Tag: pressure

Sánchez Reveals that the Housing Law will Extend Rentals to 5 Years

12 September 2018 – El Diario

The President of the Government, Pedro Sánchez (pictured below), has demanded agreement from the political groups this afternoon regarding the next Housing Law, which will include, amongst other measures, an increase in the terms of rental contracts, and their subsequent extensions, to 5 years from their current duration of 3 years.

Sánchez posted the request on his Facebook account, with a link to Twitter, where he indicated that he was “appealing to all political forces to reach a pact that will convert housing into a right for citizens, far removed from speculation”.

The President of the Government highlighted that he wants to “shield” the “social function” of housing and he revealed several aspects in this regard.

Besides the increase in the duration of rental contracts and their subsequent extensions to five years, Sánchez highlighted “a shock plan for 20,000 rental homes to increase supply and whereby reduce the pressure on prices”.

Similarly, he promised an “improvement in the fiscal framework to stimulate supply and moderate prices”, a “review of the aid programs for young people”, and the “regulation of tourist apartments”.

Sánchez also mentioned an “improvement in the financing of housing developments through the ICO”, the Official Credit Institute, as well as a “reorientation of the State Housing Plan to promote and protect a public housing stock that is sufficient and affordable, and which allows us to attend, in particular, to the needs of the most vulnerable people in society”.

As the Head of the Government concluded, “Achieving social progress that will change the lives of thousands of people is in our hands”.

The Minister for Development, José Luis Ábalos, reported last week that an inter-ministerial group was working on specific proposals for housing, and he said that in terms of addressing the rise in rental prices, they are studying legal reforms regarding rental contract terms and extensions, amongst other measures (…).

Original story: El Diario 

Translation: Carmel Drake

Spain’s Banks Set to Sell €120bn+ in Problem Assets This Year

4 July 2018 – Cinco Días

Spain’s banks are stepping down on the accelerator to put an end to the property hangover, although it will still take another two or three years for them to get rid of all of the excesses left over from the financial crisis. And that is not so much due to the leftover real estate portfolios but more because of the portfolios of non-performing loans, a caption that is continuing to augment the balance sheets of financial institutions.

In this way, the experts hope that this year will see a new record in terms of the sale of portfolios, for an approximate total of €120 billion, including the macro-operations from Santander and BBVA, announced last year but completed this year. Without them, the figure could amount to more than €51 billion, slightly higher than in 2017, which would increase to €80 billion if Sareb manages to sell a €30 billion portfolio.

Pressure from the European Central Bank (ECB) and the Bank of Spain, as well as that exerted by the market itself, is causing financial institutions to opt to sell their portfolios of problem assets in single operations wherever possible, rather than selling them off in a piecemeal fashion, in light of the prospects of rising prices.

Interest from opportunistic funds to invest in Spain and, also forecasts for even greater price rises for real estate assets in the future, are leading the banks to take advantage of the opportunity to clean-up their balance sheets between this year and next, just 10 years after the start of the crisis, explain several experts.

“The funds have large amounts of liquidity. Moreover, interest rates are still at historical minimums (still negative) and so financing can be obtained at very low prices, hence their interest in buying large portfolios of assets linked to property. They want to take advantage of the current climate”, explains Íñigo Laspiur, Director of Corporate Finance CBRE España.

All of the experts agree that the sale by Santander of Popular’s property to Blackstone, an operation announced last year, but ratified at the beginning of this year, for a gross amount of around €30 billion, was the trigger that caused the banks to decide to divest their portfolios on a mass scale.

Since that operation was ratified at the beginning of this year, to date, the banks have divested more than €62 billion in problem assets. That amount includes BBVA’s operation with Cerberus, the fund to which it sold €13 billion. Nevertheless, that operation is still pending approval from the Deposit Guarantee Fund (FGD) since some of it forms part of the Asset Protection Scheme (EPA), having proceeded from the former savings bank Unnim.

Financial sources maintain that there are currently operations underway amounting to another €21 billion, plus an addition €8 billion that may be closed over the coming months. The largest include the sale of around €11 billion in assets from Sabadell (of which €900 million has already been sold to Axactor), whose sale is scheduled for this month.

To these figures another €30 billion gross may be added from the sale of a Sareb portfolio this year if Pedro Sánchez’s Government approves that potential operation in the end. Santander has also put up for sale another €6 billion.

Original story: Cinco Días (by Ángeles Gonzalo Alconada)

Translation: Carmel Drake

Santander Wants To Sell RE Assets Worth €6,000M In 1 Year

30 October 2017 – Voz Pópuli

Banco Santander does not want to stand idly by following the sale of Banco Popular’s real estate. After the completion of that operation (the largest ever real estate transfer in Spain), the entity chaired by Ana Botín wants to continue accelerating its real estate clean up. In this way, it plans to reduce its real estate exposure by more than €6,000 million over the next year.

That would mean that Santander’s real estate balance would decrease by half, given that it currently amounts to around €12,300 million in gross terms (excluding provisions).

According to the bank’s CEO, José Antonio Álvarez, speaking at the results presentation, the objective is for the entity’s real estate exposure “to be immaterial” by the end of 2018.

This immateriality means having a net balance of between €1,000 million and €2,000 million left on the balance sheet within 14 months, besides the rental properties, explained the banker. That, in turn, means selling around €6,000 million (in gross terms) and leaving around €6,000 million on the balance sheet.

The numbers

In this way, Santander España’s net exposure to the real estate market is €5,900 million. The entity has an average coverage ratio of 52% over these assets, which means that their gross value is €12,300 million.

Of those €5,900 million, €3,372 million are foreclosed assets, €1,203 million are rental properties and €1,325 million are delinquent real estate loans.

In August, Santander agreed to transfer almost €30,000 million (in gross terms) of Popular’s property to Blackstone. Specifically, the bank sold 51% of a new real estate company, for €5,100 million and retained ownership of the remaining stake.

In terms of the rest of the real estate assets on its balance sheet, Santander could undertake similar operations, although it will also continue to analyse sales through the retail network and the option of putting properties on the market through Socimis. Both the Spanish bank and its competitors are under pressure from the ECB to get rid of the real estate on their balance sheets as soon as possible.

Meanwhile, Santander is negotiating with Värde Partners, owner of 51% of WiZink, to repurchase Banco Popular’s customer card business and to sell it Barclays and Citi’s business in return.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Tinsa: Residential Land Prices Rose By 4.1% In Málaga In Q2

17 July 2017 – Diario Sur

The housing sector in Málaga is continuing to grow. The price of residential land in the province rose by 4.1% during the second quarter of this year compared to the same period last year, to reach €1,399/m2, which is €154/m2 higher than the national average, according to data from the appraisal company Tinsa. It represented the highest increase in Andalucía and the sixth highest in Spain as a whole; and it consolidates the upward trend seen over the last two years, a situation that has generated concerns about the possibility that the sector is heading towards a new real estate bubble.

The Director General of the Institute of Business Practice (IPE), José Antonio Pérez, said that, for the time being, the growth is “sustainable”, although he warned that the lack of buildable land on the Costa del Sol to meet the current demand from property developers and investors will limit this trend and may lead to a disproportionate rise in prices in some enclaves. Pérez attributes the lack of supply to “restrictions” imposed by the general urban planning orders in certain municipalities and the slow pace of urban planning procedures. (…).

Tinsa’s report also reveals that the average mortgage granted to Malagan households amounts to €126,815, the seventh most expensive in the country, with a monthly instalment of €592. The percentage of household income spent on paying the first year of a mortgage is 27.6%, almost eight points above the national average (19.9%). The appraisal company highlights that this statistic makes Málaga the province where families spend the highest percentage of their income on mortgage repayments, above the Balearic Islands and Barcelona (21%).

Málaga also leads the list of provinces with the highest number of house sales closed in the last four months, with respect to the size of its housing stock: 32.1 for every 1,000 homes. It was followed by Alicante and the Balearic Islands, which also have “a clear tourist component”, said the report. The appraisal company reminds its readers that the province is home to “a large number of high-end homes” aimed primarily at foreign buyers, which put upward pressure on average house prices.

By contrast, the IPE considers that it is “a mistake” to draw conclusions at the provincial level “because you cannot compare the situation in Villanueva del Trabuco, for example, with that of Marbella”. The institute, which specialises in the real estate sector, highlighted the sea fronts and golden triangle formed by Marbella, Estepona and Benahavís as the areas where demand for residential land is highest, as well as the capital, where Limonar and Valle del Guadalhorce are positioning themselves as the new enclaves for future urban development.

House sales

The Real Estate Pulsometer compiled by IPE confirms that Málaga is seeing one of the strongest recoveries in the sector, together with Madrid, Barcelona and the Balearic Islands. Investors, savers, funds and individuals comprise current demand, which caused house sales to grow by 6% last year; and a similar rise is forecast this year. Currently, half of all purchases are paid for in cash and the other half are financed through mortgages (…).

Original story: Diario Sur (by Alberto Gómez)

Translation: Carmel Drake

Fotocasa: Rental Prices Rose by 1.7% In January

24 February 2017 – Expansión

The price of rental housing in Spain rose by 1.7% in January to €7.61/m2/month, according to data from the real estate portal Fotocasa. This figure represented the most pronounced monthly increase since December 2007, when prices rose by 1.8% with respect to the previous month.

In addition, the price of rental properties increased by 7.9% YoY with respect to the same month in 2016. This data also represents a record, in line with the monthly one, given that it represents the largest YoY rise since 2007.

“The rental market is experiencing significant tensions in terms of prices as a result of greater pressure on demand, given that despite the reopening of the credit tap by banking institutions, many Spaniards are unable to access financing and are being forced to seek refuge in rental properties as their only means of accessing a home”, said Beatriz Toribio, Head of Research at Fotocasa.

Ten autonomous regions saw increases in their rental prices, with rises ranging from 1.7% in Cataluña to 0.2% in the Community of Valencia. By contrast, seven autonomous regions saw decreases in their rental prices in January. The decreases ranged from -0.4% in Castilla y León to -1.5% in La Rioja.

Barcelona is the most expensive city

The most expensive city to rent a home in January was Barcelona at €15.25/m2/month after prices rose there by 13% YoY. It was followed by Ibiza (€13.81/m2/month), Sant Cugat del Vallès (€13.47/m2/month), San Sebastián (€13.15/m2/month) and Sitges (€13.06/m2/month).

At the other end of the spectrum were Lucena in Córdoba (€3.35/m2/month), Fuensalida in Toledo (€3.40 /m2) and Almendralejo en Badajoz (€3.42/m2/month), as the cheapest towns in Spain to rent a home.

Original story: Expansión

Translation: Carmel Drake

Socimis: Spain’s Political Uncertainty Is Starting To Affect Investors

29 May 2015 – El Economista

The sector is hoping that the fear will pass and the uncertainty will come to an end soon.

Just two weeks ago, the real estate sector claimed that the emergence of new political parties in Spain would not affect the volume of investment. However, that perception has changed following the recent elections.

The current political uncertainty is palpable and the players in the sector fear that investment in property is stalling. The main Spanish Socimis are already detecting reluctance from investors, based on the views they shared at a forum organised by Deloitte. Moreover, the CEO of Merlín, Ismael Clemente, warned yesterday that companies issuing bonds will do so in poorer conditions from now on.

The fears

According to sources consulted by this newspaper, the sector fears that funds “will suspend the plans they had for Spain until after the general election”, or that they will have a complete change of heart and choose to focus on other markets.

Nevertheless, there is another side to the coin and that is that the funds may play their cards so as to push down prices  in the face of so much “uncertainty”. That is the word that has been repeated time and again in the sector over the last few days, but everyone is hoping that the “fear will soon pass”.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake