Tag: price rises

Housing: Which Provinces Offer The Most Attractive Returns?

23 May 2017 – Expansión

Madrid, Barcelona, the Costa del Sol and the Balearic Islands clearly stand out as the most attractive areas.

The Spanish real estate market is enjoying a sweet moment once again. The average price of a home in the country rose by 2% in April with respect to the same month a year ago, which means that so far in 2017, prices have risen by 5% with respect to December 2016, which saw the third consecutive annual rise.

And the outlook for the future is more than promising: Samuel Población, National Director of Residential and Land at CBRE, explains that on average in Spain, price increases of between 4% and 5% are expected, and those percentages will be more marked in Madrid and Barcelona, where increases of around 10% are predicted.

In the case of yields, the panorama is similar. The net return on a rental home (the rate that includes the increase in the price of a home over 12 months as well as the return from renting it out during the same period) now amounts to 8.8% in Spain. On average, rentals in Spain generate returns of between 4.5% and 6% (excluding the impact of capital appreciation), according to Ignacio de la Torre, Partner and Co-Head of the Capital Markets team (at Arcano).

However, the figures reveal that the real estate market is not experiencing a similar boom across the whole of Spain. The best areas for investing in housing are Madrid, Barcelona and their respective suburbs, as well as Málaga and the Costa del Sol, the Balearic Islands and Alicante. Valencia, influenced by the latter, is also recovering and in Valladolid, Zaragoza and A Coruña, we are starting to see signs of improvement, according to José Luis Ruiz Bartolomé, Managing Partner at Chamberí AM.

In Madrid and Barcelona, house prices are rising due to an increase in demand in the context of limited supply, given that the construction of new housing is still a long way below the levels that the country can absorb. 60,000 homes are currently being constructed in Spain, compared to the 150,000 that the economy is capable of digesting.

Typical buyer profiles

The profile of a typical buyer in the city is a family with children and a stable income. They are looking for a home with between three and four bedrooms, measuring between 110 m2 and 140 m2. In the case of investors, they tend to buy properties with 2-3 bedrooms, according to Población. On the other hand, the average tenant is a young person, without children, who does not take out a mortgage either due to a lack of stable employment or because of the effect of the rental culture that is starting to spread amongst the new generations.

Jesús Martí, real estate analyst at Invermax, added that buyers, and above all renters, are increasingly focused on the proximity of their future home to their place of work when it comes to deciding where to live.

The profile of a typical buyer on the coast is a foreign investor. Ignacio de la Torre, Chief Economist at Arcano, says that 15% of the total market for house sales in Spain involve buyers from overseas and that percentage increases to 30% in the case of Málaga.

When it comes to choosing a property for investment, the experts advise buyers to not get carried away by apparent bargains. It could be that the sales price of a property seems cheap, but in that case, it will probably also be hard to generate stable rental income from it.

It is worth considering that just one month’s delay in the payment of rent by a tenant can significantly harm the profitability objectives of a property.

Original story: Expansión (by R. Martínez)

Translation: Carmel Drake

Tinsa: House Prices Rose By 5.5% In Large Cities In March

19 April 2017 – Expansión

The latest statistics confirm the continuation of the good vibe in the housing market, which is advancing at cruising speed thanks to the boost from large cities. Last week, the appraisal company Tinsa reported that the average appraisal value of residential properties experienced a YoY increase of 2.7% in March.

The YoY price rise amounted to 5.5% in large cities, which account for 40.8% of the market, according to the weighting that Tinsa applies to calculate the statistics. Major cities saw their positive evolutions accelerate in March. Although the average price in January was 1.5% higher than at the end of 2016, the increase during the first three months of the year amounted to 3.5%, thanks to the fact that the rise in March was 2.2 points higher than in February.

Once again, the most marked price increases were recorded in the Balearic and Canary Islands: up by 7% on average. In both cases, the increase in demand for holiday homes and in purchases made by overseas investors, are spurring on the recovery in the real estate sector.

Something similar is happening on the Mediterranean Coast, which saw prices rise by 1.9% YoY, despite the huge surplus of new unsold properties in certain provinces in the region, above all in Castellón.

The cities and the coast are the two segments where the housing market has performed the best traditionally, due to the high level of demand. In the case of provincial capitals, due to the creation of new households and, above all, the marked increase in purchases made by investors. Those two variables, combined with the strong rise in the rental market, mean that Madrid and Barcelona are continuing in their role as the real engines of the housing market.

In aggregate terms, the residential market is following the positive trend with which it started the year. The growth of 2.7% is almost one point above the figure recorded in February (1.8%). These increases are in line with Tinsa’s forecasts for 2017. The Head of Research at the appraisal company, Jorge Ripoll, revealed his predictions: growth will be almost flat this year, “ranging between 0.1% and 2%”. This is a moderate estimate, compared to those published by other analysts. Overall, the consensus amounts to around 5%.

The other two real estate sub-markets analysed by Tinsa experienced a YoY decrease in prices in March. The metropolitan areas and “other municipalities” saw reductions of -0.5% and -0.6%, respectively, over the last 12 months.

“During the first quarter alone (January, February and March), average prices in Spain rose by 3.2%”, according to Tinsa’s report. “The cumulative decrease since the peaks of 2007 now stands at 39.4%”. In other words, it has fallen below 40% for the first time since June 2014.

The largest decrease in prices since the peaks of 2007 was recorded on the Mediterranean Coast (down by 45.5%), followed by metropolitan areas (-44%) and then the provincial capitals and large cities (-42.1%). In the Balearic and Canary Islands, where historically, prices have decreased by the least, the cumulative reduction amounts to 24.2%.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

Knight Frank: UHNWIs Invest In Spanish RE Again

30 March 2017 – El Mundo

The large fortunes are looking towards Spain once more as a destination for their real estate investments. Political stability, rising prices and high returns mean that it is now ranked as the sixth most attractive country for ultra-rich people or UHNWIs (ultra-high-net-worth individuals), in other words, those whose wealth exceeds $30 million (around €27.7 million), excluding their habitual residence.

It is the first time that Spain has reached the ranking’s top ten. The list has been compiled for the last ten years by the real estate consultancy Knight Frank as part of its “Wealth Report 2017”. The United Kingdom, the United States and Germany lead the classification, which is prepared on the basis of a survey of the individuals themselves.

According to the data, real estate investment in Spain amounted to €8,300 million in 2016, of which more than €1,200 million – almost 15% compared to 12% the previous year – came from private investors.

Legal certainty and the stability that economic growth has shown in recent quarters have been decisive in attracting new UHNWIs, according to Carlos Zamora, Director of the company’s Business Space.

The residential sector is still the market of choice, accounting for 36% of all private investment. (…).

The PIRI index

The price of luxury homes rose by 3% in the Spanish capital last year, in other words, by half as much as in Barcelona (where prices increased by 6.6%). An increase in the supply of new luxury properties contained the price rises in Madrid and, by contrast, generated upwards pressure in the Catalan capital.

Both cities form part of the PIRI index, which is presented in the report and which monitors house prices in the 100 largest luxury home markets in the world. Other locations in Spain include Ibiza, Marbella and Mallorca; the indexis led by Shanghai, Beijing and Guangzhou with y.o.y growth rates of more than 26%. Monaco is still the most expensive city per square metre in the world. By way of example, the consultancy firm points out that with $1 million, an investor can buy 17 m2 in Monaco, 20 m2 in Hong Kong, 55 m2 in Paris and 134 m2 in Madrid.

Another trend that has been detected is that investors have become more demanding, which has led to the sophistication of supply: luxury is still luxury, but now that also includes characteristics and services that set them apart from their peers.

Segments

Residential is the segment that sparks the most interest amongst investors, although, in recent years, the tertiary sector has gradually been gaining prominence too, including offices, retail, logistics assets and hotels.

In this context, flagship stores are also in demand, in emerging and established shopping areas alike, with a dual purpose: to be located in areas that facilitate their operation and to reinforce their brand images. The recent opening of the Mango megastore on Calle Serrano in Madrid and the inauguration on Paseo de Gràcia in Barcelona of the largest H&M store in Spain are both examples of this. (…).

Original story: El Mundo (by María Hernánez)

Translation: Carmel Drake

IPE: Málaga’s Land Shortage Will Drive Up House Prices

29 March 2017 – La Opinión de Málaga

During 2017, the Malagan real estate market is expected to continue along the path to recovery that it began two years ago, however, the lack of available buildable land along the Costa del Sol to meet current demand from developers and investors looks set to limit the growth of the sector. That is according to the

That is according to the Institute of Business Practice (IPE), which presented the 24th edition of its Real Estate Pulsimeter for Málaga last week. It warned that this lack of available buildable land in certain municipalities could result in the future effect of a rise in house prices in certain enclaves. In fact, the Director of the IPE’s Real Estate Practice, José Antonio Pérez (pictured above), said that this “new bubble” is already being seen in some parts of the Costa del Sol.

“There is more demand than available supply and if we do not resolve that mismatch, we will see prices rise again. The main problem is the lack of buildable land, understood as land that is suitable for the presentation of plans and for obtaining a licence. (…)”, he said.

In his opinion, the lack of available supply is due, on the one hand, to the “restrictions” imposed by the PGOU and the slowness of the urban planning procedure in certain towns compared to others, and, on the other hand, to the fact that some of these plots of land are owned by individuals and investment funds that are not interested in developing them, for the time being at least. Pérez pointed out that Sareb still owns lots of plots of land that it took over from financial entities, which are “clogging up the market”, despite the fact that the bad bank is working as fast as it can to find an exit from those assets.

As part of this trend, the IPE made reference to the special role being played by the so-called “golden triangle” of the Costa del Sol, which comprises the areas of Marbella west, Benahavís south and Estepona east. There, “the price of buildable land is doubling, products that suit the needs of solvent clients are running out and financial competition between landowners is becoming speculative and monopolistic”. Pérez also explained that, given the lack of available land along the west coast, investors are also starting to look for sites to develop along the east coast.

Málaga leads the way

The figures from the Real Estate Pulsimeter (….) confirm (…) that Málaga is one of the most important areas in terms of the recovery of the sector. (…).

House sales grew by 6% (in Málaga) in 2016 to reach a total of almost 26,200; and the IPE forecasts a similar increase for 2017, which would take the figure to around 27,700. Currently, c. 50% of purchases are paid for in cash and the other half are financed through mortgages, which gives us an idea of the importance of foreign buyers and investors here, as they are the main people who can acquire properties without having to resort to financing.

“Malaga’s position of leadership in the real estate sector is also reflected when we draw comparisons between Spain, Andalucía and Málaga with respect to the growth in the number of housing permits granted in 2016 vs. 2015 – the figure grew by 35% in Málaga, and by 20% and 16.9% in Spain and Andalucía, respectively. Something similar happened with the growth in the number of new homes started – Spain, with growth of 33% in 2016 vs 2015, was a long way below the rate of growth in Málaga (54%)”, says the IPE. (…).

Original story: La Opinión de Málaga (by José Vicente Rodríguez)

Translation: Carmel Drake

Ministry Of Development: House Prices Rose By 1.5% In 2016

24 February 2017 – ABC

The average price of private (unsubsidised) housing amounted to €1,512/m2 in the fourth quarter of 2016, representing a YoY increase of 1.5%. As such, the indicator recorded seven consecutive months of rises, according to data published yesterday by the Ministry of Development.

According to the same source, prices rose by 0.8% in Q4 compared to the third quarter of 2016.

Nevertheless, house prices are still well below their peaks of the first quarter of 2008 (-28% lower). On the other hand, prices have now recorded a cumulative increase of 3.4% since their minimum values, recorded in the third quarter of 2014.

In real terms (excluding inflation), between October and December last year, house prices in Spain rose by 0.5% with respect to the same quarter in 2015 (to record nine consecutive quarters of increases), according to the Ministry of Development, which added that we are now seeing a slowdown in the growth rate in real terms due to an increase in CPI.

In the case of new homes (those aged less than five years old), prices rose by 1.5%, to an average of €1,764.2/m2. The price of houses aged more than five years old also rose, by the same percentage, to an average price of €1,503.6/m2.

Meanwhile, house prices rose in nine of Spain’s autonomous regions led by Madrid (4.8%), Cataluña (4.4%) and the Canary Islands (3.8%). The most significant decreases were recorded in Navarra (2.8%), Murcia (2.6%), Castilla y León (1.5%) and Asturias (1.3%).

In towns with more than 25,000 inhabitants, the highest absolute house prices were recorded in San Sebastián (€3,059.8/m2), Barcelona (€2,822.1/m2), Sant Cugat del Vallès (Barcelona) (€2,779.2/m2), Ibiza (€2,772.4/m2), Getxo (Vizcaya) (€2,681.9/m2), Santa Eulalia del Río (Ibiza) (€2,640.7/m2) and Madrid (€2,628.6/m2).

In smaller towns, the most expensive homes were sold in Ontinyent (Valencia) (€522.7/m2), Elda (Alicante) (€540.6/m2), Alcoy (Alicante) (€552/m2), Jumilla (Murcia) (€552.9/m2), Villena (Alicante) (€560.4/m2) and Novelda (Alicante)(€573.8/m2).

Finally, the average price of social housing amounted to €1,124.30/m2 during the fourth quarter of 2016, representing a rise of 2.6% with respect to the same period in the previous year.

Original story: ABC

Translation: Carmel Drake

Airbnb, HomeAway & Wimdu Outperform Traditional Long-Term Lets

23 February 2017 – El Confidencial

Traditional rental agreements (…), which are governed in Spain by the Urban Rental Act (LAU) and which allow a tenant to live in a home for an extended period of time, are starting to become scarce in some very specific areas of large cities such as Madrid and Barcelona. They are falling victim to the unstoppable progress of so-called tourist apartments or short-stay lets (available on a daily, weekly or monthly basis), which have grown like wildfire in recent years, thanks to the development of platforms such as Airbnb, HomeAway, Wimdu, Niumba, Rentalia and Booking.

Users consider that these assets offer a much more flexible and economic alternative than the product offered by the hotel sector. Meanwhile, homeowners have found a business niche and are generating extra income both from their own homes and from properties acquired as investments. Moreover, their yields are ranging between 4% and 8%, which is well above those offered by other traditional investment products at the moment, including traditional rental properties.

To give us an idea of the volumes being handled by these types of platforms, Airbnb has 13,000 online adverts in the city of Madrid, whilst Idealista has 8,700 adverts for rental homes. In Barcelona, the online platform has 20,000 adverts compared with 6,400 on the real estate portal.

Nevertheless, the problem is limited to very specific locations, such as Malasaña and Chueca in Madrid and Las Ramblas and El L’Eixample in Barcelona. There it is almost impossible to find a long-term rental home. As such, the few products that do come onto the market are leased in a matter of hours and at much higher prices than they were just a couple of years ago. (…).

Rental prices in Malasaña now rarely fall below €800 for a one-bedroom flat measuring just 40m2, but on average, homes there cost between €1,200 and €1,300 per month. On the real estate portal Idealista, there are a few 60m2 flats for rent, for which the owners are asking €2,700/month and even €3,500/month for luxury properties.

Emergence of individual investors

Airbnb defends the “home-sharing” concept, saying that it does not remove available housing from the market because people who live in these homes are still around, they are just sharing their primary residences. Some of these people are using the money to pay for their housing costs”, says the platform. “Studies have been carried out in several cities around the world, showing that the number of homes advertised on Airbnb for exclusively professional use is too low to have any impact on the housing market”.

Nevertheless, the high returns offered by tourist apartments have led many individuals and small-time investors to buy homes in these areas, to subsequently sell them or rent them to tourists. Specifically, individual investors are behind 3 out of every 10 house sales in Madrid, according to data from Tecnocasa. (…).

A very localised phenomenon

What is happening in Malasaña is also being seen on some other very specific streets both in Madrid and Barcelona, where rental prices have really soared. According to Urban Data Analytics, rental prices have risen by more than 20% in neighbourhoods such as Sant Andreu and Sants-Montjuïc, and by 15% in areas such as Gràcia, where prices decreased slightly during the crisis. (…).

According to Bankinter, in its latest report about the Spanish residential sector, these price increases will not last forever. “In our opinion, these double-digit increases, which are driven by a shortage of supply and the boom in tourist rentals, will not last in the long term, nor will they spread to the market as a whole, especially if new legislation is introduced to limit the number of tourist homes a given owner may rent out”.

Sources at Airbnb insist that “The increases in house and rental prices are due to normal factors at play in the real estate market, including: the high demand to live in cities, the appeal of real estate as investment property, the lack of space to build new developments…also, the pressure on house prices is not just being seen in Barcelona, it is happening in all of the large cities around the world (….). House prices were rising before Airbnb ever existed (…)”.

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

Sabadell Still Struggling To Digest CAM’s RE

30 January 2017 – El Mundo

Real estate is continuing to weigh down heavily on Banco Sabadell’s balance sheet, above all due to the complications involved in digesting the enormous portfolio of properties that it inherited from CAM, most of which are located in the Community of Valencia. The entity is selling more properties than ever, its revenues have soared, the number of assets being sold exceeds the number of properties being foreclosed and the prices at which it is selling its real estate are continuing to rise, however, the overall impact of the initiative is still generating losses, albeit for the time being. Specifically, Sabadell’s real estate asset business unit lost €908.4 million in 2016, according to the Group’s annual results, which were presented in Barcelona on Friday.

Those losses already reflect the effect of the Asset Protection Scheme (EPA), which the entity relies on to cover 80% of the losses generated by CAM’s real estate portfolio.

The Catalan bank still holds €9,035 million in real estate assets on its balance sheet, which represents just 2% less than at the end of 2015. Most of those properties (land, buildings, homes etc) belong to the stock of loans that it inherited from CAM and are located in that former entity’s areas of operation, in other words, the Community of Valencia and Murcia. Of those €9,035 million real estate assets, €7,166 million stem from foreclosed assets and embargos of construction companies and property developers, which were unable to repay their loans, and of those €3,851 million corresponds to land. In other words, 42% of the entity’s stock is land, the least liquid asset.

Sabadell owns finished homes worth €1,377 million. Moreover, its properties from unpaid mortgages amount to €1,918 million.

Overall, the bank has managed to offset the mass entry of properties onto its balance sheet with an intensification of sales. For example, it closed 2016 with the entry of properties (homes, land, premises, etc) worth €384 million, whilst the sale and divestment of these assets amounted to €457 million. In other words, it is now selling more than it is taking on.

Solvia is working hard too

In addition, Solvia, the bank’s real estate subsidiary, which has its operations centre in Alicante, sold assets worth €1,557 million last year, up by 40% compared to the previous year, with 14,553 operations, i.e. 27% more. The entity said that “the reduction in the sales discount and the overall increase in prices are signs of the recovery”. Last year, Solvia relied on sales of large asset portfolios to institutional investors to improve its ratios. Not in vain, 22% of its sales are made to that kind of buyer. (…).

Original story: El Mundo (by F.D.G.)

Translation: Carmel Drake

Idealista: Rental Prices Rose By 15.9% In 2016

17 January 2017 – Expansión

The price of rental housing underwent a recovery in Spain in 2016, ending the year 15.9% higher than it started it, taking the price per m2 to €8.2/m2/month. The rate of growth accelerated during the last month of the year, as prices increased by 8.2%.

Fernando Encinar, Head of Research at Idealista, said that “this is not a bubble but rather a significant increase in demand from Spaniards to rent in certain cities.

The Director of Idealista said that to encourage the growth of the rental market “policies to revitalise the sector must continue and new measures must be adopted to help to increase the housing stock”.

By autonomous region

All of the autonomous regions saw higher prices than a year ago. The largest increase was observed in Cataluña, where owners are now demanding 26.8% more to lease their homes than a year ago. It was followed by increases in Madrid (18%) and the Balearic Islands (13.8%).

Cataluña (€13.30/m2/month) also became the most expensive autonomous region. It was followed by Madrid (€12.90/m2/month) and Euskadi (€10.40/m2/month). At the opposite end of the spectrum, we find Extremadura (€4.1/m2/month), Castilla La Mancha (€4.5/m2/month) and Murcia (€5/m2/month), the cheapest autonomous regions.

By provincial capital

Valencia is the capital where rental prices grew by the most in 2016, with an increase of 20.3%, to €7.5/m2/month.

The increase recorded in San Sebastián was also noteworthy, with prices up by 17%, followed by Barcelona (16.5%) and Madrid (15.6%), which have returned to their historical peaks.

Barcelona consolidated its position as the most expensive Spanish capital (€17.9/m2/month), followed by Madrid (€14.4/m2/month) and San Sebastián (€13.6/m2/month). At the opposite end of the table, we have Lugo (€4.1/m2/month), and Ourense and Ávila (€4.3/m2/month in both cases), the cheapest provincial capitals.

Original story: Expansión (by Rubén San Isidoro)

Translation: Carmel Drake

The Housing Market Recovery Will Strengthen In 2017

9 January 2017 – Expansión

Expansión interviews a panel of real estate experts / Analysts expect house prices to rise by around 5% on average in 2017, but that figure is likely to be even higher in the large cities. Moreover, sales will grow at a higher rate than prices, even though the comparison will be performed against 2016, when around 400,000 transaction were completed. (…).

The property sector started to reverse its negative trend in 2014; it really emerged from the darkness in 2015; and the improvement started to be felt across the country in 2016, albeit in the shadow of the political paralysis. For this reason, and with the macroeconomic improvement to boot, 2017 is set to be the year in which the real estate recovery finally takes hold. The consensus of the experts consulted by Expansión is that house prices will rise moderately, by around 5% during 2017; sales will increase by even more – around 10%; and mortgage lending will flow a lot better than last year. All of this provided that interest rates do not rise.

The reasons for this realistic optimism are primarily macroeconomic. The increase in employment (above all), the growth in GDP, the improvement in consumer confidence – a more important indicator for the real estate sector than many people think – and the gradual opening of the mortgage tap are juxtaposed in a virtuous way for property, which will not only become attractive again for those looking to reposition themselves on the property ladder, but which has also become a major focus of returns for investors. At the same time, there is still some uncertainty hanging over this recovery. For example, the scarcity in terms of the demand for new households.

In this context of a “slow, moderate but constant recovery”, as defined by Beatriz Toribio, Head of Research at Fotocasa, house prices will definitely rise, but not very significantly, according to all of the experts that have responded to our survey.

For example, Aguirre Newman estimates “price growth of around 6% for new and second-hand homes”, according to Juan Riestra, Director of the Residential Division at the real estate consultancy. Maurice Kelly, Director of the Residential area at JLL, thinks that established areas, such as the centres of major cities and exclusive locations along the coast will see “increases of more than 6%”.

Almost all of the forecasts indicate price rises of around 5% and highlight the disparity between the different real estate markets around the country. (…).

José Luis Ruiz Bartolomé, Managing Partner at the consultancy Chamberí AM, notes that “prices will rise by around 5%…” but adds a new and different perspective: “These price rises will not be driven by the central districts of Madrid and Barcelona (like until now), but rather by the more peripheral regions and other cities that have not been performing particularly well so far”.

Moreover, not all of the analysts agree with the forecast of 5%. Jorge Ripoll, Director of Research at Tinsa, thinks that the increase will be less marked, ranging between 0.1% and 2%. (…).

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

ST: New Home Prices Rose In Every Regional Capital In 2016

4 January 2017 – Expansión

According to Sociedad de Tasación, the price of new homes rose by 3.3% in 2016. It is the largest increase recorded since 2007 when, at the height of the real estate bubble, they rose by 5.1%. The price of new homes rose in every provincial capital and, for the first time since the crisis, “the rising trend was completely generalised”. Nevertheless, the price rises were moderate in almost every city. They only really stood out in Barcelona, with an increase of 6% and in Madrid, with a rise of 4.9%. Both cities continue to be the engines of growth in the sector.

The average price of new homes in Spain’s provincial capitals amounted to €2,120/m2 in December 2016 (up by 1.9% compared to the previous half year). The value of a typical 90. m2 home in the provincial capitals rose to €190,800. In other cities that are not provincial capitals, the average price of new homes amounted to €1,555/m2 in December, down by 26.6%.

“We think that 2016 was the year during which prices bottomed out, the cycle changed and the sector moved from stability to recovery, supported by price increases, transactions, the reactivation of off-plan house sales, the granting of mortgages and a decrease in the default rate. That makes us think that 2017 could be a good year for the real estate sector”, said Juan Fernández Aceytuno, Director General at Sociedad de Tasación.

Although all of the capital cities have left their losses behind, we are still seeing a two speed recovery in the residential sector. On the one hand, we have the large centres of demand and the tourist areas. On the other hand, we have the areas with the highest volumes of surplus new homes for sale, which still have several years of property digestion activity ahead of them. (…).

More confidence

The index of confidence in the evolution of the real estate sector that Sociedad de Tasación compiles stands at 54.5 points and is continuing to rise from its neutral position of 50. This means that the indicator has grown by 10 points in two years, from 44.5 at the end of 2014. La Rioja (57.9), the Balearic Islands (57.9) and Madrid (56.9) have the highest confidence indices. Castilla-La Mancha (50.9), Castilla y León (50.8) and País Vasco (49.3) have the lowest.

Meanwhile, the appraisal company’s real estate effort index amounts to 7.4 years salary for the acquisition of an average home. The Balearic Islands is once again the autonomous region where buyers need the longest time to acquire a home – 15.8 years – and La Rioja the region where buyers take the least time – 4.6 years.

Most buyers are not new households, but demand is being nourished, above all, “from investors, in particular from people looking to buy to rent or reposition themselves”, according to the Director General of the appraisal company. As such, “the challenge is to analyse in detail the demand and understand why the cohort that makes up the sociodemographic profile aged between 25 and 35 years are not buying homes at the moment”, says Fernández Aceytuno. “It may be due to job instability, wages, geographic mobility, sociodemographic changes…but really, it is more important that we analyse who are not buying homes than who is”, he added.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake