BBVA: Málaga Has The Most Active RE Market In Spain

27 March 2017 – Málaga Hoy

Málaga is the Spanish province with the most real estate tension, given that it has the highest index of sales as a proportion of existing stock, a parameter that indicates the dynamism of the area. Moreover, that pressure is leading to an increase in house prices, to the extent that Málaga has seen the third highest price rises of all of Spain’s provinces over the last three years.

Those are the findings from the Real Estate Market in Spain report, prepared by BBVA, which was presented in Málaga on Thursday by the analysts Félix Lores and David Cortés. The study reveals that between 2014 and 2016, 28.4 homes were sold in Málaga for every 1,000 property stock, thanks to an increase in demand during the period of almost 15%. The only other province to come close was Alicante, with 25 purchases for every 1,000 homes; and Málaga was thirteen points above the Spanish average. That was, in part, due to the fact that Málaga and Alicante are the two Spanish provinces where most homes are sold to non-resident foreigners.

When demand exceeds supply, prices rise. On average, Málaga was the third-ranked Spanish province in terms of the highest house price rises between 2014 and 2016, at 3.1%, triple the national average. During that period, property prices rose by more only in the Balearic Islands (3.5%) and Barcelona (3.3%). In more than half of Spain’s provinces, not only has a reactivation of the market not been felt, but house prices are continuing to fall. In Sevilla, for example, house prices decreased by 1.6% during the same period.

“Sales have been recovering since 2013, with Madrid, Barcelona and the Mediterranean region, together with the islands, leading the way”, said Lores. According to these experts, this boost is consolidated because it is being driven by an improvement in employment and household income, which means that it is not subject to speculative movements (with feet stuck in the mud) like in the case of property price bubbles. In fact, the analysts from BBVA deny that we are seeing the start of a real estate bubble.

Looking to the future, Málaga is also one of the leading provinces in Spain, given that it is one of those that has most contributed to the increase in visas in the country, together with Madrid, Barcelona and Alicante. Between 2014 and 2016, the number of housing visas granted grew by 55% in Málaga, although it is worth remembering that the starting point was very low and well below than the volumes signed at the height of the real estate boom. More business is forecast because, amongst other factors, the sector has been so quiet in recent years, also demand exists and supply is limited, however there are several uncertainties, such as the effect of Brexit on British residential tourists, the macroeconomic impacts that Trump’s protectionist policies in the USA may have and the results of upcoming elections in several European countries.

Original story: Málaga Hoy (by Ángel Recio)

Translation: Carmel Drake

PwC: High-Quality Asset Shortage Boosts RE Development

29 January 2016 – Cinco Días

The abundance of capital and shortage of high-quality assets will drive real estate development in 2016, as well as boost investment in alternative sectors. Those are the findings of a report, Trends in the European Real Estate Market in 2016, prepared by PwC on the basis of 550 interviews with key players in the sector.

Capital will continue to force its way into the market, thanks to the sustained environment of low interest rates in Europe – and the consequent greater appeal of real estate investments versus the low returns on fixed income products and the volatility of the markets – the majority of the cash flows from outside Europe will come from Asia and America.

Nevertheless, there will continue to be a scarcity of high-quality assets, and those that are available will be overvalued, in almost every European market. In this context, property development is the best option for acquiring high-quality assets with good prospects in terms of returns.

The property development drive will be accompanied by an increase in activity in other segments – beyond the traditional commercial and office properties – such as health centres, hotels, student accommodation, data centres and logistics assets.

The document reflects the optimism of the funds, institutional investors, real estate companies and banks, although to a lesser extent than last year. Expectations are especially high in countries in Southern Europe, including Spain. Financing has completely disappeared from the list of (these players’) concerns about the sector.

Just like every year, the report analyses the main European cities and classifies them on the basis of their investment and development prospects. Madrid and Barcelona fair well. The Spanish capital maintains its position as the fourth most attractive city in Europe, behind Berlin, Hamburg and Dublin. Between October 2014 and September 2015, Madrid was the fifth most active market in Europe, during which time €5,000 million was invested in the city. Barcelona rises one place in the ranking – from thirteenth to twelfth.

Original story: Cinco Días (by Carlos Santana)

Translation: Carmel Drake