Traffic Restrictions in ‘Madrid Central’ Drive up Parking Space Prices

16 March 2019 – El País

The Town Hall of Madrid, led by Manuela Carmena, introduced new traffic restrictions in the city centre (Madrid Central) in November last year on a provisional basis. As of Saturday 16 March, fines are now being levied on vehicles that enter the area illegally.

Only those vehicles owned by people who own or lease a parking space within the designated area may access the area, regardless of the environmental label assigned to their vehicles, if they are not residents. As such, parking spaces are in demand and so their prices have soared in the last 4 months.

In fact, prices have risen by between 20% and 30% following the imposition of the traffic restrictions. For a parking space that used to cost €20,000, vendors are now asking €25,000, and for a space costing €40,000 previously, vendors are now asking between €45,000 and €48,000, according to Daniel Lucía, founder of the company ParkingYa!, created twenty years ago and which sells more than 250 parking spaces per year.

According to Pisos.com, the average price of a parking space in the Centro district is now €52,100. In the Spanish capital in general, the average price amounts to €21,300. Moreover, even though the prices of parking spaces rose by between 10% and 20% across Spain in 2018, they are still 30% cheaper than in the years before the real estate bubble, when parking spaces in Centro and Salamanca were sold for €90,000 or €100,000.

These assets generated stable returns of 6.2% across Spain in 2018, compared with 5.5% in 2017, according to Idealista. In Madrid, the yield was 3.4%, although that figure varied by district. Location is key, as that typically determines the ease with which a space can be leased. Parking spaces in the city centre are always less profitable (generating less than 4%) than those on the outskirts but they are safer investments as are rarely unoccupied.

Original story: El País (by Sandra López Letón)

Translation/Summary: Carmel Drake

Pisos.com: House Sales will Amount to 520,000 in 2018

29 November 2018 – Expansión

The housing market is going to break a record in terms of sales in 2018, by exceeding the 500,000 threshold for the first time since 2008. The strength in demand and the pull of the large capitals is going to translate into 520,000 house sales this year, up by 13% compared to 2017, according to forecasts from the portal Pisos.com.

On the other hand, the dynamism of the market and the shortage of available supply in the areas where demand is greatest will continue to cause prices to increase. They could close this year with a rise of 6%, with a price per square metre of €1,700/m2, and in 2019, flats will cost between €1,750/m2 and €1,800/m2 on average.

In terms of forecast house sales in 2019, the Head of Research at Pisos.com, Ferran Font, explained that “these figures will be maintained, given that the upwards trajectory is close to reaching its reasonable ceiling”. “Over the next few years, we expect the sector to close between 500,000 and 600,000 sales per year. If that figure were to increase to 800,000, it would be a bad sign for the sector”, added Font.

The arrival of investors into the real estate market explains part of the upwards performance of the sector. 25% of house sales were made without the need for financing, “which shows that property is serving as a good refuge for investment during the period of low interest rates”.

Andalucía, Cataluña and Madrid are the autonomous regions where most house sales are taking place. Nevertheless, the entry of the Community of Valencia into the leading regions is worth noting. According to Font, it is a growing market, where there is a lot of activity. As a result, the Community of Valencia is where there are the most sales for every 1,000 inhabitants. Meanwhile, Madrid will close the year with 78,000 house sales, up by 13% YoY to account for 15% of the national total.

In Barcelona, by contrast, “there is a change in the trend”, warns Font. The increase in house prices that the Catalan capital experienced at such high rates during 2016 and 2017 has reached its peak in 2018.

As a result, demand is moving to other towns. “Initially, it was moving towards the outskirts, but now it is moving towards adjoining municipalities” noted Font.

The maximums reached in the Catalan capital and the reorientation of demand are having an effect on the number of sales registered in Barcelona. At the beginning of 2017, Barcelona was growing at double-digit rates. But by the end of last year, sales had started to moderate, and during the first quarter of 2018, they started to register YoY decreases of 17% (…).

