Ministry Of Development: House Prices Rise For First Time Since 2008

27 February 2015 – El Correo

House prices rose by 0.5% in the last quarter of 2014; and the average price per square metre amounted to €1,463.1.

Average house prices increased by 0.5% in the last quarter of 2014, the first quarterly increase since the beginning of 2008, the year in which the crisis began. Meanwhile, the average price per square metre amounted to €1,463.10, according to reports from the Ministry of Development.

Despite the quarterly increase, house prices closed the year (2014) with an inter-annual decrease of 0.3%; although this percentage was negative, it was more moderate than the -4.2% recorded in 2013.

In this way, house prices recorded seven consecutive years of decline, during which time the cumulative decrease from the peak prices recorded in 2008 amounts to 30.4%. In real terms, after accounting for the variation in CPI, this decrease rises to 36.9%.

Also, despite the slight quarterly increase, the average price per square metre was still at similar levels to those recorded at the beginning of 2014.

By type of property, both new builds and second-hand homes ended 2014 with price increases. Homes that were less than two years old became 1.2% more expensive, to reach €1,517 per square metre, and second-hand homes rose by 0.2% to €1,441 per square metre.

In the subsidised housing segment (vivienda protegida or VPO), the price per square metre amounted to €1,099.90 in the fourth quarter of 2014, representing a year-on-year decrease of 0.3% and an inter-quarter increase of 0.2%.

In this way, the general price index registered a rise of 0.3% between October and December last year, with respect to the previous three months and a year-on-year decrease of 0.3%. With this year-on-year decline, the general price index has now recorded 25 cumulative quarters of negative growth.

Prices decreased the most in Asturias and Navarra

By autonomous region, five regions experienced year-on-year increases in the price of (unsubsidised) homes: Cantabria (+3.6%), the Balearic Islands (+2.4%), the Canary Islands (+1%), Valencia (+0.6%) and Madrid (+0.5%).

By contrast, the largest year-on-year decreases were recorded in Asturias (-5.2%), Navarra (-4.2%), Castilla y León (-3.7%), Castilla-La Mancha (-3.1%) and Galicia (-2.8%).

In terms of towns with more than 25,000 inhabitants, the highest prices per square metre were found in San Sebastián (€3,117/m2), Getxo (€2,696.40/m2), Calvià (€2,526/m2), Alcobendas (€2,477.2/m2), Pozuelo de Alarcón (€2,471.6/m2), Barcelona (€2,416.3/m2) and Majadahonda (€2,399.7/m2).

The lowest prices in towns with more than 25,000 inhabitants were recorded in Elda (€557.3/m2), Crevillent (€597.3/m2), Tomelloso (€600.8/m2), Jumilla (€605.2/m2), Ontinyent (€606.7/m2), Villarrobledo (€609.6/m2) and Hellín (€618.5/m2).

Original story: El Correo

Translation: Carmel Drake

Notaries: House Sales Increased & Prices Stabilised In 2014

17 February 2015 – El Economista

House sales grew by 19.1% to 364,601 transactions in 2014 with respect to 2013, a year of minimal activity in the sector, according to the latest statistics from the General Council of Notaries (el Consejo General del Notariado).

So, whilst this rise in the number of transactions should be assessed from that perspective, the statistics reflect the fact that prices have turned the corner on the negative trend observed during the crisis and are growing again, albeit by only 0.1%.

The notaries explain that “last year the real estate market was marked by the stabilisation of monthly figures, in terms of both quantities and prices”.

Increase in sales

In detail, the increase in sales is more evident in the case of single-family homes, a segment that grew by 26.8% to 74,160, versus the 17.3% increase in the sale of flats, although more flats were sold in absolute terms (290,441 transactions).

In the case of the latter, second-hand sales increased by 23.5% to 234,748 transactions, versus an increase of 9.6% in the sale of new flats (39,306).

Prices increase slightly

In terms of the price per square metre, the average value of homes purchased in 2014 was €1,251 (+0.1%). This increase was primarily due to the increase in the value of flats (+1.4%), since the price per square metre of single-family homes fell by 2.7%.

Similarly, sales of second hand properties are driving the sector. The price of used flats increased by 2.4%, whilst the price of new flats remained unchanged.

Finally, 94,586 transactions involving other properties were recorded last year, of which 38.4% related to land or plots.

Therefore, the notaries insist that “the gloomy path of the real estate market ended last year, with the market showing signs of stabilisation compared with the same period in 2013” and they add that “during the first few months of 2015, they expect market figures to continue on the path of stabilisation observed in 2014, although values may be more moderate”.

Improved financing

On the other hand, the mortgage market behaved in line with the stabilisation of the real estate sector in 2014. The market closed the year with a 5% year-on-year increase in the number of new loans granted and with an average amount of €137,878, representing an increase of 10.2%.

In the specific case of mortgage loans granted for the purchase of properties, the number of loans granted last year increased by 39.4%. This increase amounted to 42% in the case of house purchases and 15.6% in the case of other properties.

The average capital of the mortgages granted for the acquisition of a property amounted to €124,217, an increase of 6.4%. In the case of loans for house purchases, the average amount was €117,507, an increase of 5.2%.

More loans for developers

The notarial statistics indicate that the number of mortgage loans granted for construction also increased during the course of the year, by 20.2%. This increase was higher in the case of house construction (23.8%).

In terms of the average loan amount, the figure stood at €288,974 for all mortgages loaned for construction, which represented a year-on-year decrease of 3.5%, slightly higher than the reduction recorded in 2013 (-3%).

Finally, the percentage of homes purchased using mortgage financing stood at 37.5% last year. Moreover, for these purchases, the mortgage represented 75.2% of the value of the home, on average.

Original story: El Economista

Translation: Carmel Drake

Madrid: Third Favourite Investment Market In Europe

12 February 2015 – Expansión

PwC Report / The Spanish capital is the third favourite investment market after Berlin and Dublin. The commitments made by George Soros and Dalian Wanda are generating the “pull effect” (in 2015).

The financial investor George Soros, the giant Chinese corporate Dalian Wanda and the new fund manager Tiaa Henderson all have something in common: they have all invested in the Spanish real estate sector in recent months. This activity has not gone unnoticed by other investors, since not only has real estate investment in Spain returned to figures not seen since the boom years (2007), but also the phenomenon is also expected to continue in 2015.

According to the ‘Trends in the European Real Estate Market 2015’ report, prepared by PwC, Madrid is the third favourite destination for investors at the European level, behind Berlin and Dublin. “There is a mixture of 28 cities in this ranking: classic investment destinations such as Berlin and Munich, capitals that are in recovery, such as Athens – the survey was conducted in November before the Greek elections – and Dublin”, explains Rafael Pérez Guerra, the partner responsible for the real estate sector at PwC.

Of the 28 cities studied, only those in Russia have limited prospects for investment growth, even though 61% of respondents believe that the good assets (known as “the core” in the sector) are overvalued in virtually all of the European markets.

This boom has led many investors to seek out new markets. “Another important area of interest are the secondary cities, such as Birmingham, which is ranked in sixth place, above London and Munich. Investors have started to take on more risk because profitability in the large markets is scarce; as a result they are exploring secondary sites”, he adds.

Spain

The change in the Spanish real estate sector is reflected in the rise (up the ranking) of its main markets as investment destinations: Madrid has risen from 19th place to third and Barcelona from 22nd to 13th, according to PwC’s report.

“There is a very high level of interest and activity in Spain. It is not that the market is not over-heating, but rather that the dynamics of the sector are changing, with an imbalance between a scarcity of good deals in prime areas and significant demand from opportunists who remain in the market and more stable investors who are arriving”, says Enrique Used, the partner responsible for transactions in the real estate sector at PwC.

This commitment to the Spanish market will continue in 2015, according to the survey respondents, and will not be limited to the large markets. “International capital has moved towards Spain, en masse. Prices have risen considerably in Madrid, which suggests that the investors that are looking for the highest returns, should set their sights on the secondary markets in Spain during 2015 to obtain higher returns.

Although the 500 people surveyed by PwC see a clear recovery in investment in Spain, they still believe that the market for the construction of new homes should improve; Madrid and Barcelona are ranked only 14th and 23rd, respectively, although that represents an improvement with respect to 2013 when they were ranked 21st and 25th.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake