New Home Permits Fell by 36.6% in March

Requests for permits to build new homes fell to 5,956 in March – when the health crisis first started – down by 36.6%. The first quarter of the year closed down 15%.

Applications for permits to build new homes fell by 36.6% in March, at the start of the crisis, with 5,956 applications registered, according to official data from the Ministry of Transport.

In this way, requests for authorisation to build homes fell from 9,086 the previous month and from 9,405 in March 2019.

New Build Homes have Appreciated by 148% over the Last 25 Years

New build homes have experienced a significant increase in value over the last 5 years. According to data from Sociedad de Tasación, new build properties appreciated by up to 148% between 1995 and 2019, despite the severe decrease suffered by the real estate sector following the 2008 financial crisis.

Specifically, the average unit price of new build housing in Spain amounted to €989 per square metre in 1995, whereas in 2019, that value had risen to €2,453/m2, according to data from ST.

Fotocasa: House Prices in Ibiza Cost 38% More Now Than in 2008

25 April 2019 – El Confidencial

Together with Madrid and Barcelona, the real estate market in the Balearic Islands has led the real estate recovery in recent years. Boosted by its geographical limitations (land for the construction of new homes is finite), the boom in tourist rents and the huge push from foreign demand (foreigners account for 30% of transactions), house prices have soared over the last four years to return to the levels of the bubble, and, in some cases, even higher.

Specifically, house prices in both Ibiza and Calvià are now higher than their historical peaks at the height of the previous cycle (up by 38% and 1.6%, respectively, compared to February 2008). That is according to data published by Fotocasa relating to second-hand homes, which reveals that the number of building permits being granted in the two municipalities has also returned to pre-crisis levels.

In fact, Ibiza is one of the most expensive cities in Spain for buying a home, after San Sebastián and Sant Cugat del Vallès, according to Engel & Völkers. Much of the rise in house prices on the island is due to the strong rise in demand, especially from overseas buyers, with Germans leading the ranking by nationality.

According to the College of Registrars, the Balearic Islands is the second most active autonomous region in Spain in terms of house sales with 13.41 sales per 1,000 inhabitants, outperformed only by the Community of Valencia with 15.88 and ahead of the Community of Madrid with 11.63. Moreover, it is the eighth most active province by absolute number of transactions.

Original story: El Confidencial (by E. Sanz)

Translation/Summary: Carmel Drake

ASG is on a Mission to Purchase Undeveloped Plots in Sevilla

5 March 2019 – Diario de Sevilla

Buildable land is extremely scarce in Sevilla and as such, the investment funds looking to build new homes in the Andalucían capital have limited options when it comes to sourcing plots. They are being forced to buy sites on the outskirts of the city whose development is blocked by any number of urban development obstacles or by a lack of basic infrastructure.

One of the most active funds in this regard is ASG Homes, the residential division of ASG in Spain, which wants to build 1,000 homes in Sevilla Este. It already has more than 500 units under construction, but in order to execute the rest of its plan, it needs planning permission to be unblocked on one of the many plots located in Higuerón Norte, San Nicolás, Buen Aire, most of Santa Bárbara, Torreblanca Este and Oeste, Palmas Altas and Pítamo Sur. Together, they have the capacity for the development of 25,000 new homes.

The CEO of ASG Homes, Víctor Pérez-Arias says that whilst his fund prefers to acquire developable plots, in the case of Sevilla, it is willing to purchase plots that still need to pass through an urbanisation process, given the lack of available alternatives.

He added that his fund is involved in several operations of this kind in Alicante, Madrid and the Costa del Sol, and that it is also interested in the rental home sector given the high demand in Sevilla and across Spain in general.

Original story: Diario de Sevilla (by Ana S. Ameneiro)

Summary/Translation: Carmel Drake

High Land Costs Drive up House Prices in the Balearic Islands

27 February 2019 – Diario de Mallorca

The property market in the Balearic Islands is experiencing the perfect storm. Very high land prices are driving up the cost of the few new homes that are being built. As such, local residents are facing serious difficulties when it comes to affording a home.

Not only are land prices high; in many cases, the plots are owned by large business groups, which are opting to hold onto them to benefit from further capital appreciation rather than develop or sell them immediately. What’s more, the few new homes that are being developed are very expensive, beyond the reach of most local families.

These factors are compounded by the complete failure on the part of the public authorities to construct any social housing in recent years, which only serves to aggravate the housing shortage in the market.

There is a great deal of demand, not only from local families, but also from foreigners, who want homes of their own on the island, and from seasonal workers moving from other parts of the country. Moreover, supply is limited and as such, prices are soaring. This situation is made worse by the fact that many overseas buyers and renters can afford to pay more than most islanders, which is driving out the locals.

All in all, it’s a gloomy picture for island residents.

Original story: Diario de Mallorca (by F. Guijarro)

Summary/Translation: Carmel Drake

Ministry of Development: 100,733 New Build Permits were Granted in 2018

28 February 2019 – Idealista

In 2018, 100,722 building permits were granted to construct new homes, 25% more than a year earlier; a figure not seen since 2009, when 110,849 permits were granted, according to data from the Ministry of Development. Of the total figure, 79,453 were granted to build blocks of flats and 21,254 to build houses.

In this way, building permits have now recorded five consecutive years of increases. In 2013, they hit a historical low (34,288 units), a figure that represented a decline of 96% from the peak year of 2006 when 865,561 permits were granted.

Despite the good results in 2018, the construction sector considers that a healthy market is one that is capable of generating around 150,000 new work permits per year.

Why is it so hard to build 150,000 homes per year?

Daniel Cuervo, Director at Asprima, points to several factors:

– Building permits take a long time to be granted (…). In general, Town Halls take 14 months to grant a licence, on average (…).

– Financing has returned to the real estate sector, but it is not immediate (…).

– Urban planning in Spain is paralysed due to the high level of legal uncertainty (…).

Meanwhile, Daniel del Pozo, Director at Idealista/News, provides some additional explanations:

– Lack of awareness about how the market works and of the real demand by the Public Administration (…).

– The main land portfolios are owned by the banks, Sareb and the funds (…) which are all waiting for prices to rise before releasing the most sought-after plots.

– The political uncertainty, the threats of interventionalism and/or changes in regulation in the real estate market also play their role (…).

Original story: Idealista 

Translation: Carmel Drake

Amenabar Grows by 15% After Handing Over 815 Homes in 2018

22 February 2019 – Expansión

The property developer Amenabar ended 2018 by fulfilling its ambitious strategic plan, which led it to sign the deeds for 815 homes over the last 12 months. “It has been a very positive year in every aspect; we have fulfilled the objectives of our strategic plan in terms of revenues, thanks to a very intense rate of (home) deliveries, with 11 new developments and the commercial launch of another 21 new projects”, explain sources at the company.

Those figures allowed Amenabar to increase its revenues by 15% over the last year, to €345 million, numbers that the real estate company expects to increase again thanks to the 5,699 homes that it currently has under construction (…).

“We have started 2019 with the goal of marketing 2,403 new homes during the first half of the year and we are working on the residential development of more than 5,507 homes in our portfolio”.

Besides launching new projects, Amenabar is going to continue increasing its delivery rate. “This year, we will hand over 1,245 homes, followed by more than 1,500 in 2020 and more than 1,600 in 2021”. In parallel, it is going to continue buying up land using the profits it earns (…).

Original story: Expansión

Translation: Carmel Drake

Savills: House Sales will Exceed 500,000 Again in 2019

19 February 2019 – Voz Pópuli

For the first time since 2008, more than half a million homes were sold in Spain last year, and the good performance is expected to be replicated in 2019 with forecasts that between 500,000 and 600,000 homes will be sold.

The deceleration of the Spanish economy – which will move from growing at a rate of 2.5% in 2018 to around 2% this year – is not expected to prevent the residential sector from consolidating its growth, although the maximum levels recorded in 2007, when 775,300 operations were signed in the country, is not going to be repeated.

“We do not think that we will return to those figures. Staying at the sales levels seen over the last two years, of close to 550,000 units sold, will be an excellent result”, explained Arturo Díaz, Executive Director of the residential market at the consultancy firm Savills Aguirre Newman, speaking to Voz Pópuli.

He considers that this rate of growth is reasonable if we take into account the rate of household creation in the country, the levels of purchases for investment and the purchases for holiday homes (…).

The real estate consultancy CBRE agrees with this outlook (…). In fact, the firm is more ambitious with its forecasts as it expects 625,000 house sale operations to be closed in 2019, due to an increase in demand (…).

The growth profile

The main real estate consultancy firms all agree that there will be an increase in new build sales in 2019, in parallel to a slight decrease in the sales of second-hand homes, and so the gap between the two will begin to close.

Moreover, they confirmed that a change has taken place in terms of the profile of house buyers in Spain, with large international investors playing an increasingly greater role.

“Whilst a decade ago, demand for residential assets was dominated by domestic private families (individuals), nowadays, the market is characterised by investment vehicles, institutional funds and insurance companies – owned by foreign capital in many cases – the most active players in this segment”, said Lola Martínez Brioso, Head of Research at CBRE.

House prices in Spain rose by 8.2% in 2018, according to the Real Estate Statistics Registry from the College of Registrars, which means that they are still well below the peaks reached during the construction boom. In 2019, the sector expects the price rises to moderate (to around 4-5%) (…).

Although the price rises will be more moderate overall, there will be important differences by area (…). By region, the experts forecast that the large cities and their metropolitan areas will continue to lead the charge in terms of house price rises, specifically, Barcelona, Madrid, Málaga and the major municipalities in those areas.

Díaz also adds that “other large cities such as Valencia and Sevilla are starting to show a high level of activity”, along with certain holiday markets, “such as the Costa del Sol, Costa Blanca and Costa de la Luz, where the recovery in domestic demand, together with the appeal that those regions have for international buyers, is generating a high volume of purchasing activity”.

Original story: Voz Pópuli (by Alejandra Olcese)

Translation: Carmel Drake

Habitat Invests €19M in the Development of 72 Homes in Madrid

17 October 2018 – Eje Prime

Habitat is expanding its portfolio of land in the Community of Madrid. The real estate company chaired by Juan María Nin has invested €19 million in the development of 72 homes in the municipality of Collado Villalba. The company plans to start marketing the assets at the end of the year.

The homes will have storerooms, 108 parking spaces, common areas, green spaces and gardens. The future urbanisation, located between Avenida de las Eras and Calle Adelfas, is the fifth land acquisition that Habitat has made in the Community of Madrid. Specifically, the plot has a surface area of 6,300 m2.

In recent months, the Catalan property developer has acquired more than 27,500 m2 of land in the region for the construction of new residential developments. It already has a presence in the Madrilenian municipalities and neighbourhoods of Valdemoro, Móstoles and El Cañaveral.

Similarly, the operation forms part of the land acquisition plan that Habitat launched after being absorbed by the US private equity firm Bain Capital in December 2017. The most recent purchase by the company was made in September. As Eje Prime reported, on that occasion, the real estate company invested €10 million in the purchase of two plots in Santander for the development of 62 homes.

The property developer is planning to build more than 9,000 homes over the coming years in different phases of development. Its residential portfolio is distributed across various parts of Spain, primarily Andalucía, Levante, Cataluña, Madrid, the Canary Islands and Cantabria.

Original story: Eje Prime

Translation: Carmel Drake

Barcelona Activates 72 Public Plots for the Construction of 4,644 Affordable Rental Homes

11 September 2018 – Inmodiario

The activation of new public developments forms part of the Plan for the Right to Housing 2016-2025, and the current data indicates a level of output never seen before in terms of the construction of new homes for public rental in the city (of Barcelona).

On the basis of all the actions planned, the municipal Government will increase the public stock of affordable rental homes in the city by 50% in six years.

72 projects

The 72 projects underway have been accelerated in recent years, and 80% of the public housing that is going to be constructed will constitute affordable rental properties.

Construction of 11 of the developments has now been completed, comprising 648 homes, some of which have already been handed over. In other cases, the final procedures are being completed so that they can be handed over to the families soon.

On thirteen public plots, construction work has begun or permission has been granted for the construction of 574 homes. The package of projects includes both those developments that are in the process of being awarded to construction companies and those that have already been built.

On 29 of the plots, public tenders to select the companies to carry out the projects have already started; the work on those sites will generate 2,331 homes. Finally, 19 other developments are in the preparation phase, and the procedures to carry out their public tenders have been started with a view to building 1,091 new homes.

More affordable homes in the medium term

In addition to the 72 plots mentioned above, work is being performed on 52 other sites to activate the construction of homes over the medium term; they are in different phases of the urban planning process to ensure that they are dedicated to the right to housing service (…).

With the objective of growing the stock of public housing still further and bringing it in line with those of other European cities, it is hoped that a group of sites pending planning permission will be granted the condition of plots so that they can also be dedicated to the construction of public housing. Most of those sites are located in areas of the city that are already undergoing transformation, such as La Marina, 22@ and La Sagrera.

Municipal resources for rental housing

In just 8 years, the growth in the stock of rental housing is going to add as many new homes for public rental as have been created over the last 80 years. Moreover, the process is mainly being carried out (95%) using municipal resources, and with support from the European public bank, given that the participation of the Generalitat de Catalunya and of the State is at its lowest level since 1981.

Besides the construction of public housing and management of land permits, the Town Hall has boosted the acquisition of homes through various instruments established to that end in the governing legislation, such as the right of first refusal, direct purchase and assignment of usufruct.

In this context, 531 homes have been purchased and another 251 are in the process of being acquired. By the end of the current mandate, more than 750 homes are expected to have been purchased and €70 million will have been invested using municipal resources only (…).

Original story: Inmodiario

Translation: Carmel Drake