The Province of Málaga is Surfing the Crest of the Residential Investment Wave

16 November 2018 – Eje Prime

Málaga is no longer all about the Costa del Sol when it comes to the housing market. The provincial capital has emerged as a benchmark in the province, becoming a new magnet for primary residences, in partnership with the Costa del Sol, where demand for holiday and beach homes has been reactivated. The Mediterranean Real Estate Fair (Simed), which is opening today in Málaga, is a good pulse meter for that growth. In total, more than 160 real estate companies are going to market more than 22,000 homes during the course of the weekend at Málaga’s Palace of Conferences and Fairs (‘Palacio de Ferias y Congresos de Málaga’ or Fycma).

The increase in the number of exhibitors in the room, which are going to occupy 9,000 m2 of surface area, is a reflection of the current climate in Málaga in this new real estate cycle. The 70% increase in space leased by real estate firms since the last edition goes hand in hand with the rise of more than 10% in house prices in the Malagan residential market.

Some data, such as that from the proptech firm Urban Data Analytics, indicate an increase of 19.4% in house prices in Málaga during the first quarter of the year, whilst the Ministry of Development reported that the rise amounted to 10.8%. The public ministry estimated that the price per square metre in the capital amounted to more than €1,500/m2, a value that has not depreciated in the subsequent months.

According to the real estate consultancy Savills Aguirre Newman, which has just opened a regional office on the iconic Calle Marqués de Larios, Málaga is growing from its epicentre. The provincial capital saw its supply of residential new build properties rise by 23.8% in 2017, with more than 4,000 homes planned, and that has repositioned it as the main city in the south of Spain for real estate, surpassing even Sevilla.

The new developments that are being constructed and the high demand in the city, which is undergoing a “metamorphosis”, are going to allow the province of Málaga to exceed the 19,464 homes sold in 2007, its best performance to date, according to the report by Savills Aguirre Newman. Nowadays, property developers and funds who want to acquire land are investing in the capital in light of the demand that exists. “That did not happen before, the residential motor was almost always focused 90% on the Costa del Sol”, says the director of the consultancy firm in Málaga, José Félix Pérez-Peña, in the same report.

The prime area of the capital is its central zone. There, the most expensive square metres are for multi-family homes, which amount to €3,000/m2, whilst in the East of Málaga, the reference area for local buyers, the price of single-family homes amounts to around €2,600/m2.

The large property developers are investing heavily in Málaga

None of the major property developers want to miss out on the opportunity that investing in Málaga represents. Neinor Homes, Aedas Homes and Metrovacesa, amongst others, have projects underway in the area and their intention is to establish themselves with more investments.

Aedas has landed in the capital with 87 homes in Teatinos, the fashionable neighbourhood in the Málagan residential sector, which has great potential for growth. Meanwhile, Metrovacesa has put four projects on the Costa del Sol up for sale and has announced an investment of €175 million in a 250-home development in Torre del Río.

Meanwhile, Neinor Homes is planning 1,500 homes in a dozen developments, comprising both primary residences and second homes in Málaga Capital as well as in several towns along the Costa del Sol, including Estepona, Marbella and Benahavís, amongst others.

Original story: Eje Prime (by J. Izquierdo)

Translation: Carmel Drake

Neinor Backs Costa del Sol with Construction of 1,500 Homes

2 July 2018 – Eje Prime

Neinor Homes is joining the wave along the Costa del Sol. The residential property developer has plans to construct a dozen promotions in the area, comprising 1,504 homes, which will be built over the next few months.

Estepona will be the nerve centre of the commitment on the Costa del Sol made by the listed real estate company led by Juan Velayos. With a mix plan, which will see the firm promote first and second homes for mainly international clients, Neinor will build up to 486 homes in the Estepona municipality.

Casares, with 134 homes; Vélez-Málaga, with 104 homes; Marbella, with 49 homes; and Benahavis, with 45 homes, are the other towns where Neinor Homes will be active along the Costa del Sol. Moreover, the property developer will build 558 new primary residence homes in the capital, Málaga, spread over three projects, according to Cinco Días.

Beyond the Málagan province, the real estate company led by Velayos will build another second residence project in Mojácar (Almería), where it will construct 96 homes. The director, who recently expressed his optimism about the future of the Spanish residential market, has the Israeli fund Adar Capita as its main shareholder, with 28.7% of the shares.

Neinor Homes has a plan underway to hand over 1,000 homes this year; another 2,000 in 2019; 4,000 homes in 2020 and another 8,000 between 2021 and 2022. In total, it will invest more than €1.5 billion in the purchase of land, as revealed by Eje Prime. Through its offices in Madrid, Barcelona, Bilbao, Valencia, Málaga and Córdoba, the property developer has 48 projects under construction at the moment.

Original story: Eje Prime 

Translation: Carmel Drake

Tinsa: Málaga Leads Resurgence of Spain’s Real Estate Sector

5 April 2018 – Málaga Hoy

The main star of the resurgence of the real estate sector in Spain is Málaga. A report published yesterday by the appraisal company Tinsa reveals that “the province of Málaga, with 35 house sales for every 1,000 homes in the last year, is the region with the highest volume of activity in the whole country”, ahead of Alicante and the Balearic Islands.

This research compares the number of house sales and new home permits with the volume of existing housing stock in order to “identify the most dynamic markets in proportion to their size”. In terms of planned homes, Málaga is one of the provinces that is growing the fastest with 4.8 licences approved for every 1,000 homes in the last year, a similar volume to that of Alicante and Vizcaya, although the highest number of permits in proportion to the existing stock was seen in Madrid and Guipúzcoa.

Málaga is a very sought-after market for the main domestic and international property developers and that can be seen through the high number of residential projects that are currently underway both in the capital as well as at various points along the coast, primarily in Estepona. Several directors in the sector commented recently to this newspaper that Málaga is on everyone’s agenda, at the same level as Madrid and Barcelona, and that the province can expect to see multi-million euro investments.

Logically, that supply is being built because there is demand, although it is unique in the case of Málaga because, in this province, buyers looking for primary residences compete with investors looking for properties to lease to tourists and foreigners who want to acquire second homes on the coast where they can stay for several months at a time. There is tension and that drives up prices and decreases the average transaction term.

According to Tinsa’s report, the average price per square metre in the province of Málaga during the first quarter of this year was €1,479/m2, up by 5% compared to the previous year, including both new and second-hand homes. That represents a considerable boost, but, as the research itself points out, this average price is still 42% lower than the peak reached in the last decade at the height of the bubble. According to the appraisal company, that price increase means that the average mortgage taken out by buyers in Málaga amounts to €120,465 with a monthly instalment of €561, the highest in all of Andalucía.

Homes are more expensive but the time needed to sell them is less because there are increasingly more clients who are willing to pay the asking price. During the first quarter of this year, the average sales period for a home in the province of Málaga was 7.4 months, according to data from Tinsa, whilst over the last three years, the average has amounted to around nine months.

Original story: Málaga Hoy (by Ángel Recio)

Translation: Carmel Drake

Málaga’s Residential Sector is Booming Once Again

11 March 2018 – Málaga Hoy

“We all want to be in Málaga because almost all of the cases there are successful. It is an established location (…)”. That is according to Juan Conejo, Director in Andalucía of the property developer Momentum, and his feelings are shared by the majority of the professionals in the sector who ratify that Málaga is, for the time being, the third largest market in Spain for the construction of new build homes, behind Madrid and Barcelona. This newspaper has been in contact with several of the most important property developers that operate on the Costa del Sol and all of them tell the same story: the crisis is over, the sector has reactivated and thousands of homes are being built or will be soon backed by multi-million investments.

Moreover, the complexion of the market has changed completely. The banks are no long financing the land purchases, but rather property developers are having to look for other resources – in-house, investment funds, asset sales, etc. – and they are only being granted loans to build homes if they can prove that at least 40%-50% of the homes have already been reserved, the famous pre-sales. Financial institutions only lend money if they find safe bets (…).

In this context, Málaga is becoming one of the great protagonists on the national stage because it is playing on several fronts. The capital is an important location for primary residence properties and the coast, primarily to the west of the capital, although there are also some projects to the east, is one of the most sought-after places for foreigners to have second homes.

“Málaga has clearly climbed onto the podium alongside Madrid and Barcelona and it is clear that the market has been reactivating for a year now, whereas other provinces such as Valencia and Sevilla are starting to see movement now”, explains Miguel Ángel Barruso, Director in Andalucía of Avantespacia, a property developer that is building 215 homes in two promotions in Tabacalera – where it has already sold 70% of the properties – and Teatinos, which will be handed over at the end of 2019. “Property developers have not sold any new homes for 10 years and there is significant pent-up demand on the buy-side, and so we are now looking ahead to the next few years with optimism”, added that expert.

Momentum is clear about its commitment to Málaga (…). “Málaga is growing a lot. We have a development in Teatinos that we were going to build in phases but which, in the end, we are going to construct in one go, comprising 300 homes in total, because we already have 50% of the properties reserved; meanwhile, in Colinas del Limonar, we have two other projects with the same level of pre-sales”, said Conejo (…).

Nevertheless, the Regional Director for Momentum emphasises that it is important to move with caution and to analyse each project in detail, especially in light of the current banking demands. “Starting a construction project now is already a success because it shows that you have pre-sold around half of the homes that you are going to build and it is always harder to get customers to buy off-plan, and so we have to analyse very clearly where the demand is”, he said.

Now, professionalism is key. Rafael Torres, Insur’s representative in Málaga (…). Insur is working on two major projects in Málaga capital in the Plaza del Teatro – where work on 57 homes has now started and 50% of the properties have been reserved, some of which have been paid for in their entirety – and in Churriana. It also has several projects in Marbella, comprising 300 more homes. Torres highlights that the market research conducted by his company reveals that there are 83 new home developments under construction or in the pre-sale phase on the western Costa del Sol, of which 40% are in Estepona, Mijas, Benalmádena, Marbella and Fuengirola.

One of the historical Málagan property developers in Myramar, which celebrates its 60th anniversary this year. Its CEO, Miguel Rodríguez (…) says that the company is currently working on four real estate developments in Mijas, Fuengirola and Benalmádena involving around 200 homes (…).

Meanwhile, Rafael Molina, Commercial Director at Grupo Ansan, also corroborates that the real estate sector is currently enjoying good times in the province (…) “we have developments underway in the Carlos Haya area, in Teatinos and in Puerto de la Torre, where we have already sold a significant volume”, he said.

Two other national companies that have set their sights on Málaga are Aelca and Neinor Homes. Jaime Pérez is the Director of Aelca in Andalucía and explains to this newspaper that “we are absolutely convinced about working in Málaga and we have land on which to build 3,200 homes in the province over the next four or five years”. In Málaga capital, his firm has started to market the first phase of an urbanisation in Hacienda Cabello comprising 128 homes – the total project involves 433 units – , they are going to start work in Bizcochero Capitán, they acquired the Flex building on the Cádiz Road and they are going to start to sell 130 homes and a retail area at the end of the year. They also have another project behind Vialia comprising 144 homes and a hotel. Moreover, they have projects in Mijas and Estepona.

Meanwhile, sources at Neinor explain that (…) “Málaga attracts domestic and international demand alike due to its location, infrastructure and climate (…)”. That firm’s portfolio of projects is also very extensive. At the moment, it has 20 plots and 2,166 homes in the province, which corresponds to a turnover of €780 million. In 2018, it is going to launch the sale of seven new projects, comprising 1,076 homes in total, in Casares, Estepona, Benahavís and Málaga capital (…).

Property developers are investing millions in Málaga because they know that there is demand there. Last year, permits were granted for 5,000 homes and, taking into account the projects that all of these companies have in the pipeline, that number looks set to soar over the next few years, which will generate more employment and wealth in the area.

Original story: Málaga Hoy (by Ángel Recio)

Translation: Carmel Drake

Lar Launches Fund to Coinvest in Residential Segment in Spain & Latam

12 March 2018 – Expansión

Founded in 1975 by Felipe Pereda, the real estate developer Lar was one of the few high-profile companies during the boom that survived the subsequent crash. Having become the manager of one of the largest real estate companies on the stock market, Socimi Lar España, the company owned by the Pereda family has not been neglecting its house building activity. “We are currently working on residential projects in seven countries. At the global level, we are working on projects involving 18,000 units”, explains Miguel Amo, Director General of the Lar Group.

This extensive portfolio also includes the Spanish market, where the company has focused on the residential business, after years of investing in shopping centres (it has a clause not to invest in commercial assets beyond the Socimi). “The first thing we did when we saw the signs of recovery in the market in 2013 was to team up with Fortress to acquire a portfolio containing almost 1,400 homes and plots of land spread all over Spain from Sareb. With that batch, we created a FAB (banking asset fund), which expires this year, with the delivery of the final homes. Next, we entered the luxury business, with Lagasca 99, a project that we are managing and in which we also hold a stake through the Socimi. And, with the market recovering, we saw the opportunity for new build projects”, said Amo.

First fund

Last year, after selecting several plots of land, Lar opted to create a fund, called Acacias Inmuebles, to promote seven projects with 450 homes in total. “The vehicle was created in July 2017 with €35 million and we have now invested 100%. We manage it and we own 30% of the vehicle (…) and the rest is owned by investors from Spain and Peru (…), explains the head of Lar.

In total, Acacias Inmuebles is going to promote five primary residence projects over the next three years in Madrid, Valencia, Málaga, Torremolinos and Sevilla, and two other second-home developments in the Malaga towns of Benalmádena and Mijas (…).

The success of that first vehicle has caused the real estate company to launch a second fund. “We are asking for a minimum capital investment of €500,000. It is a fund without any intermediary liquidity, but which will distribute dividends when the projects are handed over and the investments will be recovered within a period of between three and five years, with an approximate annual return of 12%”.

Besides Acacias and Lagasca, Lar owns other plots for the development of an additional 400 homes. “They are located in Móstoles (Madrid) and Valladolid; in the case of the latter, we will likely sell off some of the land to be developed by third parties”, said Amo. In addition to its activity in Spain, the majority of Lar’s developments are based abroad, primarily in Latin America.

Specifically, Lar, which was one of the first Spanish real estate companies to branch out overseas (in 1998) has 9,000 homes under construction in Mexico, another 5,000 in Peru and 1,300 in Colombia (…) “We are also building in Romania. We always do it by ourselves, in conjunction with a local team, and we are very happy with the results so far”.

Revenues

Thanks to all of these projects, Lar had forecast revenues of between €400 million and €450 million in 2017, which would be added to the fees received for the management of the Socimi. “2017 was a good year in all areas, we sold 1,500 homes in private contracts and 1,300 were notarised. This year, we will hand over 1,500 homes, of which between 200 and 300 will be in Spain”, highlights Amo.

Lar is also committed to buying land for its subsequent management. “In Spain, we are also going to intensify our investment in land. We think that developable land is running out all over Spain, after 10 years with no investment and, so there is a need to “manufacture” land. We want to acquire plots for at least 1,000 homes and if we can buy land for 3,000 units, then even better”.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Fotocasa: 20% of Investors Rent Out Their Properties as Tourist Apartments

2 December 2017 – Expansión

In the last three years – which have seen the consolidation of the current upward trend in the housing market – an unusual situation has arisen: rental prices have risen by more than property (sales) prices; at the same time, demand for rental properties has soared and hundreds of thousands of homes have appeared on the market, which has resulted in an impasse of high yield and low risk. Given that the returns on traditional investments, such as debt and deposits, are at historical lows, property is shining once again. Without falling into the excesses of the bubble, housing is providing investors with shelter and revenues once more.

Not only that. The appearance of new real estate models has spurred on the financial potential of residential assets, in such a way that 20% of real estate investors are now using their properties as tourist apartments. In other words, one out of every five, according to a study by Fotocasa, to which Expansión has had access.

That high percentage – which is expected to continue growing – is due to the fact that new short-term leasing platforms, such as Airbnb, allow investors to obtain even higher returns than from traditional rental arrangements. In any case, 65% of investors still prefer the stability of having a long-term tenant. The remaining 15% buy homes but do not let them out, instead, they wait for them to appreciate in value before selling them for a profit.

“Now is a good time to buy to let, be it long-term or holiday rentals, given that both formulae are generating returns that, in the current context of low interest rates, cannot be found in any financial product or on the stock market”, explains Beatriz Toribio, Head of Research at Fotocasa (…).

11% of all house purchases are bought for investment purposes. In other words, around 50,000 homes this year. That means that around 10,000 dwellings (the aforementioned figure of 20%) will be used as tourist apartments (…).

More revenues

(…) According to data from Fotocasa, 74% of the owners that in the last year have put a tourist home up for rent through the online portals and platforms say that they obtain more revenues through their tourist rentals than from residential letting. 66% of those calculate that they obtain between 5% and 15% more; 16% say that they receive between 15% and 20% more; and 12% state that they can earn 20% more than from long-term rentals.

It is a buoyant time for savers and investors. Almost half of those who buy a home that is not going to be their primary residence, do so as an investment (45%), whilst 55% acquire, in theory, to have a second home. But, almost 40% of the latter group consider putting that home up for rent for short periods of time – for example, during the summer when they are not on holiday there – whilst 7% end up opting for long-term rentals (…).

Rental prices are currently increasing at a YoY rate of around 10% and second-hand house prices are rising by around 5% YoY, according to Fotocasa. Those figures increase to 10% and 20% in certain districts of Madrid and Barcelona, the two major investment centres (…).

The saturation of tourist apartments in Madrid and Barcelona is causing a great deal of political debate. The Town Hall of the Cataluñan capital, led by Ada Colau, first fined Airbnb for its 6,000-7,000 illegal tourist rental properties, and at the same time announced “more forceful legislation”. Then, in the summer, it reached an agreement to make a list of the apartments that were breaking the law. This week, the platform has withdrawn 2,500 advertisements in Barcelona, 1,200 thanks to that agreement with the Town Hall and 1,300 after a limit of one home per person was placed on the number of entire houses that a single owner may have in Ciutat Vella.

Controversy aside, which are the best homes for investing in a tourist apartment? The price and the number of rooms are the basic requirements that buyers look for, but “those who are looking to invest prioritise aspects relating to the area, such as transport links (44% vs 31% for the overall purchasing population), a nice neighbourhood (46% vs 38%) and the services in the area (37% vs 30%) (…).

Tourist rentals have one fundamental disadvantage: “They require more effort and time, due to the high turnover of tenants, especially if the owner manages that side of things him/herself, without the help of a professional”, says Toribio. “That is the main reason why two out of every 10 lessors abandon this type of rental arrangement after giving it a try”, she reveals.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

Demand for Luxury Homes Plummets in Barcelona & Soars in Madrid

23 November 2017 – Expansión

Since 1 October, demand for luxury homes has plummeted by 50% in Barcelona, with a 20% decrease in prices; meanwhile, demand has risen by 40% in the Spanish capital where prices have gone up by 10%.

Secessionism is sinking the Catalan real estate market due to the threat of uncertainty. “Demand for luxury housing has plummeted by 50% in Barcelona between 1 October and 15 November”, explains Emmanuel Virgoulay, Founding Partner at Barnes International in Spain. Whilst Barcelona falls, interest from buyers in these kinds of assets in Madrid is soaring by 40%, according to the real estate company that specialises in the premium segment.

“For every home for sale in Madrid, there are four buyers”. In Barcelona, by contrast, “the damage has already been done”, explained Virgoulay, referring to the unilateral referendum. That process has marked a before and after in the Catalan economy. The uncertainty has caused panic to spread throughout the markets, leading to the flight of more than 2,600 companies, causing the confidence of businessmen and consumers to collapse and paralysing investments. Housing, along with tourism, has been the most affected sector.

Before 1-O, Barcelona was enjoying its best moment since the crisis. The prices of high-standing properties were growing at a rate of 15%. However, since 1 October, the decrease in prices amounts to 20%. During the same month, the cost of these types of assets in Madrid has also moved by double digits, but in the opposite direction, with growth of 10%, like in the Balearic Islands. In Andalucía, the variation has been somewhat lower, between 5% and 10%, according to market sources.

In Barcelona, the rise in prices had generated a bubble. “Some owners were aligning the price of their properties with those in the most exclusive parts of other cities in Europe”, explained Virgoulay. However, investors “put the handbrake on” several months ago now. In October, there was a 50% decrease in the number of deeds signed for the sale and purchase of homes and mortgages, with buyers pulling out and preferring to lose their deposits, which can represent up to 10% of the purchase price, than going ahead with their purchases.

“Investors are going to come to Madrid because the market is safer”, explains Virgoulay. Currently, 57% of the luxury real estate acquisitions that are made in Spain take place in Madrid. The Spanish capital is the most attractive city for domestic and international investors alike. “The weight of the investor market is comparable with the market for primary residences”, he explains.

Looking ahead to year end, Virgoulay considers that, since the Government took action, with the application of Article 155, “the outlook is stable and demand has been starting to recover since 15 November”. But, 21 December is emerging as a new door to uncertainty “anything can happen once again”. Nevertheless, “Prices are going to rise, in general, but in Barcelona, it is clear that they are not going to evolve, they are going to fall”.

In Madrid, like in Barcelona, the average price of luxury housing amounts to €8,000/m2. In the Balearic Islands, where the main demand is from European buyers for second homes, the price per square metre amounts to €7,500/m2.

Barnes plans to open new offices in 2018 in locations such as the Balearic Islands and the Canary Islands. Cataluña was another one of its objectives, but, for the time being, no date has been set for that opening.

Original story: Expansión (by Inma Benedito)

Translation: Carmel Drake

BBVA Research: House Prices Will Rise By 3% In 2017

20 July 2017 – Eje Prime

The residential sector is going full steam ahead. House sales are expected to exceed 500,000 in 2017, an increase of 10% with respect to 2016, and house prices are forecast to rise by three percentage points with respect to last quarter, according to the figures published by BBVA Research in the magazine Real Estate Situation in Spain. In economic terms, the investment in housing will represent 9.4% of the growth in GDP in 2017.

Between January and May, 212,073 homes were sold, up by 14.5% YoY. The cumulative figure over the 12 months to May  2017 saw the number of house sales rise to 488,000 homes. The study reveals that, in a scenario in which there continues to be a limited supply of finished new homes, prices will rise by around 3% per annum on average, closing the year at €1,570/m2, similar to the values last seen in 2004, based on statistics from the Ministry of Development.

In this sense, the report states that property developers will continue to respond to the increase in demand and it is expected that they will request permits to build around 80,000 new homes this year, up by 20% to satisfy demand.

The market is growing across all of its component segments, primarily due to the sale of primary residences, ahead of demand from foreigners, which accounts for 17% of the total market, and second homes (9%).

Meanwhile, financing costs, with mortgage rates at around 2.2%, the expectation of attractive capital gains and strong demand from foreigners are all having a positive effect on demand.

Original story: Eje Prime

Translation: Carmel Drake

Tinsa: Investment In Coastal Housing Soars

19 June 2017 – Expansión

Guide for investors along the coast / House prices rose in 62% of Spain’s coastal towns during the first quarter of the year, in particular, along the Mediterranean Arc and in the Canary and Balearic Islands, thanks primarily to an increase in demand from investors and foreigners. The forecasts from analysts point to a clear improvement in prices this year in more than half of the areas analysed along the coast. Antigua, in Fuerteventura, recorded the best YoY price rise in Q1 2017, up by 26.1%. (…).

The holiday home market is performing well once again in the majority of Spain’s coastal regions and some economists say that 2017 could be the year of consolidation in the real estate sector. Property prices recorded YoY increases in 84 of the 136 coastal towns analysed, based on data for the first quarter of 2017. In 2016, that figure amounted to 71 and in 2015, just 32, according to the latest report from the appraisal company Tinsa about Coastal Housing.

Political stability, following the failed motion of no-confidence, has combined with economic growth, thanks to the good outlooks from analysts. The forecasts for GDP growth show that the figure is going to exceed 3% this year for the third consecutive year. Moreover, Spain is a strong candidate to become the tourism leader at the global level, with a record forecast in terms of visitor numbers of 82 million this year. The increase in confidence has opened the financing tap, driven by demand for housing, amongst Spanish and overseas investors alike, looking to acquire a second home. (…).

The highest increases were recorded in the Mediterranean Arc – Costa Dorada, south of Alicante, the western coast of Málaga and the Cádiz coast – and the islands, both the Canary and Balearic Islands – in particular, Mallorca and Ibiza. The Atlantic and Cantabrian coasts are recovering more slowly, above all in the area of A Coruña and Asturias, in part due to more significant price decreases following the crisis. Nevertheless, that area has some exceptions, such as Guipúzcoa, where demand for holiday homes mergers with demand for primary residences.

The burst of the real estate bubble meant that this sector was one of the hardest hit by the crisis. In some regions, prices dropped by 60%. (…). It is true that this decrease was less marked in some of the coastal areas, thanks to demand from tourism. Along the Mediterranean Coast, the areas that lag behind the most are the coasts of Almería and Granada, which are still recovering, as well as the south of Valencia and Barcelona, and Gerona, Tarragona and Castellón, to the north of the arc. (…). Excluding those capital cities that have a coastline, Antigua (Fuerteventura) recorded the highest house price increase, with a rise of 26.1% in the first quarter of 2017, compared to the same period in 2016. That was driven by an increase in demand, given that sales there soared by no less than 81% in 2016. The second highest price rise was seen in Gavà (Barcelona), with 17.8%, followed by Mojácar (Almería), with 17.3%. The outlook for prices in 2017 is promising. According to analysts, prices will improve in more than half of the areas analysed (52%). (…).

Original story: Expansión (by Inma Benedito)

Translation: Carmel Drake

Euroval: RE Activity Is Still “A Long Way” Below The Boom Levels

7 June 2017 – Expansión

The real estate appraisal company Euroval has said that real estate activity in Spain is still “a long way” below the levels reached a decade ago.

Specifically, based on data from a simulation that it has performed, Euroval highlights that real estate activity in Spain currently represents a quarter of the level achieved during the real estate boom.

According to the appraisal company, the recent economic crisis “is still taking its toll” on activity in the Spanish real estate sector. In fact, it has highlighted that the number of mortgages granted, the volume of construction revenues and expenses and the number of transactions carried out are still way behind the figures recorded 10 years ago.

By region, whilst in Andalucía, Murcia, the Community of Valencia and Cantabria, for example, real estate activity was operating at 100% in 2004, it is now performing at 13%. Moreover, the autonomous regions that are improving their activity in this sector compared to 2004 are the Balearic Islands (45%), País Vasco (28%) and Navarra and Extremadura (22% in both).

According to Euroval, “there are no known cases of economic sectors in any country representing a similar percentage of GDP as the real estate sector did in Spain at the time of its greatest rise, after which it suffered losses of more than 80% in less than a decade.

The appraisal company considers that the volume of residential appraisals and the supply of housing are the “key” indicators that reflect this decrease. Specifically, in 2006, around 1.3 million appraisals were performed, compared with 625,000 last year.

In 2016, the autonomous region with the highest volume of appraisals was Andalucía, with 129,200. It was followed by Cataluña, with 120,400; Madrid, with 85,300; and the Community of Valencia, with 76,700.

In terms of the housing supply, Euroval’s conclusions highlight the “anomalous behaviour” in terms of housing demand in Spain, given that “despite the significant decrease in prices”, there is still “weak demand in light of the uncertainty surrounding the economy and employment”.

The data from the appraisal company also indicates that this “weak” growth has been concentrated in primary homes above all, which have increased from 15 million units in 2004 to 18 million last year.

The evolution of finished homes used to amount to around 536,600 properties, almost double the number started that year, whilst in 2016, the figures were 50,351 and 34,351 units, respectively. Euroval predicts that the market will tend towards growth over the next two years.

Original story: Expansión 

Translation: Carmel Drake