity had decided to follow suit.

After the step taken by Bankia and BMN, a number of entities are expected to join the band wagon and put some of their real estate loans to individuals up for sale.

Change of course

Until now, the bank had been reluctant to sell mortgages to opportunistic funds for reputational risk reasons. To avoid this, Bankia and BMN have decided to exclude loans relating to subsidised and social housing (from their portfolios). Moreover, sources in the financial sector explain that overseas funds may offer more alternatives for non-performing loans than the banks, since they purchase the loans at a discount and so can offer discounts themselves. These investors, just like the banks, must comply with the Code of Good Practice developed by the (Ministry of) Economy in 2012.

The sale launched by Bankia forms part of Project Wind, advised by KPMG . In total, the portfolio contains overdue loans amounting to €1,300 million, which are split into three sub-portfolios: mortgages; loans to SMEs and real estate developers, secured by properties, worth €180 million; and unsecured loans amounting to €210 million.

The mortgage portfolio comprises 4,300 loans, with an average value of €214,000. Most of the mortgages were granted to purchase property in Cataluña (32%), Madrid (25%) and Valencia (18%). Furthermore, 83% of the 4,300 non-performing loans are involved in judicial proceedings.

These types of transactions allow banks to remove non-performing assets from their balance sheets, release provisions and devote new resources to new more profitable activities.

Foreign funds will monitor this transaction very closely, especially those who have purchased a real estate platform in recent years: Cerberus (Haya Real Estate), Apollo (Altamira), Centerbridge (Aktua), TPG (Servihabitat), Blackstone (Catalunya Caixa Inmobiliaria) and Värde Partners y Kennedy Wilson (Aliseda). Having purchased the real estate management platforms in 2013, these investors are now keen to nurture (feed) them with their own assets, and whereby obtain profitability from their investments.

In addition to this transaction, Bankia has two other deals in the pipeline: the sale of hotel loans – Project Castle – for which it has received non-binding offers of between €200 million and €300 million; and the transfer of syndicated and bilateral loans amounting to €500 million – Project Commander – which Deloitte is advising.

On a smaller scale

In the meantime, BMN has put a similar portfolio up for sale to that offered by Bankia as part of Project Wind. It amounts to €160 million, of which one third are unpaid mortgages. The sale of this portfolio, known as Project Pampa, is being managed by N+1. Almost all of the 300 mortgages included in this portfolio are secured by properties in Cataluña.

BMN hopes to close the sale of its portfolio by the end of May. In the case of Bankia, the transfer process may last until the middle of the year.

Original story: Expansión (by Jorge Zuloaga)

Translation: Carmel Drake

Notaries: House Sales Decreased By 10.9% In January 2015

17 March 2015 – El Mundo

House sales decreased by 10.9% in January 2015 with respect to January 2014 and prices fell by 6%.

On the up side, the volume of new mortgages increased by 11.4%.

The real estate statistics published by the General Council of Notaries relating to the month of January 2015, have somewhat dampened the euphoria that the housing market has been enjoying in recent weeks. The notaries report a 10% decrease in sales and a 6% year-on-year reduction in prices. Nevertheless, on the up side, the notaries indicate that during the first month of the year, mortgage lending increased by 11.4%.

According to these house purchase figures, there were 21,320 transactions in January, which represented a year-on-year decrease of 10.9%. “Despite this decrease in the monthly figures, the data actually reflects a stabilisation in terms of sales. This decrease may be explained by the end of the ‘base affect’ due to the normalisation of the figures following the conclusion of the period for tax deductions on purchases”, explain the notaries.

By type of property, the sale of flats experienced a year-on-year decrease of 11.5%, similar to the decline observed for unsubsidised flats (-11.4%). This decrease in the volume of transactions was due, primarily, to the significant decline in the sale of new flats (-31.8%). Meanwhile, the sale of second-hand flats shrank by 7.6% year-on-year. Regarding the sale of detached homes (viviendas unifamiliares), the number of transactions decreased by 8.4%.

Price decreases

In terms of average prices, the cost per square metre of homes purchased in January was €1,234, which represented a year-on-year decrease of 6%. This reduction in the price per square metre of homes was driven by both a reduction in the price per square metre of flats (-5.6% year-on-year), as well as a decrease in the price per square metre of detached homes (viviendas unifamiliares) (-6.4%).

In the flat segment, the price per square metre of second-hand properties amounted to €1,347 (-3.2% year-on-year) and of new homes amounted to €1,624 (-12.5% year-on-year). In terms of detached homes (viviendas unifamiliares), the average cost per square metre amounted to €1,001, i.e. 5.4% lower than in January 2014.

Mortgage lending is on the increase

Meanwhile, the number of mortgage loans granted to purchase homes increased by 11.4% year-on-year, and the average amount of capital loaned amounted to €126,989 (up by +9.2% year-on-year). In this sense, the percentage of home purchases financed using a mortgage amounted to 41.5%. Moreover, for this type of purchase, with financing, the mortgage amount represented an average of 76.2% of the appraisal value of the house financed.

Original story: El Mundo

Translation: Carmel Drake

INE: Mortgages Increased By 1.6% In 2014

27 February 2015 – Expansión

The number of mortgages granted for homes increased by 1.6% in 2014 with respect to the previous year, to 202,954, which meant that the mortgage market returned to positive growth after seven consecutive years of decreases; and so a change in the sector’s cycle begins.

The signing of new mortgages for the purchase of homes rose by 1.6% in 2014 to reach 202,954, the first increase after seven years of decline, according to extracts from the Mortgage Statistics published by INE today.

The number of new mortgages had not increased on a year-on-year basis since 2007, a year in which more than a million more mortgage contracts than last year were signed – 1,238,890, to be exact – therefore, despite the recovery that appears to taking place in the sector, the market is still well below its pre-crisis figures.

The signing of mortgages has fallen steadily since 2007: in 2013, the number decreased by 27.1%, whilst in 2012, 2011 and 2008, they fell by more than 32%. In 2009, they dropped by 22.2% and in 2010 and 2007, the declines were more moderate, with decreases of 6.6% and 7.7%, respectively.

Last year the size of the average mortgage taken out over homes also grew, by 2.1% to €102,130, whilst the total amount of capital loaned rose by 3.8% during the course of the year to reach €20,727 million.

In December 2014 alone, the number of new mortgages recorded in the property register grew by 28.9%, compared with the same month in 2013, whereby completing seven consecutive months of increases. During the last month of the year, 15,962 contracts were signed in total, for an average value of €124,059, also higher than a year earlier.

Overall, in 2014, the total number of mortgaged properties increased by 11.7%, to amount to 314,018. Of those, 22,342 were urban (+12.5%) and 1,054 were rural (-3.2%).

For Fernando Encinar, Head of Research at Idealista, “this increase in the number of mortgages granted represents good news for the sector. Banks have started to hang the “mortgage” sign in their branches once again and demand is beginning to respond, encouraged by the economic recovery and the suppression of prices”.

Manuel Gandarias, Director of the Research Unit at pisos.com offered a similar view: “Everything seems to indicate that the mortgage market will reactivate briskly. Following the significant decreases observed since 2007, the data in 2014 represents the first annual increase in the granting of loans, and the second half of the year really stood out in terms of growth”.

“Similarly, the average size of mortgages has experienced an increase, which is indicative that the banks have recovered the financing role that the sector was has been asking for”, he continued.

“Competitiveness between entities to win the best clients has returned to the mortgage sphere and offers will continue to attract sales and purchases. Everyone will have to pay attention to the evolution of Euribor and the movements of the European Central Bank (ECB), whose measures have accelerated this opportunity. Although the future looks brighter, we should remember that this is the principle of stabilisation. Financing is a fundamental element for families and it is a clear indicator of the process of improvement.

Andalucía, Madrid and Cataluña lead the increases

As usual, the autonomous regions with the highest volumes of mortgages granted in 2014 were Andalucía (36,860), Madrid (35,461) and Cataluña (30,261).

The regions in which the most capital was lent to constitute mortgages were Madrid (€5,134.9 million), Cataluña (€3,439.1 million) and Andalucía (€3,219.0 million).

Original story: Expansión

Translation: Carmel Drake

Notaries: House Sales Increased & Prices Stabilised In 2014

17 February 2015 – El Economista

House sales grew by 19.1% to 364,601 transactions in 2014 with respect to 2013, a year of minimal activity in the sector, according to the latest statistics from the General Council of Notaries (el Consejo General del Notariado).

So, whilst this rise in the number of transactions should be assessed from that perspective, the statistics reflect the fact that prices have turned the corner on the negative trend observed during the crisis and are growing again, albeit by only 0.1%.

The notaries explain that “last year the real estate market was marked by the stabilisation of monthly figures, in terms of both quantities and prices”.

Increase in sales

In detail, the increase in sales is more evident in the case of single-family homes, a segment that grew by 26.8% to 74,160, versus the 17.3% increase in the sale of flats, although more flats were sold in absolute terms (290,441 transactions).

In the case of the latter, second-hand sales increased by 23.5% to 234,748 transactions, versus an increase of 9.6% in the sale of new flats (39,306).

Prices increase slightly

In terms of the price per square metre, the average value of homes purchased in 2014 was €1,251 (+0.1%). This increase was primarily due to the increase in the value of flats (+1.4%), since the price per square metre of single-family homes fell by 2.7%.

Similarly, sales of second hand properties are driving the sector. The price of used flats increased by 2.4%, whilst the price of new flats remained unchanged.

Finally, 94,586 transactions involving other properties were recorded last year, of which 38.4% related to land or plots.

Therefore, the notaries insist that “the gloomy path of the real estate market ended last year, with the market showing signs of stabilisation compared with the same period in 2013” and they add that “during the first few months of 2015, they expect market figures to continue on the path of stabilisation observed in 2014, although values may be more moderate”.

Improved financing

On the other hand, the mortgage market behaved in line with the stabilisation of the real estate sector in 2014. The market closed the year with a 5% year-on-year increase in the number of new loans granted and with an average amount of €137,878, representing an increase of 10.2%.

