Tinsa: House Prices Rose By 0.8% In Q4 2016

4 January 2017 – El Mundo

Average house prices in Spain rose by 0.8% during the fourth quarter of the year with respect to the same period in 2015, according to provisional data published in Tinsa’s IMIE Local Market Index. According to the appraisal company, the stabilisation in prices, which is in line with the YoY variation recorded during the third quarter of the year, “reflects micro-market multiples, which are evolving at different speeds”.

The index highlights that Cataluña, which saw an increase of 7.2%, the Community of Madrid (5.2%) and País Vasco (4.3%) continue to be the drivers of the housing market in Spain, followed by the Canary Islands and Andalucía, which saw price rises of 2.8% and 2%, respectively, in terms of YoY variation during Q4.

At the other end of the spectrum, the highest price decreases were recorded in the regions of Murcia (-4.8%), Castilla y León (-3.9%) and the Balearic Islands (-3.1%). Price decreases were also observed in Cantabria (-2.1%), Navarra (-1.9%), Asturias (-1.3%) and Aragón (-0.9%), which closed the year with lower prices than in Q4 2015.

According to Tinsa’s report, homes are now at least 5% more expensive than they were a year ago in up to six provinces. Barcelona (8.4%), Palencia (7.8%) and Guipúzcoa (7.4%) saw the highest price rises over the last year, followed by Málaga (with growth of 6.6%), Madrid and Almería (both of which recorded YoY rises of 5.2%).

By contrast, the provinces of Huelva and Lérida registered decreases of -6.9% and -6.5% over the last year, respectively. The provinces of Orense, León, Murcia and Valladolid are saw prices decreases of more than 4%.

Cities

By provincial capital, house prices rose significantly over the last year in San Sebastián (12.1%), Bilbao (11.6%) and Barcelona (11%), well above the increases recorded in Madrid, Málaga and Palencia, where average prices rose by 6.3%, 5.4% and 5% YoY, respectively.

This evolution contrasts with that recorded by the group of 29 capitals where average prices are lower than they were a year ago, led by León (-11.1%), Murcia (-7.3%), Valladolid (-6.6%) and Lugo (-6.2%).

Tinsa’s detailed analysis of the residential market in Spain’s five largest provincial capitals reveals significant price increases in certain districts of Barcelona, Madrid and Valencia. That was the case in the neighbourhoods of Gràcia and Eixample in Barcelona, where the average price of finished homes rose by 16.5% and 15.1% YoY, respectively.

In Madrid, the highest price rises were concentrated in the areas of Hortaleza (13.4%), Centro (11.9%) and Tetuán (11.4%). (…).

The Barcelona district of Sarriá-Sant Gervasi continued to be the most expensive neighbourhood of the five large capitals analysed, at €3,901/m2, followed by Les Corts (€3,716/m2). In the capital, the neighbourhood of Salamanca, with an average price of €3,645/m2 exceeded prices in Chamberí (€3,562/m2), which saw the highest price rises in the city last quarter.

Rate of sales

According to Tinsa, average sales periods (…) have decreased below 10 months for the first time since this indicator was first compiled in Q2 2015, to 9.9 months across Spain. (…).

Original story: El Mundo

Translation: Carmel Drake

BBVA Forecasts A 10% Increase In House Sales In 2015

4 December 2015 – El Economista

BBVA Research, the financial institution’s research service, says that house sales will grow by 10% in 2015 and that in 2016, the real estate sector will finally leave behind the recession and will consolidate its growth.

Those were the main conclusions drawn by the latest Real Estate Watch Spain report published by BBVA on Thursday, which says that the sector is showing positive signs and that the available data indicates a significant improvement in demand, in an environment characterised by an increase in credit and the stabilisation of prices.

Moreover, the report explains that the scarce supply of new homes coming onto the market is enabling a significant reduction in the existing stock, to the extent that the supply is even running out in the most active markets.

This year is also seeing a significant improvement in the amount of activity undertaken by property developers, says BBVA, which means that in 2015 the residential construction segment is going to positively contribute to GDP for the first time since the start of the crisis.

The report notes that the recovery in demand, initiated in 2014, has strengthened during the course of 2015. In fact, it forecasts that the current year will end with around 400,000 house sales, i.e. an increase of around 10% compared with 2014.

This rate of sales will accelerate during the fourth quarter and the trend will continue into 2016, say the experts at the bank, who highlight that improvements in the fundamentals of demand are driving this trend.

Specifically, it mentions the recovery of the labour market and the increase in household disposable income, the positive developments in the financial markets and the stabilisation of residential prices, the strong performance of house purchases by overseas citizens, and an environment characterised by financial stability with interest rates on mortgages at historical lows.

Prices

Meanwhile, the report sets out that the growth in demand, in the context of a reduction in supply, lends itself to the stabilisation of house prices.

According to BBVA, prices have begun their journey through the recovery phase of a new cycle, a recovery that is currently undergoing a period of stabilisation and one that is happening more slowly than in previous cycles.

By type of asset, the bank observes a similar evolution in terms of both new housing and second-hand housing. Nevertheless, it clarifies that, whilst price decreases have been more intense in the second-hand segment, the recovery has begun more quickly in the new build segment.

Original story: El Economista

Translation: Carmel Drake

Tinsa: House Prices Fell By 2% In July

5 August 2015 – Expansión

According to Tinsa, house prices in July have recorded a cumulative decrease of 41% since 2007.

The decline in house prices moderated to 2% in July, the smallest YoY decrease since May 2008, but recorded a cumulative decrease of 41.5% from the peak figures registered during the last quarter of 2007, according to the Local Markets Index (IMIE) published by Tinsa yesterday.

This data from the appraisal company shows that the residential market is continuing to stabilise, a process that began during the second half of 2013.

The best figures were recorded on the Mediterranean Coast, where the average price increased by 2.8%.

Overall, the residential market showed signs of recovery in almost all areas, with a slight fall of just 0.5% between the end of 2014 and July 2015. Moreover, in three of the five areas analysed, the evolution in prices was positive during the first seven months of the year.

On the Mediterranean Coast, where prices decreased by 47.6% on average during the crisis, prices have increased by 3.8% on average since the end of 2014.

Meanwhile, in the provincial capitals and major cities, as well as in the Balearic and Canary Islands, prices have increased by several tenths so far in 2015: by 0.2% and 0.9%, respectively.

However, with the exception of the Mediterranean Coast, prices have decreased over the last twelve months in the majority of regions.

Average prices in provincial capitals and major cities and in other municipalities in July were 1.8% below their levels in July 2014, on average.

The decrease was more acute in metropolitan areas, which recorded a YoY drop of 4%, and in the Balearic and Canary Islands, where prices decreased by 4.8% compared with a year earlier.

Since 2007, house prices have recorded a cumulative decrease of 41.5% on average in Spain.

The greatest decreases have been registered on the Mediterranean Coast, with a 47.6% decrease, followed by the metropolitan areas and provincial capitals and major cities, which all recorded cumulative declines of 45.1%.

By contrast, the smallest cumulative decreases have been recorded in the Balearic and Canary Islands, with a decline of 30.5% and in other municipalities, where prices have fallen by 36.4%, on average.

Original story: Expansión

Translation: Carmel Drake

Tinsa: House Prices Decreased By 3.67% In February

12 March 2015 – 20 Minutos

House prices have recorded an average cumulative decrease of 42.6% since the end of 2007.

Homes on the Mediterranean Coast have lost more than half their value.

Prices may bottom out in the next few months.

In areas with low demand and significant stock, further price decreases are expected.

A change in the real estate cycle has begun; but since it is a cycle, the changes will not happen overnight. In this way, although prices are now rising in some areas of Spain, in many others, they are still declining and those areas are, for the moment, in the majority.

According to data published by Tinsa, house prices fell by 3.67% in February with respect to the same month in 2014. On the Mediterranean Coast, homes have lost more than half of their value due to the crisis, but prices may bottom out in the next few months.

With respect to the peak prices recorded at the end of 2007, house prices have recorded a cumulative decrease of 42.6%, according to the index prepared by Tinsa. On the Mediterranean Coast, the decrease has been much more pronounced, according to the appraisal company, which highlights that in this region, the cumulative decrease during the crisis has amounted to 51.1%.

In February, house prices decreased by 4.9% and 4.4%, respectively, in large cities and metropolitan areas. Since the peak of the cycle, capitals and large cities have recorded a cumulative decrease of 46.5%, whilst metropolitan areas have experienced a cumulative reduction of 45.5%.

By contrast, the Balearic Islands and Canary Islands recorded a year-on-year increase of 0.7% (in Feburary), whilst on the Mediterranean Coast, the decrease was 4.7%. From the peak levels recorded before the crisis, house prices on the islands have decreased by 32.4%.

In the towns included within “other municipalities”, the decrease in February with respect to the same month in 2014 was 2.1% and since the peak, was 36.1%.

Optimistic forecasts?

Tinsa notes that average house prices began a stabilisation process in 2013, characterised by a moderation in the rate of decline in average prices. “If the optimistic forecasts that various official bodies are predicting for economic growth and employment are fulfilled, then average prices in Spain may bottom out in the next few months”, says the company.

However, it warns that this forecast does not exclude the fact that in localised markets, where demand is particularly weak and there are significant levels of stock, (downwards) adjustments are still expected and there may yet be significant year-on-year decreases.

Original story: 20 Minutos

Translation: Carmel Drake

Santander & BBVA Reduced Their Real Estate Stock In 2014

10 February 2015 – El Economista

In 2014, Santander’s real estate stock decreased by 1.8% and BBVA’s dropped by almost 5%.

Banco Santander and BBVA are beginning to shed some real estate weight. For the first time, the economic recovery has allowed the two large banks to reduce their portfolios of homes and land foreclosed from developers and individuals for the non-payment of debt.

The two largest financial groups in the country have managed to halt the entry of property onto their balance sheets and accelerate its exit, thanks to a boost in sales. Thus, the Cantabrian group has decreased the gross value of its real estate portfolio by 1.8% to €7,851 million. After accounting for provisions, which reflect current market prices, this value decreases to just over €3,500 million.

Meanwhile, the bank chaired by Francisco González has reduced its stock by 4.9% to €13,016 million. After applying the appropriate provisions, the value of its real estate portfolio amounts to €6,131 million.

Boost in sales

This decline in the assets of the two main entities has occurred at a time of stability in terms of prices, which seem to have bottomed out having decreased by 40% in the last seven years. This, coupled with the high provisions, which cover between 53% and 55% of the gross value of the assets, has allowed both entities to sell assets, above all, during the second half of last year, without incurring any additional losses.

The increase in the sale of properties and, even some land, also coincides with the war in the mortgage segment that was unleashed in 2014. The entities have launched campaigns to offer loans at the most attractive prices to enable borrowers to purchase homes, including from their own portfolios.

Different strategy

Santander and BBVA’s real estate strategies are different, but both are now starting to bear fruit, after years of burgeoning portfolios of foreclosed assets as developers and families found it impossible to pay their debts.

Santander, like many other Spanish banks, has transferred the management of these assets to Apollo. The Cantabrian group sold 85% of its real estate platform Altamira to the fund, and whereby achieved significant gains with which to strengthen its capital and transfer the management of the entire stock to a specialist company, which has also just been awarded the management of a portfolio by the bad bank or Sareb for the next few years.

BBVA’s plan is different. The entity, headquartered in Bilbao, has preferred to keep the management of all of its unproductive assets in-house, through its subsidiary Anida.

Although prices have now stabilised and the banks are now making some money on the majority of sales transactions after accounting for provisions, the real estate arms of both banks are still weighing down on their income statements. These divisions include not only foreclosed homes, but also loans granted to companies relating to the real estate sector. In the case of Santander, the real estate department recorded losses of almost €600 million in 2014, 8.2% less than in 2013. BBVA recorded losses of almost €800 million.

Both banks hope that these divisions will begin to generate some kind of positive yield within two years and they expect their respective stock balances to have disappeared or been reduced to an absolute minimum within five years. The decreases were more pronounced (in the double digits) in the case of loans to developers than properties due to the divestments performed in the wholesale market.

Original story: El Economista (by F. Tadeo)

Translation: Carmel Drake