Tag: recession

The Previous Recession Lasted 6 Years and House Prices Fell by 30%: What will Happen in this Crisis?

During the crisis that started in 2008, the País Vasco was home to the most expensive house prices, but Madrid saw a better recovery; meanwhile, Guadalajara and Toledo registered the greatest price decreases.

In 2008, the housing bubble that had been growing for almost a decade in Spain, driven by the heat of the country’s economic boom, burst. Then, a period of falling prices and declining sales began in the residential market; at the national level, the market had not yet recovered by the time the coronavirus crisis hit earlier this year.

Last time, the fall in prices lasted 6 years, from the first quarter of 2008, when they peaked, to the first quarter of 2014, when they bottomed out. “Between the period just before the real estate bubble burst in 2008 and the moment just before the recovery, average sales prices fell from €2,017 per square metre to €1,414 per square metre, whereby losing 30% of their value“, explains Antonio Ramudo, Data Scientist at Brainsre.

At the end of 2019, according to the Ministry of Development, only 53% of the value lost during the crisis had been recovered, with the average price reaching €1,734 per square metre.

In terms of sales, the volume of homes bought and sold per year went from 952,805 in 2016 to just 299,953 in 2013, representing a collapse of 68.5%. By 2019, when 567,753 sales were registered, only 41% of the transaction volume executed at the height of the boom had been recovered.

Although the peak in terms of the volume of house sales in Spain occurred in 2006, when almost a million homes were sold, the maximum average transaction price (€2,017 per square metres) was not reached until the first quarter of 2008. “This shows that fewer transactions were being registered before prices started to drop,” says the Data Scientist at Brainsre.

Likewise, the data reveals that, after the 2008 economic crisis, the minimum number of house sales was recorded in 2013, when 299,953 units were sold; meanwhile, the value of those transactions continued to decline until 2014, when in the first quarter the minimum average transaction price (€1,414 per square metre) was reached, a value that had not been recorded since 2004.

In other words, before prices began to increase, the number of transactions began to rise. “An uptick in demand produced an initial increase in transactions and a subsequent rise in prices and, vice versa, the decrease in demand led to fewer transactions being registered and, subsequently, to a decrease in prices,” explains Ramudo.

Madrid and País Vasco, the most expensive regions

The regions with the most expensive residential product are also those that suffered the largest decreases in absolute values. In this way, the range between the maximum prices in 2008 and 2009 and the minimum prices reached after the crisis is greater. Such is the case of Madrid, País Vasco and Cataluña.

When the previous crisis began in 2008, the País Vasco was home to the most expensive house prices, but Madrid saw a better recovery, and thus, according to the latest available sales prices, the Community of Madrid leads the ranking. On the other hand, the Canary Islands and the Balearic Islands – regions with the next highest prices after Madrid and País Vasco – have smaller ranges between their maximum and minimum prices, and in both cases, current prices already exceed the peaks seen just before the 2008 crisis.

Where did prices fall by the most last time?

The Autonomous Regions that recorded the greatest drop in prices were La Rioja, Castilla-La Mancha, Aragón and Cataluña, where house prices decreased by more than 40%. Meanwhile, Guadalajara and Toledo were the provinces where prices suffered the largest decreases last time, with collapses of 54% and 53%, respectively. “The large urbanisations of Guadalajara, around the Henares corridor, and Seseña (Toledo) were victims of these sharp price reductions caused by the sudden lack of demand,” says the Data Scientist.

The autonomous cities of Ceuta and Melilla and the Balearic Islands recorded more moderate price drops, with a loss in value of 20% or less.

Andalucía was the mainland region that registered the lowest price drop, with a decrease of only 25% compared to the peaks of 2009.

In terms of the recovery, the islands have performed the best thanks to tourism, second homes and international clients. In both the Balearic Islands and the Canary Islands, current prices are at all-time highs.

On the other hand, Madrid is the mainland region where prices have recovered by the most, with almost 66% of their value now restored compared to the maximum pre-crisis prices. Andalucía is the second region in terms of the recovery of prices, with almost 49% of their value now restored. In this sense, Málaga is the mainland province that has performed the best since the fall, as it has now recovered 85% of the value lost during the previous crisis.

The duration of the fall

Unlike the coronavirus crisis, the crisis that began in 2008 reached different Spanish regions at different times. Then, Aragón was the first region to see a decrease in house prices, specifically, during the third quarter of 2007; and Extremadura was the last to suffer, specifically, during the second quarter of 2011, almost four years later.

In terms of the regions with the most activity, Madrid was the market that began to suffer first, since house prices started to fall there in the first quarter of 2008; it was quickly followed by Cataluña and País Vasco in the second quarter of that same year.

After Ceuta and Melilla, the Canary Islands was the region where the recovery from the crisis began first; there, values bottomed out and began to rise in the third quarter of 2013 – four and a half years after prices first started to fall. In this context, Cataluña and the Community of Valencia were the regions that started to recover next; they began to record price increases in the second quarter of 2014.

Madrid, meanwhile, did not begin its recovery until the third quarter of 2015, almost eight years after the first decreases, from an average of €3,045 per square metre -registered at the end of 2007- to €2,029 per square meter in 2015. Extremadura, the region that was hit the latest, was also the one whose recovery started last. It was not until the second quarter of 2017, when prices there stopped falling and began to grow.

In terms of the duration of the crisis, from the beginning until the end of the price decreases, there was also considerable asymmetry between the different regions: from 4 and a half years in the Canary Islands to eight years in Aragon.

The highest prices, which exceeded €3,000 per square metre, were reached in Madrid and País Vasco in 2008. Those two regions saw the lengthiest decreases, since the price falls -of 33% and 31%, respectively- took seven and a half years in total. Meanwhile, in Cataluña, the decrease in prices was greater, 43% of the peak values reached in 2008, but it was faster, with prices bottoming out there after six years. By province, there was even more variation, since in Álava and Zaragoza the price decreases lasted 10 years, whereas in Santa Cruz de Tenerife, Cáceres and Jaén, they barely lasted four years.

No-one knows how long this crisis will last and many indicators are showing that the regions where coronavirus will have the greatest economic impact are those that are the most dependent on tourism, especially in the short term. “Although that may be true, if the experience of the crisis that began in 2008 has taught us anything, it’s that the regions that recover first and best are the important tourist centres, such as the Balearic Islands, the Canary Islands, Málaga and Alicante,” explains Ramudo.

Prices in the major cities

In the seven most populated municipalities in Spain, the behaviour of the housing market after the bubble burst was relatively similar. Madrid reached its maximum average transaction price earlier than the rest of Spain, in the third quarter of 2007; whereas the Spanish average for that milestone was the first quarter of 2008. Naturally, in other places it was reached later: Valencia, Murcia and Sevilla recorded their peaks in late 2008 and in Malaga the peak was not reached until 2009.

On the other hand, the minimum values were reached between 2013 and 2014 in most regions and since then prices have been rising consistently in the main municipalities.

Strong increase in the sale of new build homes

The years 2007 and 2008 were when the most new-build homes were sold in Spain, with 411,726 such homes transacted. That was also when the percentage of new build sales over total registered transactions reached its peak. Between 2008 and 2009, more than 50% of all sales involved new build homes, a percentage that has gradually decreased until the Covid-19 crisis, although it has remained relatively stable at around 10% since 2016.

In 2016, the new home market bottomed out with just 46,927 transactions registered, representing 11.5% of the more than 409,760 homes that were sold in total (new and second hand). Since then, the number of new homes sold has been increasing slightly, to reach 56,195 operations in 2019.

Had Madrid and Barcelona reached their peaks again?

If we focus on the most important markets, Madrid and Barcelona, we see that in the city of Barcelona, prices reached their peak in mid-2019, at €4,162 per square metre; there, average house prices fell in the last quarter of 2019 to reach €4,131 per square metre. In addition, the volume of transactions has decreased progressively over the last two years – just like in 2008, when prices reached their peak, the number of transactions began to decrease two years earlier.

Furthermore, sales values ​​in Madrid also seem to have peaked, regardless of the health crisis. There, house prices reached €3,362 per square metre during the last quarter of 2019, which was lower than those seen in the previous quarter. Also, the number of transactions registered in 2019 reflected a decrease of 8% compared with 2018.

As we wait for the Ministry of Development to publish data for the first quarter of 2020, and based on the data that does exist, “we observe a slight contraction in transaction values ​​in the main urban centres, which could indicate (leaving aside the consequences of the crisis) a hypothetical fall in prices or at least the stabilisation of them”, says Ramudo.

Moody’s Warns of an Increase in Defaulted Payments in Europe

The depreciation in house prices will put borrowers and their portfolios at risk, and so the volume of doubtful and non-performing loans may increase.

Unsecured loans such as unpaid credit card balances and unsecured consumer loans will be more sensitive to rising unemployment and household debt in Europe as a result of the coronavirus outbreak, according to a report released today by Moody’s.

Consumers who are under financial stress after the Covid-19 crisis are more likely to suspend payments on those loans, said the agency. It also considers that recoveries after default are likely to be low, given the lack of collateral. “The degree of weakening in the performance of the agreement will depend on the sharpness and duration of the recession and the exposure of the transactions to borrowers with a higher probability of interrupted income, such as self-employed workers and temporary contractors,” explains Rodrigo Conde, analyst at Moody’s.

Who are the Key Players in the Spanish Real Estate Market?

4 May 2018 – El Mundo

House sales are on the rise, as are house prices and rentals. Mortgages are also continuing their upward trend. Moreover, the resurgence of real estate activity is now a reality that can be seen in the increase in the number of new construction and real estate companies.

A recent report published by Gedesco, a firm specialising in financing for companies, says that one in four of the businesses created in Spain during the first quarter of 2018 belonged to the construction or property development sectors.

That represented a volume of almost 6,000 companies, 1.75% more than during the same quarter in 2017. With respect to the last three months of last year, the increase amounts to 21.9%.

Some good news to help us try to forget the fact that 142,576 construction companies disappeared between 2008 and January 2017 – both building firms and property developers -, according to the latest data from Spain’s National Institute of Statistics (INE).

In eight years, the sector went from having almost 360,000 companies to having just 216,987, a reduction of 39%. If we take the look at real estate companies, there were 106,375 in 2008, whereas there were just 67,812 by 2017, almost half.

The data compiled by INE reveals another interesting fact: the construction companies that had more than 5,000 employees in 2008 have disappeared. Although there were actually only three (including building firms and property developers), by 2017, there were just nine companies with 500 or more workers.

Names such as Martinsa Fadesa – created by the businessman Fernando Martín-, Astroc (chaired by Enrique Bañuelos) and Nozar went into the history books of the Spanish real estate sector, after failing to survive the impact of the recession.

Good health

Now, the outlook for the sector is looking healthy, in line with the increase in construction activity, which last year recorded a 28.9% increase in new build permits, to 80,786. According to the latest data from the Ministry of Development, corresponding to the first two months of this year, new home permits rose by 17.4% to 8,035 in February. Estimates in the sector indicate an output of 150,000 homes p.a. for the next few years.

For Elisa Valero, Marketing Director at Gedesco, “the construction sector is back in business”. Nevertheless, the director adds that “the creation of businesses has never gone away, if we look back a few years, the property developers were still there, but the volume of business creation was much lower”.

Whereas 5,000 companies are now being created, in 2011 – at the height of the crisis – just 2,000 were being constituted (…).

Success stories

Another report published in recent weeks by the College of Registrars in Spain also shows that real estate activity in the country is gaining momentum. In 2017, the weight of construction companies and property developers over the total number of businesses constituted rose to 20%, and the rate of growth in relation to 2016 was 14%.

But, looking beyond the figures and back to specific cases (…) we see, for example, that two of the largest property developers of the current cycle were created less than three years ago. The firms in question: Neinor Homes and Aedas, which were created in 2015 and 2016, respectively.

The origins of Vía Célere, another of the important property developers these days, dates back to 2007, at the height of the crisis. The firm emerged after Juan Antonio Gómez-Pintado sold the company that he had chaired, Agofer, and created Vía Célere.

In all three cases, the presence of funds in the shareholding of the companies has stimulated their rates of investment to purchase land on which to build new homes.

Second chances

On the list of property developers that have been created recently, highlights include Kronos Homes, Stoneweg and Q21 Real Estate.

There is another noteworthy name on the current panorama, which, although it cannot be considered a new company, is a clear example of the resurgence of a business after the crisis. The company in question is Metrovacesa. Following a facelift by its creditor banks, it returned to the stock market at the beginning of this year, after abandoning it in 2013.

The firm, controlled by BBVA and Santander, stands out since it is the largest landowner in Spain, amongst the listed property developers, with 6.1 million m2 of land spread over the whole country, with the capacity to build 37,500 homes.

Business transformations such as the one involving Metrovacesa were commonplace during the crisis and resulted in the appearance of new players on the real estate stage.

Another illustrative example has been the birth of the so-called servicers. These companies have emerged in recent years from the former real estate subsidiaries of the banks.

Altamira (whose origins are found in Banco Santander), Servihabitat (La Caixa), and Solvia (Banco Sabadell), amongst others, are fulfilling the mission entrusted to them: to take on the bank’s property, enabling them to complete their clean-ups and to divest the assets by taking advantage of the current boom in activity.

The servicers, whose main activity is located in the Community of Madrid, are also responsible for selling the properties of another one of the stars created in recent years: Sareb, commonly known as the bad bank.

In 2018, that company celebrates its 5th birthday, and during its short life, it has taken over the properties of the entities that have been intervened as a result of the bank restructuring (…).

In recent months, Sareb has also started to market its first new build developments constructed on own land that it holds in its portfolio. In addition, last week, it launched a campaign to sell 3,314 homes along the coast, 95% of which will be lived in for the first time by their new owners.

The Socimis

If there is one group of players that stands out above all of the other newly created real estate companies it is the Socimis.

The real estate investment companies started to trade on the Spanish stock exchange in 2012 as a result of a regulatory change introduced by the Government that gave them free reign to do so.

The Socimis Entrecampos and Promorent were the first to make their debuts. Six years on, there are 51 such companies and, according to some estimates, that number may reach 100 in the future. Merlin, Axiare, Hispania, Lar España, Testa and Colonial – the largest by volume – have all been created in the last four years and are now competing with property developers, such as Neinor and Aedas, on the real estate stage and on the stock market.

In April, one of the newest faces, Sareb’s Socimi Témpore, made its debut. In its first month on the Alternative Investment Market (MAB), it has seen its share price appreciate by 3.85%. When it made its stock market debut, the company’s valuation amounted to €152 million (…).

Original story: El Mundo (by María José Gómez-Serranillos)

Translation: Carmel Drake

Aguirre Newman: Tertiary RE Inv’t to Exceed €10bn in 2017

30 November 2017 – Expansión

After the odyssey experienced during the years of the crisis, with the drastic fall in the volume of investment, the tertiary real estate sector in Spain is now going through a stage of consolidation. As such, for the third year in a row, the volume of transactions involving non-residential assets is going to exceed the €10 billion threshold again in 2017.

According to the conclusions of a seminar organised by Aguirre Newman and KWM, which included presentations from some of the main players in the sector, this positive trend will continue for the next few years, despite certain risks in the environment, such as the political uncertainty, the inevitable rise in interest rates in Europe, the ageing population and the salaries that continue to stagnate.

At the meeting, which was attended by the main executives and directors of listed companies such as Merlin, Neinor, Aedas and Colonial, amongst others, as well as by property developers and investors such as Grupo Inmobiliario Roca, Morgan Stanley Investment Management, Grupo Ibosa, ASG Iberia and Stoneweg. Together, they discussed the evolution of the sector and the challenges for 2018, amongst other topics.

“The tertiary investment market is going through a growth consolidation phase after the deep recession that we suffered between 2008 and 2013. According to our estimates, the volume of investment in tertiary assets will exceed €10 billion for the third year in a row in 2017”, explained Susana Rodríguez, Director General of the Consultancy division at Aguirre Newman.

According to data from the consultancy firm corresponding to the first three quarters of this year, hotel assets have been one of the stars of the real estate sector, with investment of €1.9 billion during the 9 months to September, up by 29% YoY. The high street segment also experienced significant growth, of 37%, with an investment volume of €605 million. Whilst, investment in the logistics segment amounted to €665 million, up by 26% YoY. By contrast, investment in offices during the first three quarters decreased by 23% to €1.9 billion and investment in shopping centres decreased by 3% to €3 billion.

Slow down

In terms of the threat of a rise in interest rates in Europe, the experts agree that there will be at least one or two years of stability and that when the time comes for the rate hike, it will be managed in a moderate way: “They do not consider that it will affect the valuation of assets, given that we are in a phase of growing rents”.

Another one of the challenges facing the sector is caused by the political uncertainty generated in Cataluña following 1 October. The speakers agreed that, for another year, the country risk is going to be one of the issues that concerns investors.

Rodríguez said that the figures in the Catalan market are “very positive” at the end of the third quarter. Specifically, the leasing of offices in Barcelona rose by 8% to 265,470 m2 and the average prime rent rose by 9% to €18.25/m2/month.

“It is undeniable that, since October, we have felt a slowdown in the volume of real estate operations. Both business people and investors alike are postponing decision-making whilst they wait to see how the political tensions and uncertainties that are affecting the market today are resolved”, she added.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Núñez i Navarro Invests €45M To Build 166 New Homes

3 May 2017 – Expansión

Núñez I Navarro (NiN) has started its largest real estate development since before the crisis. The development in question is known as the Nou Can Gambús urbanisation, close to Sabadell (Barcelona), and its first phase has a surface area of 23,336 m2. The company is planning to construct 66 family homes and four residential blocks containing 100 flats in total.

During this first phase, the company will spend €45 million, excluding the price of the plots of land. The company, which is owned by the family of FC Barcelona’s former president, Josep Lluís Núñez, acquired the estate years ago in a deal completed in equal part with Anova. During the recession, the property developer took ownership of 100% of the site.

Several months ago, NiN completed the construction of the first row of homes, comprising eight houses, and it has already agreed their sale or rental. Now, NiN has started to build the second row of houses, comprising 16 units in total. The deadline for their completion is the second quarter 2018. The property developer expects to begin construction of the first two residential blocks around that date.

Low level of debt

NiN is one of the largest Catalan property developers and also one of the entities that is best avoiding the economic crisis thanks to its very restrictive indebtedness policy, with debt amounting to zero in the case of some of its developments. The property developer has strengthened its refurbishment business, although it has not stopped building at any time.

The main business of the family company is the real estate sector, comprising homes, commercial premises, warehouses and offices. Its area of influence is Barcelona, although its presence extends across the whole of Cataluña. It also has some parking and hotel businesses.

The market for new homes in the autonomous region is recovering, although more slowly than the sector had expected. The Association of Property Developers of Cataluña (APCE) states that last year construction of 8,313 homes was started. That figure represents a 34% increase compared to 2015 but is 18% lower than the 10,000 new homes that were planned.

Original story: Expansión (Gabriel Trindade)

Translation: Carmel Drake

The Real Estate Recovery Takes Hold In Portugal

15 December 2016 – El Mundo

After several years in crisis, the Portuguese real estate market is booming once again thanks to public auctions of properties and the arrival of overseas buyers, attracted by the tax exemptions and the quality of life.

In Lisbon, Luis Morais, a 43-year old IT teacher, has just acquired an 80 m2 apartment in Sintra, a city close to the capital, for €49,000 in a public auction. The bidding started at €33,000. “It is a bargain” said the IT teacher. “We are not going to live there, we just want to rent out the apartment to supplement our income”, explained Teresa, his partner, aged 36, who teaches mathematics.

The property was confiscated from a family with lots of debt and was owned by the public bank Caixa Geral de Depositos, which decided to auction it off. Like Luis and Teresa, many Portugese people are now choosing to invest in property rather than leave their money in the banks, which are still fragile following the crisis.

Overseas investors are also buying properties in public auctions, such as the case of a three-storey office building in the entre of Lisbon, which was put on the market for €5.1 million.

From recession to recovery

After several years of crisis, the real estate market in Portugal began to improve in 2013 and the recovery accelerated in 2015, thanks to low interest rates, which drove up sales by 27%. Between 2008 and 2012, house prices fell by 30% in Portugal, but they are now soaring again thanks to overseas buyers, attracted by the quality of life in Portugal and the tax exemptions on offer.

The phenomenon is being felt in Lisbon above all. “In two years, prices have risen by 20% and they are still increasing, there is still room for growth” said Pascal Gonçalves, President of Libertas, a property developer.

Recently, a 160 m2 apartment in the popular neighbourhood of Alfama was sold for €420,000, which is twice as much as it was worth ten years ago. And in the heart of the capital, in the neighbourhood of Chiado, a 100 m2 2-bedroom home was recently sold for €900,000, a price that would have seemed very high just a few years ago.

No risk of a bubble

In Oporto, the largest city in the north of the country, the real estate sector is also performing well. “I have doubled my turnover in a year, and I now earn four times as much as when I worked as a biologist”, explained Isabel Leitao, aged 33, who has been working as an estate agent for six years.

During the first nine months of 2016, the activity of the network of real estate agents Century 21 has soared by 36%. Its President for the Iberian Peninsula, Ricardo Sousa, expects “prices to stabilise in Lisbon because they are out of step with the incomes of Portuguese people”.

Nevertheless, according to the Minister for the Economy, Manuel Caldeira Cabral, there is no risk of a real estate bubble. “Prices have increased in Lisbon, but they are still much lower than in Paris or London”.

The average price of an apartment in Lisbon has increased to €3,607/m2, according to the ad website Imovirtual. (…).

Original story: El Mundo

Translation: Carmel Drake

Merlin: The Strong RE Inv’t Figures Will Not Be Repeated In 2016

26 February 2016 – Invertia

In the context of the 2nd Meeting of the Real Estate Sector, organised by the IESE business school, Ismael Clemente (pictured above), the President and CEO of Merlin Properties, explained that the investments made in recent years have been due to the improvement in the economic situation, following years of recession.

In any case, Clemente has said that “we are seeing good things in the market”, but we need to “good governance of the country” to confirm the trend.

“It seems like there is little hope for 2016. We would like our political leaders to have a sanity attack and start reaching agreements”, he said.

With regard to this political instability, he has said that some companies “cannot wait” for the situation to be resolved.

When asked about the future of the sector, Clemente forecast a “slight decrease” in demand for offices and explained that companies depend on the fact that “a proportion of their employees are ‘floating’”, which leads to situations of “overbooking”.

“There are companies with 1,400 employees looking for spaces for 1,000 employees”, he said.

Regarding the refinancing of Testa, Clemente criticised the change in the value of the risk premium, and explained that “the widening of 50% of the risk premium is not good business for anyone”.

In terms of new technologies and the changes that they may generate in the real estate market, Clemente explained that Merlin wants to increase its portfolio of logistics facilities in Spain’s main hubs with a view to supporting the growth of online businesses.

Meanwhile, he also pointed out the (wider) need to adapt to new technologies: “Either we start to adapt ourselves now, in the form of training, or we will end up with the destruction of lots of jobs and, therefore, with fewer consumers”.

Original story: Invertia

Translation: Carmel Drake

Andalucía’s Housing Sector Finally Shows Signs Of Recovery

17 March 2015 – Cinco Días

The region has joined the recovery later due to its poor employment situation.

The autonomous community of Andalucía was undoubtedly one of the hardest hit by the burst of the real estate bubble, due to the weight that holiday homes have traditionally held in the region. Attracted by the influence that the areas of Marbella and the Costa del Sol have had on the rest of the Andalucían coast for decades, Andalucía was no exception and also joined the construction craze and the boom in prices.

In fact, according to figures published by the local Government, led by the socialist Susana Díaz, based on census data compiled by the National Institute for Statistics (INE) and estimates from the Ministry for Development, the total stock of real estate in Andalucía currently amounts to around 4.5 million homes.

If we compare this figure with data from 2001 (population census numbers and housing data are compiled every 10 years), the stock of housing has increased by more than one million homes, which represents a rise of more than 25% in relative terms. This means that, just like in the rest of the country, a significant stock of unsold new homes has accumulated (in Andalucía); some sources estimate (that the stock amounts to) 150,000 properties and others, such as the Spanish Confederation of the Construction Product Manufacturers Association (Cepco) estimated (that the stock amounted to) 114,000 in 2009.

What has happened since then? As in the rest of the country, between 2009 and 2013, construction activity (in Andalucía) virtually ceased, prices experienced the largest slump in recent history and house sales dropped to historical lows, dampened by the poor employment situation and the closure of the credit tap.

Foreign buyers

In this context, sales did not begin to take off again until price reductions started to decelerate and the flow of financing started to slowly open up; and since then, sales have evolved unevenly in each region.

Six years on and Andalucía is not known for being one of the regions where house sales have grown the most or where cranes have begun to appear again, since it is still weighed down by the employment situation, which has not improved there as it has done in other autonomous regions. And this is the case, regardless of the statistics that we analyse.

If we take the most recent statistics (published last Thursday) as a benchmark, which were prepared by the Ministry of Development using data from notaries, house sales in Andalucía grew by 21% during the last quarter of 2014 with respect to the same period in the previous year. These figures are roughly equivalent to the national average (19.5%), however according to the Ministry of Development, seven regions experienced increases that exceeded those recorded in Andalucía.

Meanwhile, if we consider the statistical figures compiled by INE, which obtains its data from the property registers, then house sales in Andalucía increased by just 0.3% year-on-year in 2014, compared with an average rate of increase across Spain of 2.2%. This modest growth in Andalucía contrasts with the recoveries of 18.5% and 12% in terms of real estate sales experienced in the Balearic and Canary Islands, respectively, two other regions that are heavily influenced by holiday homes and purchases by foreigners. Even so, the surplus of new homes in Andalucía had decreased by 44.5% to amount to 63,250 new homes as of last September, according to Cepco.

And where is Andalucía in terms of prices? Again, it worth considering the two sets of statistics that are regarded as ‘official’: those published by the Ministry of Development and INE. The department led by Ana Pastor recently published its price statistics relating to the entire year 2014 (compiled on the basis of appraisal values) and although they showed that house prices (in Spain) increased by an average of 0.5% on a quarter-by-quarter basis (the last quarter in 2014 compared with the previous three months), on an annual basis (fourth quarter 2014 compared with the same period in 2013), the most recent figure was negative, with house prices decreasing by 0.3% at the end of last year.

Nevertheless, Andalucía recorded positive rates in both cases, although the increases were very modest: 0.4% QoQ and 0.2% YoY. By province, five ended 2014 with lower prices than they had recorded a year before. Meanwhile, according to INE’s data (compiled using figures from notaries), Andalucía closed 2014 with an average annual price increase of 1.8%, just one (basis) point below the highest figures, which were recorded in Madrid and Valencia, with annual increases of 2.9% and 2.8%, respectively.

Industry experts agree that the recovery in the real estate market has started later in Andalucía than in other regions, but consider that now is the moment to take advantage of the ‘pull of tourism’ to construct there once again, since there is demand, and that will generate activity and employment.

Original story: Cinco Días (by Raquel Díaz Guijarro)

Translation: Carmel Drake

US Firms Buy Housing In Spain, Raise Rents And Evict Tenants

11 February 2015 – NY Daily News

Major U.S. firms like Blackstone Group, Goldman Sachs, Apollo Management and Cerberus have been quietly buying tens of thousands of residential properties in Madrid and Barcelona at low prices. In New York, advocates for tenants in Spain plan to protest at the headquarters of Blackstone Group.

It’s not just inner city neighborhoods like Harlem and the South Bronx where giant hedge funds have amassed breath-taking numbers of housing units in recent years, then sent rents soaring and sought to evict tens of thousands of longtime tenants.

Major U.S. firms like Blackstone Group, Goldman Sachs, Apollo Management and Cerberus are on a mission to conquer the housing markets of other countries as well, hoping to reap huge profits in the process.

In Spain, for instance, these firms have been vying quietly for two years to gobble up tens of thousands of residential properties in Madrid and Barcelona at fire sale prices.

None has moved more quickly than Blackstone, which is why a group of Spanish emigres in this country has joined with local housing advocates for a planned protest Wednesday outside Blackstone’s Park Ave. headquarters.

Even as unemployment has eased in our own country, Spain remains mired in deep depression — with a 25% unemployment rate, the collapse of several major banks and astronomical budget deficits. Spanish real estate prices remain 40% below their level in 2007. More than 700,000 citizens have fled the country since 2008 and some 3 million housing units sit empty.

Municipal and regional governments have resorted to selling off their small stock of public housing, along with residential mortgages previously issued by the failed banks.

Nearly 42,000 rental and mortgaged units, most of them in Barcelona, were gobbled up by Blackstone, which is already the largest owner of single-family residential housing in the U.S. Goldman Sachs bought another 3,900 units in Madrid.

Meanwhile, a conservative Spanish government made it easier for landlords and mortgage holders to evict residents who fall behind on their payments.

Between 2008 and 2013, more than 327,000 Spaniards were evicted from their homes. The public outcry became so great that a grassroots anti-eviction movement erupted, known as PAH. Thousands of people began squatting in empty apartments. The movement gained so much support that it forced the government to institute a temporary moratorium on evictions.

But just as in gentrifying neighborhoods in this city, new owners still drive up rents and harass tenants or delinquent mortgage holders into leaving, no matter what the law says.

And that’s what Blackstone has done, housing advocates claim.

“It is simply untrue to say that we are driving up rents and seeking to evict residents,” Blackstone spokesman Peter Rose said in an email response.

“We have an extensive series of programs to work with tenants to keep them in their apartments,” Rose added. “So far, only 11 tenants have been asked to leave out of more than 5,000 managed, and only then after a lengthy period of negotiation.”

“They can say what they want, but it’s not true,” said Carlos Macias, a spokesman for PAH.

The tactic of Blackstone and other private equity owners is to raise the rents on unemployed or impoverished Spaniards once their old leases expire. They then allow overdue bills to mount, and pressure tenants to leave, while they wait for the temporary moratorium on evictions to end.

“Those mortgages belonged to the Spanish people,” Macias claims, since Blackstone purchased many at low prices after the Spanish government had already nationalized the bank that issued them. “We’re not going to allow them to take our homes.”

The tenants in Harlem and Bed-Stuy and the South Bronx confronting new age private equity vultures are not alone, is the message coming from Spain

Original story: NY Daily News (by Juan González)

Edited by: Carmel Drake