In the specific case of mortgage loans granted for the purchase of properties, the number of loans granted last year increased by 39.4%. This increase amounted to 42% in the case of house purchases and 15.6% in the case of other properties.

The average capital of the mortgages granted for the acquisition of a property amounted to €124,217, an increase of 6.4%. In the case of loans for house purchases, the average amount was €117,507, an increase of 5.2%.

More loans for developers

The notarial statistics indicate that the number of mortgage loans granted for construction also increased during the course of the year, by 20.2%. This increase was higher in the case of house construction (23.8%).

In terms of the average loan amount, the figure stood at €288,974 for all mortgages loaned for construction, which represented a year-on-year decrease of 3.5%, slightly higher than the reduction recorded in 2013 (-3%).

Finally, the percentage of homes purchased using mortgage financing stood at 37.5% last year. Moreover, for these purchases, the mortgage represented 75.2% of the value of the home, on average.

Original story: El Economista

Translation: Carmel Drake

Housing: 319,389 Homes Were Sold In 2014, Up By 2.2%

11 February 2015 – Expansión

After three years in decline, INE confirms that the residential sector is on the road to recovery. The greater increases in the number of transactions were recorded in the Balearic Islands (18.5%), Navarra (13.9%) and the Canary Islands (12%).

The National Institute of Statistics (el Instituto Nacional de Estadística or INE) confirmed yesterday that house sales have turned the corner around Cape Horn. The crisis is not behind us yet, by any means, but the sector has begun its long road to recovery, and that is the best news to come out of the property sector in over six years. Residential property transactions increased by 2.2% in 2014.

Last year, 319,389 homes were sold, compared with 312,600 in 2013 and 318,534 in 2012. This represented the first annual statistical increase since 2010, although that year was clearly affected by the termination of the tax relief for first home purchases for individuals earning more than €24,107, which caused numerous families to bring forward their house purchases so as not to miss out on the tax incentive of up to €1,350 per year.

“The year-end figure reflects a rise that, although timid, is a symptom of a significant change in the pace of operations. It is an encouraging piece of data that emphasises the stabilisation of the sector and it is based on the return of financial institutions to the field of finance and on the price adjustments undergone in the market”, said Manuel Gandarias, Head of Research at pisos.com.

In reality, 2014 was the first year since 2007 in which demand grew by itself, without tax incentives or other decisive policies. The worst years of the crisis for the property sector were 2008 and 2009, when residential sales decreased by -28.8% and -25.1%, respectively. In 2010, sales increased by 6.3%. The decline then slowed down gradually in 2011 (-18.1%), 2012 (-11.5%) and 2013 (-1.9%, when tax relief ended completely).

The expected upturn in purchases in due solely and exclusively to the strong sentiment in the second hand market, the real thermometer of the residential sector at a time when new homes are still somewhat mummified, in an over-inflated stock.

Sales of used homes increased to 199,943 in 2014, i.e. 18.4% more than a year earlier. Second hand homes now account for two out of every three transactions (62.6% of the total). These sales had increased by 3.8% in 2013.

Meanwhile, sales of new homes in 2014 amounted to 119,446 (down -6.9% with respect to 2013) and now accumulate four consecutive years of decline.

“This superiority of used homes over new builds is not only based on the larger volume and leeway afforded by the prices of such homes, it is also due to the scarcity of new developments and the effect caused when the banks dumped the new developments they held on their balance sheets, which effectively converted these properties into second hand homes for tax purposes”, said Gandarias.

The number of unsubsidised homes sold increased by 3.2% with respect to 2013, whilst the number of subsidised house sales decreased by 6.2%.

By autonomous region

The autonomous communities that experienced the greatest increases in the number of house sales in 2014 were the Balearic Islands (18.5%), Navarra (13.9%) and the Canary Islands (12%). The largest decreases were recorded in La Rioja (-25.1%), Castilla-La Mancha (-12.6%) and Murcia (-6.3%).

The regions that recorded the most transactions per 100,000 inhabitants in 2014 were Valencia (1,182), the Balearic Islands (1,043) and the Canary Islands (1,015).

83.0% of the sales recorded in 2014 related to urban properties and 17% to rural properties. In the case of urban properties, 55% corresponded to homes. Sales of rural properties increased by 7.3% and sales of urban properties rose by 0.9%. Within this second group, housing was the property type that experienced the highest growth.

The experts expect the improvement in house sales to extend into 2015. The 21st Edition of the Real Estate Heart Rate Monitor (la XXI edición del Pulsímetro Inmobiliario) published by the Institute of Business Practices (el Instituto de Práctica Empresarial or IPE) last week, forecasts that sales will grow by 7.5% this year.

According to the IPE, house prices will grow by 2.5% in 2015. In addition, mortgage lending will increase by 2.5% and the construction of new builds will grow by 7.5%.

Sales have already increased. Will prices rise too? We will know on 9 March, when INE publishes data abour the average house price at the end of 2014.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake