BBVA Research: House Prices Will Rise By 3.5% In 2017

19 October 2016 – Expansión

(…). BBVA Research indicated yesterday, in its report entitled “The Real Estate Situation in Spain” for Q2 2016, that “the improvement in sales is permitting a gradual appreciation in house prices”, which are expected to grow by 2.5% this year and by 3.5% next year. It added that this rise will be accompanied by very significant growth in terms of transaction volumes, given that sales are forecast to grow by 10% this year and by 6.5% next year, to reach 475,000 real estate operations in 2017.

This report echoes data published by Spain’s National Institute of Statistics (INE) and the Bank of Spain, as well as by property registrars and several appraisal companies. One of them, Tinsa, recently indicated that house prices rose by 2.4% in September, with a strong increase in rental prices. Nevertheless, BBVA Research went a step further and said that this positive trend will continue well into next year, and may even accelerate thanks to job creation, improved confidence, the opening of the credit tap and demand from overseas buyers.

All of this will reinforce the effect that the price rises seen in recent months have had in terms of encouraging the market and investors who do not want to miss out. In this sense, BBVA Research said that “the path observed in terms of residential property prices is generating positive expectations, which will become a new factor that will support the demand for housing”. As a result, the sector will manage to offset some of the forecast deterioration in other factors next year, such as economic growth (which will slow by almost one percentage point in 2017, according to the main analysts, including BBVA itself), the moderation in global growth and the expected increase in oil prices.

Knock-on effect

Nevertheless, this increase in prices and transactions is not isolated, but rather is generating even greater positive effects in other aspects of the market. In this way, permits for new homes have recovered at a rate of almost 35% across Spain as a whole and by more than 100% in regions such as the Canary Islands and La Rioja. As a result, 90,000 new permits are expected to be signed next year, with housing starts at record highs compared to recent years.

In addition, the market for land is also enjoying more activity, with a 19.2% increase in the surface area sold during the first half of the year. This increase has also been accompanied by an increase in land prices (5.9%) following an increase of 4.3% in 2015, which reflects the outlook for the sector. Meanwhile, the purchase of land has undergone a significant change in recent years, given that at the start of the crisis, the major investors were individuals and now 70% of buyers are companies, thanks to the return of credit to the market.

Original story: Expansión (by Pablo Cerezal)

Translation: Carmel Drake

Registrars: House Prices Rose By 6.9% YoY In Q1 2016

13 May 2016 – El Mundo

In Q1 2016, house prices maintained the strength that they had shown in previous quarters and consolidated the changing trend, which began back in 2014, according to the House Price Index of Repeat Sales (which is calculated using the Case & Shiller methodology) prepared by the Property Registrars. This statistic shows that house prices increased by 6.9% compared with the same period in 2015.

In this way, and thanks to the appreciation in house prices in recent months, the cumulative decrease from the peaks of 2007 are continuing to moderate. The cumulative decrease since then now amounts to -27.2%.

More sales

Moreover, the number of house sales recorded during the first quarter of 2016 increased by 9.8% in YoY terms, to reach 99,427 operations. That number in one quarter is the highest recorded in the last three years.

Moreover, new builds recorded their first QoQ increase in several years, after a long period of historical lows, with 19,385 sales registered, up by 3,566 compared with Q4 2015. Meanwhile, there were 80,042 sales of second-hand homes, up by 11,830 compared with the previous quarter, which is the highest figure recorded in the last eight years.

The number of house sales increased in 16 autonomous regions with respect to the previous quarter, with the Community of Madrid (32.9%), País Vasco (26.6%) and the Canary Islands (26.5%) leading the ranking. At the other end of the scale, the number of house sales in Murcia fell by 4.3% compared with the last three months of 2015.

Purchases made by foreigners accounted for 12.9% of the total, compared with the historical maximum in Q4 2015 of 14.4%. Nevertheless, in absolute terms, such purchases are increasing, giving rise to figures close to 12,800 purchases per quarter. A new historical record has been set in the last year in this regard (13.4%), which translates to annual house purchases by foreigners amounting to almost 48,000 units.

By nationality, Britons lead the ranking, accounting for 21.9% of all purchases made by foreigners. They were followed by French (7.9%), German (6.9%), Swedish (6.3%) and Belgian (6.1%) buyers. These first five nationalities accounted for almost 50% of all house purchases made by foreigners.

Average mortgage of €109,215

After a prolonged period on the rise, mortgage debt per home decreased by 1.6% with respect to the previous quarter, to €109,215. Meanwhile, initial interest rates on new loans, which averaged 2.4% in Q3 2015, having decreased by 0.1 percentage point from the previous quarter, continued their decreasing trend for another quarter.

Variable interest rate products, which take Euribor as the benchmark rate, continued at their usual levels, accounting for 88.7% of all new mortgages granted. Fixed interest rate products increased to account for 9.8% of the market, a new maximum in the historical series according to the Real Estate Registrars’ Statistics.

The average mortgage term increased by 2.2% during the first quarter with respect to the previous quarter, to reach 23 years and 1 month, compared with 22 years and 7 months in the preceding quarter.

Meanwhile, the average mortgage repayment amount in the first quarter amounted to €512.83/month, representing a QoQ decrease of 4.3%, whilst the percentage of that repayment amount over wage cost decreased to 27% (compared with 28.3% in the previous quarter). In both cases, the figures represented the lowest levels in the historical series. (…).

Original story: El Mundo

Translation: Carmel Drake

Housing In Q3: Sales Rise By 6.4% & Prices Rise By 2.2%

16 November 2015 – Cinco Días

On Friday, the property registrars published their real estate statistics for the third quarter of the year. According to the figures, prepared using data obtained from operations recorded in the registries, the changing trend in house prices that began in 2014 continued to strengthen during Q3 2015. The Index of Repeat Sales House Prices (based on the Case & Shiller methodology applied in Spain) recorded a QoQ increase of 2.2%. In the last year, prices have increased by 6.6%. The rate of growth in recent quarters is continuing to abate the cumulative decline recorded since the peak levels of 2007, which now amounts to 28.4% on average.

Registered purchases

One of the explanations behind the price rises is the trend in house sales. During the third quarter, the registrars recorded 92,786 operations in total, which represents the highest volume in the last ten quarters, and an increase of 6.4% compared with the second quarter. It also represents an increase of 16.6% compared with the same period in 2014.

“The cumulative YoY data for the third quarter confirms this positive trend, showing that during the last twelve months, 348,388 operations have been recorded, i.e. 13,255 operations more than the cumulative annual volume as of the second quarter 2015”, said the College of Registrars in a statement.

As usual, the distinction between new and second-hand homes explains this positive trend: there were 18,017 operations involving new homes, which represents a new historical minimum, with a decrease of 2.5% compared with the previous quarter. Meanwhile, there were 74,769 transactions involving second-hand homes, which represents a QoQ increase of 8.8%.

Purchases by foreigners

Each quarter, the registrars’ statistics analyse what is happening in terms of demand for homes by foreigners, however it does not differentiate between residents and non-residents. In any case, the operations closed by foreign citizens continued increasing in terms of their relative weight, to account for 13.5% of all house purchases in Q3 2015, above the 12.8% recorded in Q2, which means that foreigners made 12,000 more purchases in Q3.

By nationality, the British, who account for more than 23% of all purchases made by foreigners, are the clear leaders of this ranking. They are followed by the French (who accounted for 8.7% of all operations), the Germans (6.4%), the Swiss (6.4%) and the Belgians (5.5%). The Russians have dropped to ninth place in the ranking, accounting for just 3.4% of all purchases and confirming once again the downwards trend seen in previous quarters.


(…). In terms of new mortgages, the average amount loaned per home equals €109,744, which represents a QoQ increase of 2.09%. In the last year, this figure has increased by 4.6%, to record six consecutive quarters of increases.

Mortgage terms (durations) are also moderating, given that during the third quarter, the average term decreased from 23 years to 22 years and nine months.

On the basis of this data, the College of Registrars estimates that new borrowers are paying an average mortgage instalment of €531.86 per month, i.e. 0.02% less than in the previous quarter, which indicates, according to the experts, that access to housing is stabilising at optimal levels in terms of risk. In fact, this instalment amount represents 28.12% of wages, below the 33% threshold that the Bank of Spain considers is the optimal risk level for households when it comes to borrowing.

Original story: Cinco Días (by Raquel Díaz Guijarro)

Translation: Carmel Drake