Tag: nationality

Registrars: Mortgage Lending Increased by 10.9% in 2017

23 April 2018 – Eje Prime

The number of mortgages signed to buy homes in Spain during 2017 rose by 10.9% with respect to 2016. According to the Real Estate Yearbook 2017 from the College of Registrars, 310,640 mortgage loans were signed, a figure that represents an increase of 56% compared to the minimum level recorded in 2013. But, despite that significant gain, the figure is still well below the 1.3 million mortgages signed in 2006.

The study reveals that the number of residential mortgages increased in every autonomous region last year, with double-digit growth rates in eight of them. The largest increases were recorded in the Community of Madrid (17.8%), La Rioja (17.8%), Asturias (16.5%), Andalucía (11.7%), Cantabria (11.5%) and the Community of Valencia (11.3%). The regions where the greatest volume of mortgages were signed included Andalucía (60,026), the Community of Madrid (56,866), Cataluña (50,848) and the Community of Valencia (32,408).

In addition to domestic buyers, international purchasers also become more active. In fact, 6.9% of the residential mortgages signed last year were formalised by foreigners, exceeding 21,000 contracts in absolute terms, although three times as many overseas buyers purchased a home in Spain without any financing at all.

The nationalities with the highest percentage weight in terms of residential mortgages signed over the total number of mortgages formalised by foreigners were Romanian (11.6%), British (9.3%), Chinese (8.4%), Italian (5.8%), French (4.6%), Moroccan (4.2%) and German (4%).

Original story: Eje Prime 

Translation: Carmel Drake

Investors Are Buying More Homes Than Ever

12 September 2017 – El Mundo

House and rental prices are experiencing a robust increase, which means a perfect combination for the yield on homes to grow and the residential market to attract investors. In this context, according to the XXV Housing Market Report prepared by the Tecnocasa Group and the Universidad Pompeu Fabra (UPF), 28.7% of the second-hand house purchases closed during the first quarter of 2017 were made for investment purposes.

In fact, the volume of investors buying homes is higher than ever recorded by Tecnocasa and has almost doubled since 2013 (16.3%). “Investors are still finding good opportunities, as well as generating high returns from renting homes out”, says the study.

Tecnocasa took the opportunity to perform a detailed analysis of the investor profile. The first noteworthy fact is that this buoyant demand is coming from people who are older than those typically buying their first home. Specifically, more than half of the investor buyers are aged 45 years old or above. In terms of their employment status, 37.38% are self-employed, 36.18% have permanent contracts and 14.66% are pensioners. The self-employed and pensioner cohorts are both purchasing more for investment purposes than for their primary residence (11.96% and 10.28%, respectively). In terms of the nationality of the residential investors, Spaniards exceed foreigners hands down (85.9% vs. 14.1%).

The large increase in investors, to record levels, is not complaining at the sight of the juicy returns that homes are generating in comparison to financial products, given that the price of money is fixed at 0% and shows no sign of rising. Meanwhile, according to the Bank of Spain, the average home in Spain generates a return of 9.5% – a percentage that reaches the double digits only for tourist properties in certain areas of large cities. Of that gross figure of 9.5%, 4.3% comes from the rent itself and the remainder represents the gain from increasing sales prices.

That is because second-hand house prices rose by 8.24% YoY during the first half of the year, according to the study by Tecnocasa, which works with real prices of sales completed by the company itself. Moreover, the market has entered a positive spiral, which has seen second-hand house prices rise for six consecutive 6-month periods. Above all, in large cities such as Barcelona and Madrid, where second-hand properties are the most expensive in the country, costing €2,754/m2 and €1,970/m2, on average, respectively.

According to Tecnocasa, the significant presence of investors in the market is positive. “If it is true (as some people say) that a new bubble is starting to grow, it will be very different to the previous one (and much less harmful) given that it will not be based on loans, but rather on savings”, says the firm. In this sense, the real estate company stresses that 33.1% of primary residence purchases are paid for in cash, a figure that soars to 78.4% in the case of investors (…).

Moreover, the market for second-hand homes seems to have significant upwards potential, given that prices are currently 48.1% below the peaks of 2007, when the average price per square metre exceeded €3,500/m2.

Original story: El Mundo (by Jorge Salido Cobo)

Translation: Carmel Drake

Notaries: Foreigners Bought 20% Of All Homes Sold In 2015

10 May 2016 – El Economista

Foreigners purchased 76,680 homes in Spain in 2015, which represents an increase of 12.9% compared with 2014 and means that foreigners accounted for 20% of all the homes purchased last year, according to data from the General Council of Notaries, which shows that the weight of house purchases made by foreigners has been increasing since 2007.

Distinguishing between resident and non-resident foreigners, 51.7% of these purchases were made by non-resident foreigners. Even so, the purchase of unsubsidised homes by resident foreigners increased by 18.2%, which exceeded the rate of growth experienced by non-resident foreign buyers (8.4%).

All of the autonomous regions reported increases in the number of purchases of unsubsidised homes by foreigners. Four regions recorded increases below the national average, namely Cataluña (+4.9%), Comunidad Valenciana (+7.2%), Extremadura (+9.8%) and the Canary Islands (+10.3%).

The other regions recorded increases above the national average, driven in particular by La Rioja (+59.1%), Castilla-La Mancha (+57.3%) and Navarra (+41.5%). Aragón (+39.8%), Castilla y León (+34%), País Vasco (+30.7%), Murcia (+25.8%) and Cantabria (+25.5%) reported slightly lower growth rates.

On the next level, with growth rates slightly above the national average, were Galicia (+23.2%), the Balearic Islands (+22.3%), Madrid (+17.3%) and Andalucía (+13.6%).

In 2015, the regions that recorded the most the purchases of unsubsidised homes by foreigners were: the Balearic Islands (44%), the Canary Islands (39%), Comunidad Valenciana (37%), Murcia (25%) and Andalucía (25%).

By contrast, the regions where operations made by foreigners carried the least weight were: País Vasco, Cantabria, Castilla y León, Galicia and Extremadura, where they accounted for around 4%.

Prices increased by almost 3%

The average price per sqm of house purchases made by foreigners in 2015 amounted to €1,598/sqm, which represents a YoY increase of 2.9%. The average price of homes acquired by non-residents rose by 5.6%, to €1,792/sqm, whilst the average price of properties bought by resident foreigners decreased by 0.1% to €1,367/sqm.

The average price of homes acquired by foreigners was higher than the national average in the Balearic Islands (€2,580/sqm), País Vasco (€2,047/sqm), Madrid (€1,867/sqm) and Cataluña (€1,856/sqm). Prices in the other regions fell below the national average, with the lowest prices recorded in Extremadura (€576/sqm), Castilla-La Mancha (€597/sqm), La Rioja (€710/sqm) and Castilla y León (€712/sqm).

In terms of the nationality of the foreigners who bought homes in Spain, the most active buyers were British (which accounted for 20.6% of the total), followed by the French (8.8%), Germans (7.5%), Belgians (5.7%), Italians (5.5%) and Romanian (5.3%). Those nationalities accounted for more than half of the transactions involving purchases of unsubsidised homes made by foreigners in 2015.

The nationality that increased its level of activity by the most in the market for unsubsidised homes during 2015 was Romanian, with a YoY increase of 59%. In addition, Ecuadorian (+43.1%), British (+37.7%), Moroccan (+25.8%), Italian (+18.5%), Irish (+17.8%), Chinese (+16.8%), Swedish (+15%), Argentine (+14.8%) and Swiss (+13.6%) buyers recorded YoY growth rates above the national average.

Original story: El Economista

Translation: Carmel Drake

INE: 3M New Homes Since 2001, But 62% Not Yet Paid For

26 April 2016 – El Economista

The real estate boom at the beginning of this century caused the housing stock in Spain to increase by almost three million. Most of those homes were acquired as main residences, but the majority have not been paid for yet (they still have outstanding mortgages). That is according to Spain’s National Institute of Statistics (INE), which estimates that 2.974 million homes were constructed between 2001 and 2010. Of those, 1.85 million (62%) still have mortgages pending payment.

Another 562,000 homes constructed in the last decade have also been sold and they have already been paid for, either because they were paid for in cash at the time, have been inherited or because their mortgages have already been paid off. Another almost half a million (482,000) are rented out as main residences and another 79,000 are transferred or low cost homes.

This data corroborates the fact that Spain is still a country of “owners”. In 2015, 77.3% of households lived in homes that they owned, both with mortgages and without, a percentage that was slightly lower than the 78% seen in 2014. By contrast, the number of households that rent their homes increased from 16.6% of the total in 2014 to 17.5% in 2015.

According to INE, although in the case of homes constructed within the last decade, the proportion is much higher, 28% of households live in homes with mortgages, whilst 48.9% of homes have already been paid for.

Only 91,900 homes were built between 2011 and 2015

INE’s data also reflects the slowdown that the property sector has suffered since 2010. Whilst 1.275 million homes were constructed between 2006 and 2010, during the next five year period (2011-2015), that figure was 14 times lower: 91,900. This shows the decline that the property sector has suffered since the burst of the real estate bubble.

The same phenomenon can also be seen in the number of mortgages signed, which, despite the progress made in 2015, still falls a long way belong the level seen during the bubble. Specifically, in 2015, loans amounting to €25,934 million were signed to buy homes, which represented an increase of 24% with respect to 2014. But that figure falls well short of those recorded in 2006 and 2007, when loans worth €180,000 million were granted. In other words, the house loans signed last year had a combined value that was 7.5 times lower than during the years of the boom.

In addition, INE has identified that housing tenure regimes varies by nationality. In this way, 59.7% of households with at least one foreign member rent their homes, compared with 12% of households in which all of the household members are Spanish.

Original story: El Economista (by Inés Calderón)

Translation: Carmel Drake