Notaries: House Prices Rose By 1.9% YoY In March

18 May 2016 – El Economista

The average house price amounted to €1,261/sqm in March, up by 1.9% with respect to the same month in 2015, according to data from the General Council of Notaries, which reflects an increase in house sales of 5.8% during the period.

Specifically, the notaries registered 38,674 transactions during the third month of the year. By type of home, the sale of flats rose by 4% and by 5.2% in the case of unsubsidised apartments.

The recovery in sales of the latter is due solely to an increase in the sale of second-hand flats, by 8.5% YoY, given that transactions involving new apartments experienced a YoY decline of 18.5%. Meanwhile, the sale of family homes rose by 13%.

Prices increase, as well as sales

In terms of prices, the cost per sqm of the homes purchased in March amounted to €1,261/sqm, which represents an increase of almost 2% YoY. This rise is explained by the increase in the prices of family homes (+7%) and flats (+1.2%).

Meanwhile, the price per sqm of unsubsidised homes rose by 2%. Within this segment, the price of second-hand homes amounted to €1,361/sqm (+1.1%) and of new homes stood at €1,678/sqm (+10.7%).

Finally, the sale of other properties in March amounted to 9,262 operations (+1.2%), of which 37% corresponded to land and plots. The average price of these transactions reached €316/sqm (+96.8%).

Increase in loans

In another vein, the evolution of the mortgage market for the acquisition of homes reflects the recovery in the real estate sector, registering an increase in total loans.

In this way, the number of mortgages granted during the month of March was 29,642, which represents a YoY increase of 4.2%. The average amount of those loans was €153,929, reflecting a YoY rise of 6.2%.

Meanwhile, the number of mortgages granted for the acquisition of properties grew by 16.5% YoY, to 19,611, due to an increase in the granting of loans to purchase homes (+17.1%), as well as a rise in the loans approved for the acquisition of other properties (+10.4%).

Meanwhile, the average amount of these loans reached €134,881 (+5.9%). In the case of homes, the average capital loaned was €125,265, up by 2.7%, and for other properties, the average loan amounted to €240,336, having increased by 29.1%.

More financing for the construction sector

Loans allocated to the construction sector increased by 2.3% YoY in March, to 472 loans in total. The average amount was €277,491, taking the YoY increase to 7%. Meanwhile, the average amount of the loans granted to construct a home rose by 13.7% to €227,582.

Finally, the percentage of homes financed using a mortgage amounted to 46.7%. Moreover, for this type of financing purchase, the loan amount accounted for 78.7% of the property value, on average.

Original story: El Economista

Translation: Carmel Drake

Outlook 2016: House Prices Will Rise By 7% & Sales By 17%

28 December 2015 – Expansión

(…). According to the XXII edition of the Real Estate Pulsometer published by the Institute of Business Practice (IPE), the outlook for 2016 is promising. Next year, house prices will rise strongly (by 6.6%), sales will increase by 17.2%, construction of new homes will rise by 12.2%, mortgage lending for urban properties will increase by 16% and stock will decrease by 24.7%.

In addition, the report forecasts a gradual recovery in the rental market, a sharp increase in yields on housing and a full-blown recovery in the non-residential sector, which has broken records in 2015 and on course for a positive 2016, with fewer operations but higher prices.

The most tangible indicator of the real estate recovery will be “the increase in the sales of homes, offices, warehouses, retail premises and land (especially urban)”, says José Antonio Pérez, Director of the Real Estate Department at IPE and the author of the report. (…). We expect to see around 820,000 operations closed in total in Spain in 2016, which represents an increase of 8.1% with respect to  2015 and 23.7% more than in 2014.

Increases across all regions

More than half of the properties sold will be homes. Specifically, next year, 481,500 homes will be sold, i.e. 17.2% more than in 2015 and 50.7% more than in 2014, according to the study, prepared using data from the MAR Real Estate network of estate agents and the Network of Qualified Real Estate Advisors, cross-checked against official figures from INE, the Ministry of Development, the registries and the notaries.

Sales are expected to grow by the most in País Vasco (by 26.8%) in 2016, followed by the Balearic Islands (24.5%), Madrid (23.5%) and Cataluña (22%). Only Castilla-La Mancha is expected to experience a decrease next year: operations will decrease by 2.4% in that region, which has the highest volume of stock per capita in Spain.

In other words, the recovery will continue to take place at two speeds, but the differences (between the speeds) will be less marked, in the sense that, although we will see different speeds, improvements will be seen across almost all of Spain.

In the context of more transactions and increased mortgage lending, house prices will increase significantly. On average, by 6.6%. If we also take into account non-residential assets, property prices will increase by 8.17%, on average.

The market for new builds will also be affected. According to the Pulsometer, cranes will return to our cities, albeit gradually. Specifically, construction permits (which indicate future construction activity) will increase from 58,636 in 2014 to 82,682 in 2016. Up by 41% in two years (in 2015, they already increased by 9% YoY). Moreover, construction will begin on 39,000 residential properties in 2016, up by 12.2% compared with 2015 (34,700). (…).

The changes will also help to reduce the stock of unsold new properties. This surplus amounts to 433,583 homes at the end of 2015. In 2016, a quarter of that supply will be used up, taking it down to 326,295 units. That figure represents less than half the number in 2014 (675,945), according to the IPE’s study.

More mortgages

The real driver behind this consolidation in the residential market is financing. Mortgage lending for urban properties (in other words, not only homes, since the report does not break down non-residential financing) will amount to 426,647 (individual mortgages) in 2015, up by 23% compared with 2014. The figure for 2016 will increase again to 494,890, i.e. 16% more than this year. (…). The average mortgage in 2016 (€122,500) will be higher than since 2011 (€124,862). (…).

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

Notaries: House Prices Decreased By 2.4% YoY In Q2 2015

16 September 2015 – El Confidencial

We are clearly living in a skewed market. The experts in the sector have been saying as much for several months now and the various sets of data being published about the housing market in Spain tell the same story week in week out.

Just one week ago, the House Price Index (IPV) published by the National Institute of Statistics (INE) showed a 4% YoY increase in house prices in Q2 2015. That percentage raised alarm bells as it fuelled fears that the market may be overheating again. Today, data from the Ministry of Development shows an increase of 1.2% during the second quarter of the year compared with the same period last year, a more moderate rise than reported by INE.

Now, to cool tempers, data from the notaries reflects exactly the opposite, a YoY decrease of 2.4%, taking the average price per m2 to €1,247. According to the General Council of Notaries, this decrease is due to a 3.1% YoY fall in flat (apartment) prices, meanwhile family homes experienced an increase of 3.4%. Moreover, these latest statistics reflect important differences between the prices of second-hand homes and new properties, with a decrease of 4.5% and an increase of 9.4%, respectively.

Which data is most reliable?

According to INE, “All of the parameters relating to property prices are skewed, the market is not yet operating with any kind of normality”. As such, any figures that are published should be interpreted with caution.

In terms of statistics, rather than depending on one official set of data as an indisputable reference, we are faced with multiple reports that only serve to generate confusion and contradictions. At the state level, for example, we have data from the Ministry of Development and INE, meanwhile the notaries and registrars supply their own data to the market, and so do the appraisers and real estate websites.

All of these reports are prepared on the basis of different methodologies. In this way, the data published by the Association of Registrars differs from that released by INE and again from that supplied by the notaries. The first group publish data with a delay of two or three months, i.e. they release information about prices and transactions signed before notaries two or three months earlier. Therefore, they do not really show the increase or decrease in prices in a given month, but rather what happened in the market several months ago. By contrast, the data issued by the notaries is more or less published in real time. As such, the statistics generally do not reconcile with each other. However, if instead of looking at the exact figures or percentages, we focus on their evolution over time, all of the indicators seem to be telling the same story – the market is stabilising.

That is because we find ourselves in a market that has now emerged from the emergency room, although it is still in need of professional care. In other words, the market has not been discharged from hospital yet and it will take months, if not years, for it to return to any kind of normality.

That is mainly because we are starting from a position of historical lows in terms of sales, mortgages and the construction of new homes; therefore any upwards movement may distort the figures. As a result, it is not surprising that we are talking about increases in terms of sales and the granting of mortgages at rates exceeding double figures. We are starting from zero and therefore any upwards movement distorts the percentages.

(…)

Furthermore, we should not forget that we are dealing with a very heterogeneous market. The level of activity is not the same in Madrid as in Albacete, nor is it the same in the neighbourhood of Salamanca as in Usera. Clearly, prices and the market in general will begin their recovery in those areas in which demand is highest and supply is scarce.

Original story: El Confidencial (by Elena Sanz)

Translation: Carmel Drake

Andalucía’s Housing Sector Finally Shows Signs Of Recovery

17 March 2015 – Cinco Días

The region has joined the recovery later due to its poor employment situation.

The autonomous community of Andalucía was undoubtedly one of the hardest hit by the burst of the real estate bubble, due to the weight that holiday homes have traditionally held in the region. Attracted by the influence that the areas of Marbella and the Costa del Sol have had on the rest of the Andalucían coast for decades, Andalucía was no exception and also joined the construction craze and the boom in prices.

In fact, according to figures published by the local Government, led by the socialist Susana Díaz, based on census data compiled by the National Institute for Statistics (INE) and estimates from the Ministry for Development, the total stock of real estate in Andalucía currently amounts to around 4.5 million homes.

If we compare this figure with data from 2001 (population census numbers and housing data are compiled every 10 years), the stock of housing has increased by more than one million homes, which represents a rise of more than 25% in relative terms. This means that, just like in the rest of the country, a significant stock of unsold new homes has accumulated (in Andalucía); some sources estimate (that the stock amounts to) 150,000 properties and others, such as the Spanish Confederation of the Construction Product Manufacturers Association (Cepco) estimated (that the stock amounted to) 114,000 in 2009.

What has happened since then? As in the rest of the country, between 2009 and 2013, construction activity (in Andalucía) virtually ceased, prices experienced the largest slump in recent history and house sales dropped to historical lows, dampened by the poor employment situation and the closure of the credit tap.

Foreign buyers

In this context, sales did not begin to take off again until price reductions started to decelerate and the flow of financing started to slowly open up; and since then, sales have evolved unevenly in each region.

Six years on and Andalucía is not known for being one of the regions where house sales have grown the most or where cranes have begun to appear again, since it is still weighed down by the employment situation, which has not improved there as it has done in other autonomous regions. And this is the case, regardless of the statistics that we analyse.

If we take the most recent statistics (published last Thursday) as a benchmark, which were prepared by the Ministry of Development using data from notaries, house sales in Andalucía grew by 21% during the last quarter of 2014 with respect to the same period in the previous year. These figures are roughly equivalent to the national average (19.5%), however according to the Ministry of Development, seven regions experienced increases that exceeded those recorded in Andalucía.

Meanwhile, if we consider the statistical figures compiled by INE, which obtains its data from the property registers, then house sales in Andalucía increased by just 0.3% year-on-year in 2014, compared with an average rate of increase across Spain of 2.2%. This modest growth in Andalucía contrasts with the recoveries of 18.5% and 12% in terms of real estate sales experienced in the Balearic and Canary Islands, respectively, two other regions that are heavily influenced by holiday homes and purchases by foreigners. Even so, the surplus of new homes in Andalucía had decreased by 44.5% to amount to 63,250 new homes as of last September, according to Cepco.

And where is Andalucía in terms of prices? Again, it worth considering the two sets of statistics that are regarded as ‘official’: those published by the Ministry of Development and INE. The department led by Ana Pastor recently published its price statistics relating to the entire year 2014 (compiled on the basis of appraisal values) and although they showed that house prices (in Spain) increased by an average of 0.5% on a quarter-by-quarter basis (the last quarter in 2014 compared with the previous three months), on an annual basis (fourth quarter 2014 compared with the same period in 2013), the most recent figure was negative, with house prices decreasing by 0.3% at the end of last year.

Nevertheless, Andalucía recorded positive rates in both cases, although the increases were very modest: 0.4% QoQ and 0.2% YoY. By province, five ended 2014 with lower prices than they had recorded a year before. Meanwhile, according to INE’s data (compiled using figures from notaries), Andalucía closed 2014 with an average annual price increase of 1.8%, just one (basis) point below the highest figures, which were recorded in Madrid and Valencia, with annual increases of 2.9% and 2.8%, respectively.

Industry experts agree that the recovery in the real estate market has started later in Andalucía than in other regions, but consider that now is the moment to take advantage of the ‘pull of tourism’ to construct there once again, since there is demand, and that will generate activity and employment.

Original story: Cinco Días (by Raquel Díaz Guijarro)

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

Ministry Of Development: House Sales Grew In Every Province In 2014

13 March 2015 – Expansión

More homes were sold in 2014 than in 2013. That is a fact. The question is: how much did the market grow by? The official statistics do not tally (with each other). The Institute for National Statistics (INE) recorded an increase of 2.2% (in 2014), based on data from the property registers. Yesterday, the Ministry of Development revealed an increase of no less than 21.6%, based on data from notaries, which represents the greatest increase since it began publishing these statistics (in 2004), with a total of 365,594 transactions.

This is also the highest figure since 2010, although, of course, it is still a long way from the peak years of the real estate bubble (2007, when 837,483 transactions were recorded). One of the explanations for the disparity in the Government’s statistics stems from the fact that not all transactions recorded in the public registers are included (in the data). Moreover, there is typically a time lag, of a few months, between notarial information and data in the property registers.

In any case, the trend, which is really the important indicator in the real estate market, is becoming bullish once more. Not surprisingly, according to the data from the Ministry of Development, sales of residential properties increased by 2014 in every autonomous region, something that was unheard of in the years of the crisis.

Sales increased by the most in Madrid (44.7%), followed by Navarra (31.3%), Aragón (31.1%), Asturias (30.8%), País Vasco (29.3%) and the Balearic Islands (29.2%).

But the improvement in the market did not stop there. An annual increase was recorded in every single province in 2014. The largest rises were recorded in Ceuta (57.6%), Burgos (46.8%), Salamanca (39.2%), Zaragoza (38.2%), Guadalajara (37.9%), Vizcaya (34.3%), Melilla (34.1%) y Guipúzcoa (33.0%).

Foreigner buyers

House sales to foreigners resident in Spain also experienced a year-on-year increase in the last quarter of 2014, for the fourteenth consecutive quarter, specifically, by 19.7%, with respect to the fourth quarter of 2013, a total of 16,336 sales. Similarly, purchases by non-resident foreigners increased to 1,315 during the quarter, an increase of 13.4% on the previous year.

Overall, sales to foreigners (both resident and non-resident) accounted for 15.8% of all sales. By province, the greatest increases in the number of purchases by foreign residents were recorded in Alicante (3,852), Málaga (2,226), Barcelona (1,536), Madrid (1,285) and Baleares (1,126).

Finally, it is worth noting the healthy level of activity in the housing market in the fourth quarter of 2014, when 111,921 homes were sold in Spain. Not since 2010 have more transactions been recorded during the fourth quarter (150,494). This figure represents a year-on-year increase of 19.5%.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

INE: House Sales Accelerate Overall And Fall In 4 Regions Only

9 March 2015 – Cinco Días

The recovery in house sales is strengthening slowly, month after month, according to the statistics prepared by the National Institute for Statistics (INE) – refer to article published on Friday for high level data. (….).

(….). The sale of second-hand homes accounted for 73.1% of all sales recorded in January, whilst the sale of new homes accounted for 26.9% of transactions, heavily influenced by the scarce construction of developments that still afflicts the market. During the first month of the year, just 9,003 new homes were sold, 37.1% fewer than 12 months earlier.

Unsubsidised housing

As INE highlights in its notes, the data released on Friday relates to sales recorded in property registries for transactions closed in the months leading up to the month of January. In any case, even through there is a certain timelag, the statistics prepared by the notaries and the Ministry of Development (using the figures of the former), which lack this mismatch in terms of dates, show exactly the same trend towards a clear increase in the volume of sales. The recovery of employment and the re-opening of the funding tap, together with significantly lower prices, explain the increased volume of transactions.

By type of home, the majority of the homes sold during the first month of the year, specifically 88.8%, were unsubsidised. The sale of this type of home increased by 10.4% in year-on-year terms, to amount to 29,667 transactions. By contrast, 3,749 subsidised (VPO) homes were sold during the month, an increase of 3.3% with respect to January 2014. Another way of assessing whether this recovery is sustainable or not is to look at how this trend is evolving across the country. Although at first, only a minority of autonomous regions recorded positive annual rates in terms of house sales (those with a higher income per capita and with a higher percentage of tourist homes), now the situation has turned around (with only a minority of autonomous regions recording negative annual rates). In absolute terms, Andalucía continued to lead the ranking in terms of house sales in January, with 6,114 transactions, followed by Madrid (5,282), Cataluña (5,219) and Valencia (4,630).

Nevertheless, in relative terms, the regions that saw the highest increases in house sales were the Canary Islands (+56.7%), La Rioja (+48.3%) and Extremadura (+30%). Only four regions recorded annual decreases: Cantabria (-17.3%), Navarra (-17.2%), Galicia (-7.3%) and Castilla-La Mancha (-3.9%)

Original story: Cinco Días (by Raquel Díaz Guijarro)

Translation: Carmel Drake

Statistics Providers Agree That Spanish Housing Goes Stable

19/11/2014 – Expansion

Sector’s observers find themselves snowed under statistics flowing from many sources which often are inconsitent or even contradictory. One one hand, the Notaries said yesterday the housing prices fell by 4% in the third quarter, and on the other, Property Registrars announced a rise of 1.15%.

Is the data reliable? Well, the most important is that they inform us about certain stabilization in the sector and there are many reasons for their divergence.

The methodology used by the sources varies as the notaries base on deeds, more set in the present, while registrars employ the repeat-sales price indice calculated over a two-month data offset (the time needed to complete all proceedings related to a sale). Appraisers usually use the comparative valuation method, and web portals focus on asking prices. As a consequence, they end up in disagreement.

Both the notary and the registry data, ‘although seemingly contradictory at first glimpse, they prove the cost of homes in Spain floats towards stabilization’, says Beatriz Toribio, Research director at portal fotocasa.es. ‘This doesn’t mean, though, that the slump is over. The values still have a long way down ahead in many areas of the country’, she adds.

Manuel Gandarias, Research chief at pisos.com, explains that ‘there are several months left, given that mortgage approval improves step by step, unemployment rate remains high, the Government may surprise us with the new taxation reform and in 2015 there will be the elections’.

When it comes to property sales, just the opposite happens: the notary data are more optimistic than the registries ones. ‘In the third quarter of the year, the purchases went up 8.6% from a year earlier’, assure the Notaries, while the Registrars say the rise was of 3.5%.

The latter claim the real estate market is currently utterly chopped and they see eye in eye with the Notaries on the matter of steadier monthly sales.

According to the Registrars, the advance was triggered by pre-owned home performance (52.127 units sold), practically doubling new properties’ sales (27.434). The Notaries agree that the first see an abrupt increase (up 31.8%), and the other sharp slump (down 32.8%).

Andalusia won in the transactions number with 16.006 deals, followed by the Valencian Community (12.189), Catalonia (11.975) and Madrid’s Community (10.883), say the Registrars, adding that foreigners accounted for 13.1% of the total, led by the British (18.06%), then the French (10.48%), Russians (7.5%), Germans (6.45%), Belgians (6.19%) and the Swedish (6.08%).

In reference to default on mortgages, the number of notices about home foreclosure initiation posted 13.421, by 5.500 (29%) less than in the second quarter.

Finally, both the Registrars and the Notaries attach information justifying why their data are more trustworthy.

 

Original article: Expansión (by Juanma Lamet)

Translation: AURA REE

Why Are Housing Statistics Inconsistent?

18/09/2014 – Cinco Dias

The July real estate statistics document published by Spains General Association of Notaries implies, that the seventh month of the year saw by 17.4% approved mortgages for home purchase more than in July 2013. Also, 31.973 properties were sold, representing a 9.8% year-on-year decline (7.5% corrected). What is more, in the Notaries opinion, housing prices continue to drop, marking -10% in July.

However, last week the National Statistical Office of Spain (or INE) made public a report saying that property sales advanced by over 10% during that month and values increased 0.8% on year-on-year basis in the second quarter of 2014.

Are the data contradictory? Yes, and no. The reason for the obvious discrepancies is that each of the statistical information providers draws their data from different sources. The INE employs sales numbers from the property registers which refer to entries from the previous months, whereas the Notaries rely on their own database.

Another question is that whether it is possible for the mortgages to shoot up while home sales are descending. Well, it is, provided that during the recession over half of all the signed contracts did not require a mortgage loan, i.e. the properties were purchased in cash.

The slump in prices, limited access to financing and intensified saving in Spanish households allowed some to acquire a house without needing a mortgage. Now banks start to lend again, above all for their foreclosures acquistion, and even if their sales are not faring well, they have approved more mortgages.

In terms of prices, the reason is not so clear. Can values taper down one month and then go up the following? Yes, in line with the number of transactions sealed in each period of time and their development a year earlier. And if that was not enough, the Ministry of Public Works comes up with its statistics based on appraisers data which represent the asking prices, not the final ones.

 

Original article: Cinco Días (by Raquel Díaz Guijarro)

Translation: AURA REE