Brexit Deters Brits from Buying Homes in Andalucía

17 March 2019 – ABC Sevilla

The residential market in Andalucían is booming, despite the slowdown in demand from British buyers. The regional market is split into two clear segments – the market for second-hand homes for holiday use along the Costa del Sol, centred around Marbella and Estepona – and the market for primary residences across the rest of the autonomous region, where Málaga, Córdoba and Sevilla stand out with the most activity.

In the former, despite the decrease in demand from British purchasers due to Brexit, there has been a notable increase in buyers from the north of Europe, especially from Belgium and the Nordic countries.

In the latter, the local population, which primarily comprises families aged between 45 and 55 years old, with savings and stable incomes, is driving demand. For example, house sales in Córdoba grew by 16% in 2018, according to INE.

Original story: ABC Sevilla (by E. Freire)

Translation/Summary: Carmel Drake

Taylor Wimpey to Invest €70M in 8 Developments in 2019

22 January 2019 – Eje Prime

Taylor Wimpey is setting out its roadmap for 2019. The Spanish subsidiary of the British real estate group is going to launch eight developments with an initial investment of €71 million during the course of this year, according to comments made by Javier Ballester, the CEO of the company, speak to Eje Prime.

The company is planning to build between 350 and 400 homes in several parts of the country. Specifically, Taylor Wimpey has opted for areas where it already has a presence, namely: the Costa del Sol, Alicante, Mallorca and Ibiza. Moreover, according to the executive, “it is possible that, if we obtain the building permits in 2019, the group will launch three more developments, one in Marbella and two more in Mallorca”.

Taylor Wimpey is whereby reaffirming its commitment to the Spanish second home market, where it has been operating for more than seventy years. In fact, the company is currently one of the main property developers in the country that is building assets on beach fronts and overlooking golf courses,

In 2018, the company handed over 342 homes, 14% more than in 2017. It is currently marketing four developments in Alicante, in the municipalities of Torrevieja, Villajoyosa and Elche (…).

Original story: Eje Prime (by Berta Seijo)

Translation: Carmel Drake

Málaga Captures the Attention of Neinor, Aedas & Quabit, Amongst Others

20 January 2019 – La Información

The real estate sector is certain. After Madrid and Barcelona, the city where the property business is going to grow by the most is Málaga. The capital of the Costa del Sol is on everyone’s lips and is forming the focus of the real estate investments being made by many of the leading firms in the sector. Aedas, Neinor and Quabit are just a handful of the property developers that have decided to set up cranes in the Andalucían city, which is seeing how more and more people are choosing to live and spend their summers there.

The experts are not hesitating to point to the capital of the Costa del Sol as the third city in the shadow of the real estate market, behind only Madrid and Barcelona (…).

The attraction of foreign investment is another of the most important factors in Málaga. In this sense, Fernando Ferrero, Director of Merlin Properties, said that in the office sector, there is still “a lot of potential in Madrid” (…), but he highlights Málaga and Palma de Mallorca as the two cities where foreign investment is proving to be very important (…).

The property developers have been wise to it and so, in recent months, have started to launch promotions in Málaga. That is what Neinor Homes has done, which is offering several urbanisations in the capital, as well as some in nearby areas, such as Marbella and Estepona. In the same way, Quabit (…), has launched itself in the province with both single-family homes, and blocks of flats. Aedas Homes is not being left behind and is going to build Vanian Green Village, a housing complex in Estepona, another town that is growing in the capital’s shadow.

The boom in residential properties, both primary residences and holiday homes, has turned Málaga into a reference for the future of real estate. So much so that the data for the granting of new building permits soared in the province by 56.85% in 2018. In total, 7,678 permits were granted compared with 4,895 in 2017, according to data from the Official Architects College of Málaga (…).

Original story: La Información (by Lucía Gómez)

Translation: Carmel Drake

La Llave de Oro Buys Land in Ibiza to Build 65 Homes

8 May 2018 – Eje Prime

La Llave de Oro is on a roll in the office and residential sectors in Spain. After purchasing a plot of land on which to build offices in the 22@ district of Barcelona from Metrovacesa last June for around €20 million, the group is continuing to explore new destinations into which to expand its business. The latest has been the purchase of a plot of land in Santa Eulària des Riu, in Ibiza, on which it will build 65 homes, according to Ferrán Marsá, CEO of the group, speaking to Eje Prime.

According to Marsá, the project in Ibiza is currently being reviewed, although the plans are for the building work to begin imminently. In addition to homes, common areas, car parks and swimming pools will also be built on the plot.

Moreover, this is not the group’s only project on the Balearic Islands. In Palma de Mallorca, the company is immersed in the construction and subsequent sale of a development comprising 16 homes and parking spaces at number 16 Calle Alber, in the Es Rafal Vell area. La Llave de Oro also has a sales office in Palma de Mallorca.

Nevertheless, the group’s main business is focused in Cataluña. La Llave de Oro is currently building fifteen homes at number 286 Calle Pallars, in Barcelona, as well as another 30 homes (plus two commercial premises and a car park) in Nou Rubí, in Rubí.

La Llave de Oro is also working on a 95-home development in Plaça Europa, in l’Hospitalet de Llobregat. There, the company is also going to build a commercial premise, two social rooms and 106 parking spaces. It will be one of the developments that incorporates the greatest number of new features in terms of customisation and energy ratings.

To reach the 450 homes that La Llave de Oro plans to hand over in the coming years, the company has also started work on the construction of almost 60 homes at number 179  Passeig Taulat, in Barcelona, as well as on 90 homes in Sant Cugat del Vallés, which correspond to the second phase of the Volpellers development.

Diversification strategy 

Although La Llave de Oro is going to continue to focus on the development and construction of primary residence homes in Barcelona and the first metropolitan ring, the company is also going to keep looking for opportunities to diversify its revenues. One of the businesses that the group is firmly backing is the hotel sector, as well as the office segment.

The company opened a hotel on Avenida Drassanes in the Catalan capital in 2012, the Andante Hotel, with 134 rooms and which it manages directly. This model involving the development and subsequent management of a hotel, whose results have proved very satisfactory, is what the firm wants to replicate in at least two or three more establishments.

In terms of the office sector, La Llave de Oro used to own a portfolio of almost twenty rental properties, prior to the crisis, which it sold to Goldman Sachs two years ago to raise funds for its property development and construction business, in a deal worth €90 million.

Now, La Llave de Oro is expressing interest in returning to that business segment through the construction and rental of several office buildings in Barcelona. Its purchase last year of a 3,300 m2 plot in the 22@ district of the Catalan capital for €22 million forms part of that strategy. The group plans to build 17,400 m2 of office space on that plot, which used to be owned by Metrovacesa (…).

La Llave de Oro group recorded turnover of €125 million in 2017, compared with €140 million in the previous year. Its workforce comprises 200 professionals (…).

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Balearic Islands Will Force “Large Landholders” to Give up Their Empty Houses


This measure will not affect owners who have these homes as part of their assets, unless they are active entrepreneurs in the residential real estate market

The government of the Balearic Islands approved an executive order this Friday, modifying its previous executive order on tourist rental accommodations in the Balearic Islands. The intent is to regulate and order the business of renting tourist apartments in the archipelago, an area which has been highly successful in recent years.

One of the main changes is that the regional executive will, by law, oblige the “large holders” of housing – companies, not individuals – to cede them if they have been vacant for two years to relieve existing difficulty of access to social housing, the minister of the Territory, Energy and Mobility informed today.

The law considers that “large holders” are natural and legal entities who, directly or indirectly through corporations, actively participate in the market and who own, rent or have beneficial ownership of ten or more houses. They will be required to develop an economic activity for the dwellings, that is, mere possession will not be enough.

The order will not affect owners who have such housing as part of their holdings, but only active entrepreneurs in the housing market. The law provides for an inspection body, both to detect empty dwellings and irregular uses of public housing and other violations.

The minister stressed that the Balearic Islands Consultative Council has endorsed one of the main measures included in the law: the obligatory temporary reassignment of those properties held by the “large holders.”

The affected entities will receive adequate financial compensation, which also establishes the obligation of the “large holders” to register empty houses in the Register of Unoccupied Homes, where failure to comply will expose the holders to a fine of 3,000 to 30,000 euros.

The law will “protect” citizens so that they can access rentals or continue in their homes in conditions of “dignity”, with essential services.

It also aims to boost social rentals, increasing the supply of public housing for social rental, and to implement controls to avoid fraud in the use of this type of housing. In addition, universal housing accompanying services, free of charge, was created for all citizens.

In addition, it is very possible that in the Balearic capital, legal holiday rentals of primary residences will be limited to a maximum of 2 months, following the example of Amsterdam, while the rentals may be completely banned on the island of Ibiza.

Intended for habitual residence

The function of the housing accompanying service, which will be under the purview of the Balearic Institute of Housing (IBAVI), will be to guide citizens in situations where there is a risk of loss of housing – because they cannot pay rent or the mortgage – and to assist them with any information that they may require in during a purchase, rental or financing of a home, while also helping individuals understand their rights as consumers.

On the other hand, in order to guarantee sufficient social housing (VPOs) in the Balearic Islands, all new developments will be classified as VPOs, where they will not be able to be sold above an established price. This measure will not affect current VPOs.

Finally, the executive order details the conditions of use of official social housing, which has to be used as primary residences.

Official social housing cannot be rented, except in certain specific cases, such as change of address for work, health, family, cases of gender violence, terrorism and other situations that are justified and authorized by the regional administration.

Original Story: ABC / EFE – Palma

Translation: Richard Turner

Aedas Completes €2.3M Capital Increase

17 July 2017 – Eje Prime

Aedas Homes is continuing to raise funds to finance its growth. The company, the heir of Vallehermoso, has carried out a €2.3 million capital increase, which it plans to use to continue to boost its growth and strengthen its position as a key player in the real estate development business in Spain.

According to the Commercial Registry, the company Aedas Homes has carried out a capital increase amounting to €2.3 million. This is the second injection that the company has received in recent months after it increased its capital by €31.5 million in April. In this way, the company’s subscribed capital now amounts to €33.7 million.

Aedas Homes, created by the fund Castlelake and advised by Merlin Properties, was created with the objective of constructing 12,000 homes on land that it has been acquiring since 2013, spanning around 1.35 million m2. In March, Aedas Homes, which competes directly with Neinor Homes, Aelca and Vía Célere, began marketing its first fourteen developments and the group plans to add another fifteen developments to its portfolio in the near future.

The company began life in 2013, where the country’s housing market bottomed out and almost all of its activity was suspended. The fund Castlelake is one of the players who decided to back this business in Spain and in order to carry out its plans, it started to create a portfolio of land in locations that, according to its criteria, would be the first to recover.

At the end of 2015, when the real estate recovery started to become a reality and after investing more than €1,000 million in Spain, the fund had accumulated a portfolio of land covering more than 1.3 million m2, equivalent to 12,000 homes, of which 75% corresponded to primary residences.

It was at this point that the leaders of the project started to think about the possible evolution of all of their assets. To figure it out, they invited the Socimi Merlin Properties to enter the fold, to advise the group on the best formula for operating its land portfolio.

At the company’s helm is David Martínez (pictured above), who has vast experience in the real estate sector. After holding positions of responsibility at groups such as Ferrovial and Bovis Lend Lease in the 1990s, Martínez led projects such as Valdebebas and served as a senior manager at Distrito Castellana Norte.

New hires

In parallel to its growth, Aedas Homes is continuing to beef up its management team. The company recently hired Enrique Gracia, former director of Merlin, as the new Head of Finance. Gracia joined Aedas Homes in May; he has more than fifteen years of experience in the real estate sector (…).

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Moody’s Warns Of Higher Default Risk For Restructured Mortgages

11 November 2016 – Expansión

Yesterday, the ratings agency Moody’s issued a warning about mortgages that are being restructured, which represents an increasingly larger pool, thanks to the economic recovery and the proliferation of real estate management platforms. In the entity’s opinion, several variables may lead to an increase in the risk profile of these assets. Specifically, restructured mortgages are more risky when: the mortgage term is extended; grace periods are granted for the payment of interest or the repayment of the principal; interest charges are reduced; and other modifications are made.

This warning comes just a few weeks after Blackstone created the first securitisation fund in Europe containing restructured loans, amounting to €265 million. It created the fund using mortgages that it purchased from Catalunya Banc at the beginning of 2015. Nevertheless, it only included loans that borrowers have been repaying normally, without any help, for more than 37 months.

Analysts at Moody’s consider that foreign residents in Spain are twice as likely to default on their loans than Spaniards. “A defaulted payment by a foreigner on a Spanish loan does not have any impact on his credit history in his country of origin; and clearly, that reduces the incentive for him to seek solutions to repay his debt”, say the experts. In turn, the risk of default is 30% higher for borrowers who have restructured mortgages over secondary residences compared with those who have restructured mortgages over primary residences.

Moody’s has also conducted analysis by geographic region and in this sense, its results are clear: borrowers who have restructured mortgages for homes on the coast are almost twice as likely to default than borrowers with restructured mortgages in Madrid.

The default rate

Meanwhile, Axesor forecasts that the default rate for loans to families and companies will close the year at 8.96%, which would bring it below the 9% threshold for the first time since May 2012. The balance of doubtful debts amounted to €116,613 million in August, which represented a YoY decrease of 17.58%, and that figure is expected to continue to fall at a double-digit pace, which means that we could close the year with a doubtful debt balance of around €110,051 million.

Original story: Expansión (by D.B.)

Translation: Carmel Drake

Bank Of Spain: Home Evictions Down By 20%

21 July 2016 – El Mundo

A total of 17,939 homes were evicted by court order in 2015, up by 11.3% compared with 2014, of which 77% related to primary residences. Nevertheless, only 902 of those properties were occupied, which represents a 20.1% decrease compared with 2014, according to data from the Bank of Spain, which shows that the aforementioned increase was concentrated in the eviction of empty primary residences (35.7%).

In addition, the issuing bank states that 82% of the mortgages that gave rise to forced evictions of occupied homes, both primary residences and others – corresponding to 1,112 properties, down by 18.2% – were originated in or before 2007.

The lower level of activity in terms of evictions is also observed in the data relating to law enforcement involvement in property evictions. In this way, only 14 such interventions were recorded in 2015, down by 44%. Of those, less than half were carried out in primary residences.

If we add together the legal and voluntary proceedings during 2015, there was a 3.8% decrease in the total number of homes handed over, to 36,929 – i.e. 0.57% of all mortgages – which in the case of primary residences amounted to 2.4%, with 29,327 properties.

More than half of the homes handed over were done so voluntarily

The number of voluntary home hand overs decreased by 14.8% last year, to 18,990, with a reduction of 20.1% in the case of primary residences. Thus, voluntary home hand overs accounted for 51.4% of the total.

On the other hand, there were 16,175 “daciones en pago”, down by 12.4% compared with 2014, which accounted for 85.2% of all voluntary home hand overs. Of those, 81.5% related to primary residences, down by 19.9%.

Other data provided by the Bank of Spain indicates that the total number of mortgages granted for house purchases amounted to 6.3 million at the end of 2015, down by 1.1% compared to a year earlier.

Original story: El Mundo

Translation: Carmel Drake

INE: Primary Residence Foreclosures Fell By 31.8% In Q1

3 June 2016 – El País

The number of foreclosures over primary residences is continuing its decline. The number of cases involving homes (secured by mortgages) being sold due to a failure to keep up with the mortgage repayments, decreased to 6,118 during the first three months of the year, which represents a 31.2% reduction compared with the same period in 2015, according to Spain’s National Institute of Statistics (INE). Taking the total number of family homes in Spain during the first quarter (18,408,300) as a benchmark, foreclosure proceedings were initiated on 0.03% of those properties during the quarter.

Whilst the crisis recedes, so too does one of its darkest sides. Two years ago, in 2014, 34,680 primary residences were handed over to the banks to settle unpaid debts. In 2015, that figure decreased for the first time by 13%. The decrease in interest rates to historical lows – they closed May in negative territory for the four month in a row and the monthly rate dropped to -0.013% – and agreements between borrowers and financial entities have helped to alleviate the drama.

Homes mortgaged in 2007 are the worst off

Borrowers who mortgaged their homes in 2007 and did so over second-hand homes have been hit the hardest. 20.4% of the foreclosures in Q1 corresponded to loans granted in that year. 15.6% related to mortgages signed in 2006 and 11.8% to loans taken out in 2008. The period comprising 2005-2008 accounted for 58.5% of all mortgage foreclosures and the highest values were reached in 2013 and 2007. During Q1, foreclosure proceedings were initiated against 0.20% and 0.19% of the mortgages granted over homes in each of those years, respectively, according to INE. 86.4% of the cases initiated during the three months to March related to second-hand homes, whilst 13.6% corresponded to new builds.

Homes owned by legal entities accounted for 17.7% of the total mortgage foreclosures. Beyond the housing market, the number of mortgage foreclosures registered over properties in general during the first quarter amounted to 19,354, which represents a 37.9% decrease with respect to the same period in 2015.

Andalucía, the most asphyxiated

The autonomous regions with the highest number of mortgage foreclosures over homes were Andalucía (3,144), Cataluña (2,113) and Valencia (2,094). And the fewest foreclosures were filed in Cantabria (43), La Rioja (54) and Navarra (61). Borrowers who took mortgages out between 2003 and 2015 in Murcia (0.25%), Andalucía (0.20%) and Valencia (0.18%) were the worst off. Meanwhile, those in the País Vasco (0.03%) and Cantabria (0.06%) suffered the least.

Original story: El Páis (by Sandra López Letón)

Translation: Carmel Drake

INE: Home Foreclosures Drop By 6.5% To 17,800 In Q1 2015

8 June 2015 – Cinco Días

During Q1 2015, 30,952 mortgage foreclosures (i.e. procedures to force the sale of properties resulting from unpaid mortgages) were recorded in Spain’s property registries. Of those 30,952 procedures, 17,780 related to homes, i.e. 6.5% fewer than during the first quarter 2014. The foreclosure of individuals’ primary residences amounted to 8,802, i.e. 6.9% fewer, according to data from INE.

The statistics institute highlights that not all mortgage foreclosures are the result of the legal removal (eviction) of owners from properties, and that in some cases, a single property is subject to several foreclosure procedures. The Bank of Spain has other statistics relating to evictions.

In general, non-payment results in foreclosure after a period of between six and 12 months, therefore the foreclosures completed during Q1 2015 related to mortgages that stopped being paid during the first half of 2014. Moreover, in addition to the 17,780 home foreclosures, INE recorded 10,316 other (foreclosure) processes involving premises, garages and offices and 1,361 relating to rural properties.

Most of the mortgages that result in the seizure of homes were signed during the last few years of the real estate bubble: 21.1% were signed in 2007, 15.2% in 2006 and 11.8% in 2008. Mortgages signed in those three years account for 48.1% of all foreclosures, although we should take into account that at that time, more than 100,000 mortgages were being granted per month, compared with current volumes of 20,000 per month. In relative terms, the worst year is still 2007, with 0.3% of the mortgages that were signed that year being foreclosed during Q1 2015, followed by 2008, 2009, 2013 and 2012 (between 0.21% and 0.25%).

By region, the effect of the real estate bubble is also leaving is mark: the highest rates of home foreclosures form a rainbow in the shape of the Mediterranean Coast. Andalucía leads the ranking (with 0.29% of the mortgages foreclosed last quarter), followed by Murcia (0.25%), Valencia (0.25%), Cataluña (0.23%). In the País Vasco, the rate is 0.02%.

Original story: Cinco Días

Translation: Carmel Drake