Original story: Expansión (by I. Benedito)

Translation: Carmel Drake

Ministry of Development: House Sales Return to Pre-Crisis Levels

1 October 2018 – Voz Pópuli

There is no doubt about it. House sales have been reactivated. The clearest evidence yet is the latest data published by the Ministry of Development. According to the figure, in the second quarter of the year, more than 160,000 homes were sold, which represents an increase of 11.5% YoY. That volume has not been seen since the second quarter of 2007, before the outbreak of the financial crisis, when 227,000 units were sold.

Over the last twelve months, between July 2017 and June 2018, almost 560,000 homes were sold, up by 12.1% compared to the previous twelve months.

All of the autonomous regions recorded increases – in the second quarter – with the exception of the Spanish islands and Ceuta and Melilla. Nevertheless, based on the cumulative figures for the year, all recorded positive results. By municipality, Madrid registered the most sales during the second quarter, with 12,949.

In terms of home type, second-hand homes continued to dominate, accounting for 91% of the total. New home transactions only accounted for 8.5% of all house sales.

Mortgages

After a decrease in March, July brought with it the fourth consecutive monthly YoY increase in the field of mortgages, which exceeded double digits once again. Mortgages recorded three months of decreases with respect to the interest rate, whilst on an annual basis, they have now accumulated a decrease of more than 6%, making it more attractive to take out credit, according to explanations provided by the Head of Research at pisos.com, Ferran Font.

The signing of fixed-rate mortgages also returned to just above the 40% threshold in July, which has only happened twice so far during 2018.

Original story: Voz Pópuli (by David Cabrera)

Translation: Carmel Drake

Registrars: House Sales Exceeded 134,000 in Q2 2018

4 September 2018 – Expansión

The housing market is performing well, so much so that forecasts indicate that more than half a million house sales will be completed this year (…) whereby returning to pre-crisis levels.

During the second quarter of the year, 134,196 units were sold, up by 12.4% compared to the same quarter in 2017. That is the highest figure recorded in a second quarter since 2008, when 152,630 sales were registered, according to real estate statistics published yesterday by the College of Registrars.

The slight moderation in GDP growth, which is expected to rise by 2.7% in 2018, according to Government forecasts, has not prevented the real estate market from reaching cruising speed. Domestic demand, which is continuing to sustain the Spanish economy, is allowing for a reduction in the unsold stock of homes, thanks to the pull of large Spanish cities. The strong demand that is driving these figures is also having an impact on prices, which rose by 10.7% between April and June.

“The statistics are continuing to reflect the excellent performance of the sector”, said Ferran Font, Head of Research at Pisos.com, given that during the second quarter, the highest volume of transactions for 40 months was recorded.

The drivers of the increase in prices and demand relate to the increase in consumer confidence in the economy, which has boosted private consumption, and the greater weight of housing as an investment alternative, in a volatile environment where interest rates are low. This behaviour is feeding the forecasts of the experts, who expect 2018 to close with house sales of between 500,000 units, according to the ratings agency S&P, and 600,000, as predicted by the consultancy firm Jones Lang La Salle (JLL).

Nevertheless, the market is not evolving in a homogenous way. On the one hand, the sale of second-hand homes is driving the figures, accounting for 83% of total sales, whilst new build homes are more expensive. Thus, second-hand house sales between April and June recorded their highest figure since the middle of 2007, with 111,537 sales, up by 12.2% compared with Q2 2017. Although by volume there were significantly more second-hand house sales in Q2, it is also worth noting the growth rate of the sale of new build homes, which rose by 12.9% to reach 22,659 units sold.

In terms of prices, the situation is different. In general, new build homes are more expensive than second-hand homes. According to a report published by Pisos.com yesterday, the price of second-hand homes amounted to €1,612/sqm in August, up by 5.5% compared to a year ago.

By contrast, the price of new homes in Spain rose by 5.9% in June, according to data from Sociedad de Tasación. Nevertheless, that figure is skewed by the pull of the large capitals. “The average prices of new homes in Spain rose by 5.9%, but that figure decreases to 2.8% if we eliminate the impact of Madrid and Barcelona, which means that prices are in line with other fundamental factors of the Spanish economy”, indicate sources at Sociedad de Tasación.

The average price of a 90 sqm home in a provincial capital is around €205,600, whilst in the other cities, the average price amounts to €1,605/sqm, which represents a rise of 2.9% compared to 2017.

The Spanish market is still growing at several speeds, with the large cities acting as links in a chain pulling up prices and sales. Madrid, Barcelona and Alicante are the provinces where the most homes were sold during the second quarter (…).

Original story: Expansión (by Inma Benedito)

Translation: Carmel Drake

INE: The Number of Mortgage Signings Soared by 34% YoY in April

27 June 2018 – Expansión

The number of mortgages constituted over homes in Spain amounted to 28,724 in April 2018, which represents an increase of 34.2% compared to the same month in 2017.

According to data published today by Spain’s National Institute of Statistics (INE), the increase with respect to the month of March was 9%. In terms of the cumulative numbers so far this year, the increase amounts to 11.6%.

Meanwhile, the capital loaned rose by 46.5% in April 2018, compared to April last year, to €3.5 billion. Moreover, the average amount loaned in April of this year amounted to €123,256, up by 9.1% in YoY terms.

By nature of property, mortgages constituted over homes accounted for 64.7% of all the capital lent in April.

For mortgages constituted over homes, the average interest rate in April 2018 was 2.67% (16.7% lower than in April 2017) and the average term was 24 years. 60.6% of mortgages over homes were constituted at floating rates and 39.4% at fixed rates. Fixed rate mortgages experienced a 30.7% increase in YoY terms.

The average interest rate at the beginning of a mortgage term is 2.42% for floating rate mortgages over homes (a decrease of 22.3%) and 3.15% for fixed rate mortgages (6.1% lower).

Fernando Encinar, Head of Research at Idealista, considers that the “significant increase in the volume of mortgages registered in April with respect to last year should be adjusted for the effect of Easter, although even taking the sum of March and April in both years, the increase is still a healthy 12%”.

According to him, “the banks are still willing to grant mortgages, they are opening their hands slightly, but they are not the motors behind the rise in house sales. Fixed rate products are rising slightly with respect to floating rates, and so are the prices of them, undoubtedly the result of more expensive financing. Even so, more mortgages are still being repaid than registered”.

For Ferran Font, Head of Research at pisos.com, these data confirm “that in March, we were not looking at a change in trend, but rather the effect of Easter, which fell in April in 2017. That percentage strengthens the growing trend in recent months, after a month of negative YoY growth”.

By region, the autonomous regions with the highest number of mortgages constituted over homes in April was the Community of Madrid (6,018), Andalucía (5,154) and Cataluña (4,700).

Meanwhile, the highest YoY variation rates were recorded in the Balearic Islands (66.7%), the Community of Madrid (62.4%) and Castilla-La Mancha (54.2%).

The autonomous regions where the most capital has been loaned for the constitution of mortgages were the Community of Madrid (€997.9 million), Cataluña (€708.1 million) and Andalucía (€531.8 million).

In total, 40,005 mortgages over properties were signed in April, up by 36.5% with respect to a year earlier. Of the total, 1,350 corresponded to rural properties (+21.4%) and 38,655 to urban assets (+37.1%).

Original story: Expansión 

Translation: Carmel Drake

Idealista: Rental Prices Rose by 13.2% in Málaga in 2017

11 June 2018 – Diario Sur

Do you live in Málaga for less than €700/month? Then, hold on tight to your home as if it were a treasure. These days, people who are coming to the end of their rental contracts or who are experiencing life changes that are forcing them to find homes in the city – whether it be a move for work, a separation or an emancipation from the family home – are coming up against a harsh reality: the high cost of rent, which has gotten worse to the extent that, today, homes coming onto the market have an average monthly rent of more than €1,000 in half of the neighbourhoods in the provincial capital. That is according to statistics based on the active adverts on the real estate portfolio Idealista, which calculates that rental prices increased by 13.2% over the last year, one of the highest rises recorded in all of Spain’s large cities. Over the last five years, the cumulative increase amounts to 38% and the price per square metre now amounts to €9.80, the highest of all of the Andalucían capitals.

The sharp rise in prices is the consequence of a significant imbalance between supply – which has decreased by 36% in three years, judging by the adverts on Idealista – and demand for rentals, which has increased by more than 120% over the same period. “What is happening in Málaga is what happened previously in Madrid and Barcelona: a genuine shortage of rental housing, especially in the Centre and Teatinos districts, which are the most sought-after areas”, says Carlos Rueda, spokesman for Idealista in the south of Spain, who knows real estate agents in those neighbourhoods who have waiting lists with more than 100 people on them.

Since Málaga has come late to this trend, its prices are now rising rapidly, whilst prices in the country’s two largest capitals are starting to enter a stabilisation phase, according to the Head of Research at Pisos.com, Ferrán Font. “In Barcelona and Madrid, there are areas where prices have stopped rising because price increases cannot be infinite in the rental market”, he added.

But in Málaga, that ceiling has not yet been reached. Inmaculada Vegas, Partner of the real estate agency specialising in rentals Rentacasa, summarises the situation as follows: “The supply has decreased significantly; almost no homes come onto the market. And those that do come on are very expensive. Many owners can’t help themselves: they see that their neighbour has let his home for €800 and so they raise their asking price to €900…the problem is that they find people to pay those prices”, she explains.

The perception of rising prices is even greater in the case of rentals governed by the old Urban Leasing Law, which are being updated now after five years. They are contracts that were signed at the height of the crisis (2013) and now they are being renewed in a radically different scenario. “In those cases, prices may rise by €300 or €400 overnight”, explains Carlos Rueda (…).

For Vegas, much of the blame for what is happening lies with tourist rentals: “Over the last two years, we have seen continuously how long-term rentals are being taken off the long-term rental market to be let by the day or by the week, above all in the Centre, but increasingly in the east of the city as well”, she says.

Rueda does not agree that the influence of holiday rentals has been that great. In his opinion, “since the crisis, Málaga has seen a huge explosion in demand for rental properties, not only from those who cannot afford to buy but also from those who want to live in rental homes” (…).

Original story: Diario Sur (by Nuria Triguero)

Translation: Carmel Drake

Spain’s Large Cities Are Running Out of Land for New Homes

18 February 2018 – La Vanguardia

Spain’s large cities, led by Madrid and Barcelona, are running out of developable land on which to build homes, primarily due to administrative obstacles, according to experts, who warn that this shortage is pushing up final prices.

The urban planning regulations establish very long turn-around times and are very rigid when it comes to changing the use of land to be able to adapt plots to the demands of citizens, according to the Managing Director of the property developer association Asprima, Daniel Cuervo.

Moreover, the political changes in the town halls typically involve changes in the development plans for cities, which means more delays in the land management process.

In his opinion, the regulations need to be simplified, to make them more agile, and legal certainty needs to be strengthened.

Cuervo has advocated placing the responsibility for large city urban planning in the hands of a body of independent experts who would decide what is best for citizens, without their decisions being affected by political ideologies.

Currently, in Madrid, there is developable land ready for the construction of around 20,000 homes, according to Cuervo, who points out that, although there are lots of plots, they cannot be used because they have “legal problems” and are indivisible, which complicates their use as sites for house building.

“In Madrid and the metropolitan area of Barcelona, there is land under development but the political decisions of the town halls to suspend urban developments is leading to an increase in the prices of buildable land and, therefore, in house prices”, he added.

The President of Quabit, Félix Abánades, underlines that the shortage of land and tensions in prices “are happening only in certain areas of the large cities” and recalls that, currently, the average price of land is less than half the value it reached in 2007.

“In general, as property developers, we are being more rigorous in our purchases”, said Abánades, who indicates that Spain currently has enough buildable land for approximately 1.5 million homes.

At the current and forecast rates of construction, “that land will supply the market for the next 8 to 10 years”, but in some very specific areas, such as Madrid, Barcelona, Málaga, Bilbao and certain coastal towns, land needs to be developed as a priority.

In his opinion, if there is a shortage of land today it’s because, during the years of the crisis, all of the urban planning management processes were suspended. Moreover, “absolutely essential” projects are still being blocked in cities such as Madrid, including the Castellana Norte project and several developments in the south-east of the capital.

“It is essential that the administrations streamline urban land management, and facilitate and promote the processing of new urban plans”, he said.

Property developers are facing enormous difficulties in the generation of buildable land and there is a paradox in that the areas with the most acute shortages of land are precisely those where demand for housing is highest. Ultimately, that is hurting buyers the most because homes are becoming more expensive, according to sources at Neinor Homes.

The stoppage caused by the crisis led to a mismatch between the creation of buildable land by the authorities and the absorption of that land by the property developers, say sources at the property developer.

“It should be possible to reach an agreement between the politicians, businessmen and technicians to enable a more efficient way of managing the land”, according to Neinor.

The CEO of Aedas Homes, David Martínez, added that, as demand recovers and the stock of homes decreases, inflationary tensions are arising in terms of the available land.

The urban transformation process in Spain (from land not suitable for development to developable land) is tremendously complex, causing processing times to lengthen beyond what is “reasonable and desirable”, increasing the investment required to build homes (…).

Spain is a country where new-build homes suffer from “lots of administrative obstacles” says the Head of Research at Pisos.com, Ferran Font, who laments that the municipal administrations do not facilitate the creation of suitable new products for the consumer, given that they forecast less demand, which, in turn, puts upward pressure on second-hand house prices.

To avoid that “it would help to have greater openness and more dialogue on the part of the municipal administrations, given that new build properties could help to decongest the most central districts of our cities and move pressure away from them towards peripheral neighbourhoods, whose expansion is being compromised by excessively slow decision making”, he added.

Original story: La Vanguardia

Translation: Carmel Drake

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

RE Portals Regard Lower Rate Of House Sales Growth As “Normal”

30 April 2017 – Europa Press

The real estate portals regard the moderation in the growth in house sales in February (which rose by only 1.2%, according to data published in April by INE) as a “symptom of normalisation”. They also believe that this data should not be interpreted as a “step backwards”, given that “very positive”, albeit “less bulky” figures are predicted for 2017.

The Head of Research at Idealista, Fernando Encinar, said that, although the figures are not “spectacular” and the statistics reveal a month-on-month decrease, they are still “positive” since they represent the best month of February since 2011.

Moreover, he said that if we take into account the homes sold during the last twelve months, the figure amounts to more than 410,000, which is 14% higher than during the previous 12 months. Moreover, this figure that “is getting closer to a normalised market”.

In addition, the Head of Research at Fotocasa, Beatriz Toribio, considers that this slowdown in the growth in house sales is a consequence of the trend towards normalisation in the Spanish real estate market.

“2017 will be a very positive year for the sector, in which we expect the recovery to be consolidated, although it is true that the increases in the different statistics that measure the sector’s health may not be as bulky as last year”, she explained.

A “very positive” year, with a “slow and moderate” recovery

According to Toribio, the sector is resuming its activity “in a firm and consolidated way, thanks to the return of credit, the improvement in the economy and interest from investors in homes”, but she states that “we should not forget that we are starting from a very low level, after the significant decreases recorded during the years of the crisis”, which means that the recovery will necessarily be “slow and moderate”.

Andalucía, Cataluña, the Community of Valencia and the Community of Madrid were the autonomous regions that recorded the highest number of operations (during 2016), which shows that “the improvement in the sector is not distributed evenly (across the country)”.

Finally, the Head of Research at Pisos.com, Manuel Gandarias, highlights that the sales figure has now exceeded one continuous year of increases. “The YoY data for the month of February shows a decrease compared to the figure in January, which is not the case if we take into account the fact that the data reflects operations undertaken between the end and beginning of the year when there are typically fewer signings”, he added.

In this sense, Gandarias explained that, although it is true that the YoY increase is “minimal” and is no longer in the double digits, the data “should not be interpreted as a step backwards, in any way”, but rather that it represents a “symptom of normalisation, given that we are no longer making comparisons with negative figures”. “It continues the positive trend, which has now been recorded consecutively for the last 13 months”, he said.

Original story: Europa Press

Translation: Carmel Drake

INE: House Sales Rose By 14% In 2016 To 403,866

13 February 2017 – Expansión

On Friday, official data from Spain’s National Institute for Statistics (INE) certified that 2016 was the year of recovery in the housing sector. In total, 403,866 homes were sold, up by 13.6% compared with 2015. It was the third consecutive year of growth following an increase of 11.5% in 2015 and 2.2% in 2014, and it was the first time since 2010 that the property market exceeded the psychological barrier of 400,000 operations. The cumulative increase in the number of house sales since the last year of the recession in the real estate sector now exceeds 30%.

18.7% of the homes sold and purchased in 2016 were new and 81.3% were second-hand. The number of operations involving new homes decreased by 1.7%, whilst the number involving second-hand home sales rose by 17.8%, with respect to 2015.

At this point, it is worth noting that the INE considers all homes aged over five years old as “second-hand” homes, even if no-one has ever lived in them, something which happens a lot with the stock held by the banks.

“Our expectations were fulfilled during the year, despite the turmoil created by the political uncertainty and other problems, which could have easily delayed the recovery. People buying and selling homes to reposition themselves on the property ladder have driven the boom”, said the Director of Research at Pisos.com, Manuel Gandarias.

More new builds in 2017

In any case, the hegemony of the second-hand market is a trend that may start to reverse this year: “During 2017, we will see new build homes gaining momentum and growing at a faster rate”, said Gandarias.

“House sales will continue growing at a good pace, but new builds will give us more positive data and if financing is maintained at its current levels, increasingly more people will be able to access mortgages”, said Beatriz Toribio, Head of Research at Fotocasa.

The number of house sales grew in every autonomous region in 2016. The highest increases were recorded in the Balearic Islands (31%), Cataluña (20%), Extremadura (18.6%), Asturias (16%), Aragón (14.7%) and Cantabria (13.7%). The Community of Madrid registered an annual increase of 12.2%. Meanwhile, La Rioja (5.7%), Murcia (7.5%) and Galicia (7.7%) recorded lower increases with respect to 2015.

Based on the number of house sales registered, the autonomous regions with the highest number of sales per 100,000 inhabitants in 2016 were the Balearic Islands (1,521), the Community of Valencia (1,478) and the Canary Islands (1,196).

89.7% of homes sold in 2016 were free (unsubsidised) and 10.3% were social housing properties. The number of unsubsidised homes sold increased by 13.5% with respect to 2015 and the number of social housing properties rose by 14.5%, according to INE.

For Fernando Encinar, Head of Research at Idealista, the strong increase in 2016 is “an accolade to the normalisation of the sector, which despite the turmoil in the mortgage market, managed to sell 50,000 more homes”. “Over the next few months, we will see the sales statistics continue to rise, although it is possible that we will see growth rates moderate slightly, driven by higher mortgage rates”, he added. (…) .

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake