Tag: region

Construction, the Sector that is Losing the Most Companies and Jobs due to Coronavirus

In March, the construction sector registered a 12.4% monthly drop in the number of companies registered for Social Security purposes, which represented the largest decline of any sector, and which was accompanied by the destruction of 147,701 jobs.

To date, construction is the sector of the Spanish economy that has suffered the greatest losses in terms of companies and jobs due to the Covid-19 coronavirus crisis.

According to data from the Ministry of Employment and Social Security, the construction sector has been the hardest hit in terms of the Spanish labour market, with the greatest losses during the month of March. In this way, between February and March, the number of construction companies registered for Social Security purposes fell by 12.4% compared to an average fall in the wider economy of 6.5%. “In absolute terms, 16,216 companies out of a total of the 131,069 that were registered for Social Security purposes in February ceased to be registered during the month of March,” explains Antonio Ramudo, Data Scientist at Brainsre.

The same goes for employment. During the month of March alone (the lockdown and State of Emergency were introduced on Saturday 14 March), more than 147,000 construction jobs were lost. “If we talk about workers, the construction sector saw a decrease of 16.8% between February and March 2020. In absolute terms, it went from having 881,014 Social Security-affiliated workers to having 733,313 in just one month. As such, 147,701 jobs were destroyed. That represents a 16% decrease compared to the previous year ”, according to the analyst from Brainsre.

The construction sector is not the only one within the real estate market to be hit, albeit to a lesser extent, by the coronavirus crisis. Other companies linked to real estate activities, such as those dedicated to the sale and rental of real estate properties, agents, managers and administrators of real estate have also been affected; they saw a monthly drop of 2.3%. Nevertheless, that was one of the most moderate falls in the Spanish job market where the average reduction between February and March was 6.5%. In absolute terms, 836 companies and almost 3,789 workers ceased being registered for Social Security purposes last month.

Decreases in other sectors

Apart from the direct impact on the construction sector and real estate activities, other sectors linked to real estate have also been affected by the Covid-19 crisis. In this way, the hotel/hospitality industry registered an 11.6% drop in the creation of new companies during March, in other words, it lost more than 20,000 companies and almost 185,000 employees.

Transport and storage suffered a 7.7% decrease in March, with the loss of more than 5,000 companies and more than 35,000 employees. In commerce, the decrease in March was 4.9% with the loss of more than 14,000 companies and more than 86,000 employees.

SMEs and medium-sized companies, the most affected

Within the construction sector, which has gone from having more than 130,000 registered companies for Social Security purposes to having less than 115,000 in a month, the most affected companies have been small and medium-sized companies (those with fewer than 250 workers). There has been a special incidence of companies with between 3 and 250 employees, which have suffered a decrease of between 15% and 21% in their Social Security enrolments, for both companies and workers, accounting for 85% of the jobs lost in the construction sector in March.

In the real estate business, which has gone from having 35,862 registered companies for Social Security purposes to having less than 35,026 in a month, the most affected companies have also been small and medium-sized companies (those with fewer than 250 workers). There has also been a special incidence of companies with between 3 and 250 employees, which have suffered a decrease of between 4% and 10% in their Social Security enrolments, with those companies employing between 50 and 250 workers being the most severely affected.

The same has happened with employment, where companies with between 3 and 250 workers have also been those that have seen the most jobs destroyed during the first month of the coronavirus crisis in Spain, with between 4% and 7% of employees no longer registered.

Andalucía loses 26% of its business fabric

By region, the autonomous community that has seen the greatest impact due to the decline in the number of construction companies has been Andalucía, which has lost 26% of its companies in a month, and 31% of its jobs, with 5,550 fewer companies and 45,198 fewer workers in March.

Other communities severely affected by the Covid-19 crisis include Extremadura, with 22% fewer companies and 28% fewer workers; Castilla La Mancha, where the number of companies has decreased by 19% and the number of workers by 21%; Murcia, with 15% fewer companies and 17% fewer workers; and the Canary Islands, with 13% fewer companies and 17% fewer workers.

In absolute terms, Andalucía is also the region that has lost the most companies and workers in March 2020, having gone from having 20,975 registered companies for Social Security purposes in February to having 15,425 in March and from having 143,808 construction employees registered for Social Security purposes in February to having 98,610 in March.

At the provincial level, 25 provinces have seen a fall of more than 10% of the number of companies registered for Social Security purposes.

That ranking is mainly led by provinces in Andalucía such as Jaén, Córdoba, Granada, Huelva and Sevilla, all of which have been affected by a loss of more than 28% of the companies of this sector. In absolute terms, Madrid is the province that lost the most construction companies in March, 1,703 to be precise; it was followed by Malaga and Seville with 1,337 and 1,293 companies, respectively.

By number of workers, nationwide, the drop amounted to 17% in March compared to the previous month. The five most affected provinces in the sector were again all Andalucían: Cádiz (39%), Jaén (-37%), Córdoba (-35%), Huelva (-35%), Sevilla (-34%).

The least affected cities were Guipúzcoa, Lugo and León. However, in absolute terms, Madrid was the province that lost the most construction jobs in March: 18,108 to be precise; followed by Sevilla and Malaga, which lost 11,504 and 11,465 positions, respectively.

Tinsa: Madrid, Pamplona & Alicante Led Spain’s House Price Rises in Q3

1 October 2018 – Eje Prime

Madrid, Pamplona and Alicante. Those three cities led the ranking in house price rises in Spain during the third quarter of 2018. The Spanish capital topped the podium with price rises in the residential market of 15.6%, although six other large cities in the country also recorded double-digit increases, according to data from the IMIE report compiled by Tinsa.

Along with the Spanish capital, Pamplona and  Alicante saw their house prices soar between June and September, with increases of 14.2% and 13.2%, respectively. Moreover, Palma (de Mallorca) continued to be one of the most expensive markets, after recording a price rise of 12.8% during the period. Meanwhile, in Málaga, house prices rose by 12.5%, Valencia recorded an increase of 12% and Murcia saw a rise of 11.1%.

The report reflects the boom in the provincial capitals, which were key drivers behind the 4.9% increase in new and second-hand house prices in Spain during the third quarter, to €1,317/m2.

With this new increase, house prices in Spain have been rising since the third quarter of 2016. Nevertheless, sources at Tinsa recall that “although the normalisation of the residential market is a general trend, there are still significant differences by region.

By autonomous region, Madrid is the region where house prices rose by the most in the last 12 months, with a rise of 13% in Q3. It was followed by La Rioja, with an increase of 11.8%; the Balearic Islands, with a rise of 9.9%; and Navarra, with growth of 8.7%.

Original story: Eje Prime

Translation: Carmel Drake

Quabit to Invest €20M in Land in Valencia to Build 500 Homes

24 May 2018 – Eje Prime

Quabit Inmobiliaria is strengthening its commitment to Valencia. The listed property developer is going to invest at least €20 million this year in the purchase of buildable land in the autonomous region, where it is planning to build 500 homes. The company is planning to acquire plots in different locations across the region and does not rule out spending up to €30 million if the right opportunities arise.

The company led and controlled by Félix Abánades (pictured above) wants to position itself as a leading player in the Mediterranean region with plots “that allow us to launch promotions immediately”, revealed the director in an interview with València Plaza.

Valencia and the Alicante coast are going to be the markets in the region where Quabit will make the majority of its investments, given that the firm believes that “they have a lot of potential and housing is still cheap there, with scope for business”, according to Abánades.

The capital needed to carry out these operations will be financed, in part, by the capital increase that the company undertook recently and through which it expects to raise up to €63 million.

Quabit’s existing land portfolio in the Community of Valencia totals 126,500 m2, which accounts for 12% of all the land that it owns in Spain. The region is one of the property developer’s major focuses. It also has a significant presence in other coastal regions, such as the province of Málaga, where it owns land with capacity for 2,000 homes.

Original story: Eje Prime

Translation: Carmel Drake

Tinsa: House Prices Rose by 5.4% in April

7 May 2018 – Eje Prime

House prices are continuing to rise unabated. Finished home prices (new and second-hand) rose by 5.4% in April compared with the same month last year, driven by rises in the capitals and large cities, which saw price increases of 8.7% with respect to April 2017, according to Tinsa’s index.

On average, house prices have now risen by 10.3% since the minimum level reached at the beginning of 2015, although they are still 36.7% below the peak of the boom recorded in 2007. Prices along the Mediterranean Coast were the most severely hit during the crisis, given that they have recorded a cumulative decrease of 45.8% since their maximum level.

That region is followed by the cumulative decreases in prices in metropolitan areas (42.8%) and, despite having seen an 18.6% increase in their value since May 2015, prices in large capitals are still 36.6% below their 2007 levels.

The capitals and large cities are still continuing to perform the driving role in terms of the reactivation of the market, together with the metropolitan areas and the Balearic and Canary Islands, where prices have risen by 5.7% and 5.6%, respectively.

Original story: Eje Prime

Translation: Carmel Drake

INE: Foreign Visitors to Spain Rose by 6% in Q1

4 May 2018 – Eje Prime

Tourism in Spain is on a roll. During the first quarter of 2018, 13.7 million overseas visitors came to Spain, up by 6% compared to the same period in the previous year, according to data from the Statistics of Tourist Movements across Borders (Frontur), compiled by Spain’s National Institute of Statistics (INE).

By country of origin, the British were once again the most prevalent tourists in the country between January and March, with 2.9 million visitors of that nationality. They were followed by German visitors, with 1.9 million people. The number of French tourists, the third most frequent visitor group, amounted to 1.7 million people.

The Canary Islands accounted for most of the international tourist visitors to Spain during the first three months of the year, with more than 3.7 million visitors, becoming the autonomous region of choice. Meanwhile, 3.1 million foreigners arrived in Cataluña, and Andalucía was the region that completed the Top 3 most visited during the period, with 1.9 million tourists.

In March alone, the arrival of overseas visitors to the country gained momentum with an increase of 9.6% with respect to the same month last year, to 5.4 million people. This increase contrasts with the rises recorded in January and February, which amounted to 5.2% and 2.6%, respectively.

Original story: Eje Prime

Translation: Carmel Drake

Bankia Plans to Grant €400M Per Year in Property Developer Loans

28 February 2018 – El Confidencial

Talking about property developer loans at Bankia is like mentioning rope in the house of a man who hanged himself. Nevertheless, José Ignacio Goirigolzarri is not only not afraid of the business that took his entity to the brink of bankruptcy, he also wants to become an important player in that segment once again. His aspiration is to reach a market share of between 7% and 8% between now and 2020, which would mean granting more than €400 million per year since then. That is according to the new strategic plan for 2018-2020 presented by the entity on Tuesday. The plan did not excite the market for its forecasts, but rather for the announcement that it is going to return 20% of the bank’s capitalisation to its shareholders.

The President of Bankia estimates that “the real estate development market, in terms of turnover (not balances) is going to amount to between €5 billion and €5.5 billion over the next three years. We aspire to reach a market share in the origination of new loans of between 7% and 8%, from the 0% that we registered at the end of 2017”. The restructuring plan imposed by the European Commission for the entity’s rescue with public money prohibited it from participating in that business until now. “We think that it is reasonable and that we will be able to achieve it”, he added.

This ambition to enter the property developer loan market contrasts with its prudence in terms of retail mortgages, where it expects a decrease of 2.2% during the year. Bankia explains that “mortgages account for a very significant weight, representing around two-thirds of the bank’s total portfolio. It is reasonable for the balance to decrease and for higher quality loans to join the fold”.

These figures are incomparable with those recorded during the real estate bubble that burst in 2008: the entity transferred property developer loans and foreclosed assets to Sareb amounting to €22.3 billion. But the return to this activity by Bankia is nevertheless significant, no matter how much Goirigolzarri assures that “it does not represent a large lever” for future results. Moreover, the President clarified that now the developments are more concentrated both geographically – Madrid, Cataluña, Andalucía and Valencia account for 65% of the total – as well as business-wise – the largest 20% of operators control 25% of the market.

Is it different this time?

(…). According to one source in the sector, “it seems that the banks have emptied their balance sheets of property and are now wanting to fill them up again”. The move is so clear that even the Bank of Spain has issued its first warnings to the sector and has introduced safeguards in the form of the new accounting circular to prevent a repetition of the disaster.

The major argument that the entities are using to justify themselves is one that you always hear before any crisis: “This time it’s different”. “Despite the best moment, the banks are now much more prudent when it comes to granting loans. In the property developer business, for example, we are analysing the feasibility of the project to be financed in great detail, as well as the solvency and professionality of the applicant, who will also have to assume part of the risk associated with the operation”, said one of the big four.

The proposal to return capital attracted more attention than the plan itself

In all other respects, the strategic plan presented on Tuesday did not surprise the market, given that it is less aggressive than those unveiled by the bank’s competitors recently. Basically, Bankia forecasts that its profits will grow to €1.3 billion in 2020 due to: rate hikes (it is the entity that will benefit the most from the forecast increases); even greater synergies with BMN than expected (€190 million vs the €155 million previously announced); and a reduction in toxic assets and in the need to recognise provisions against them. It also expects to increase its market share in all segments, although that will account for less than 20% of its forecast growth.

Original story: El Confidencial (by Eduardo Segovia)

Translation: Carmel Drake

INE: Mortgage Lending Rose by 9.7% in 2017

28 February 2018 – RTVE

The signing of new mortgages for the purchase of homes grew by 9.7% in 2017 with respect to the previous year and reached 310,096 contracts, whereby closing its fourth consecutive year on the rise, after falling non-stop over the previous seven years, since the start of the crisis.

According to provisional data published on Wednesday by Spain’s National Institute of Statistics (INE), the value of all of the new mortgages constituted in 2017 amounted to €36.2 billion, up by 16.6% compared to the previous year, whilst the average amount loaned grew by 6.3% to reach €116,709.

In December alone, 20,681 new mortgage contracts were constituted to buy homes in Spain, a similar figure to the one recorded in the same month in 2016 but almost 17% lower than the figure recorded in November 2017, according to INE.

The average interest rate decreased by 13.5%

At the end of 2017, the average interest rate of mortgages constituted to purchase homes was 2.73%, down by 13.5% compared to December 2016, with an average term of 23 years.

62.5% of the residential mortgages constituted were variable rate products and 37.5% were fixed rate deals. The number of fixed-rate mortgages increased by 4.9% compared to the end of 2016.

The average interest rate at the beginning of a mortgage term is 2.54% for variable rate residential mortgages, down by 18.6% compared to a year earlier. Meanwhile, fixed-rate mortgages have an average rate of 3.13%, down by 3.5% compared to those signed a year earlier.

Greatest increases in Andalucía, Madrid and Cataluña

In terms of the distribution by autonomous region, the areas that recorded the highest number of residential mortgages constituted during 2017 were Andalucía (60,240), the Community of Madrid (56,644) and Cataluña (49.918). The regions where the most capital was lent for the constitution of mortgages were the Community of Madrid (€9.287 billion), Cataluña (€6.894 billion) and Andalucía (€5.898 billion).

The signing of mortgages to purchase homes increased in all autonomous regions last year. The greatest increases were recorded in La Rioja (up by 18.4%), the Community of Madrid (+16.6%) and Asturias (+12.4%). Meanwhile, Aragón (+0.5%), Navarra (+0.7%) and Extremadura (+2.0%) saw the lowest increases.

In addition to mortgages for buying homes, the number of mortgage loans constituted for buying estates in general also rose. In total, during the whole of last year, 429,082 mortgages were signed, up by 7% compared to 2016. The number of mortgages constituted to buy rural estates decreased by 1.6% to reach 16,485 contracts.

The total capital lent for those loans amounted to €60.7 billion, with an average mortgage ticket of €141,445 (up by 5.8%).

Original story: RTVE

Translation: Carmel Drake

Spain’s Mortgage Market Heats Up, Led by Madrid & Barcelona

16 February 2018 – Eje Prime

The mortgage market in Spain is heating up again starting with its traditional strongholds: Community of Madrid and Cataluña. During the 11 months to November, those two regions, together with La Rioja and Cantabria, saw the highest increases in the number of mortgages constituted in the country.

Whilst Congress is still processing a new Mortgage Law, which looks set to introduce important increases in guarantees and transparency for bank users, the number of mortgages is picking up again across the country, with almost 401,000 operations formalised during the first eleven months of last year.

Between January and November, 69,885 new mortgages were signed in the Community of Madrid, according to data from Spain’s National Institute of Statistics (INE). That figure, the second highest in Spain (after Andalucía, the most populated community) represents an increase of 15.7% compared to the same period last year.

In the case of Cataluña, 61,831 mortgages were constituted, up by 10.5% compared to the first eleven months of 2016. Both regions outperformed the evolution across Spain as a whole, where the number of mortgage contracts signed increased by 7.8% between January and November last year.

Nevertheless, the rate of growth in both Cataluña and Madrid was surpassed by La Rioja, which saw an increase of 26.8%. Cantabria also performed well, with a 15.4% increase in the constitution of mortgages during the eleven months to November. Aragón, the Canary Islands, Extremadura and Navarra all saw decreases in the number of mortgages constituted in the period from January to November.

In addition to a rise in the number of mortgages, the average amount of mortgages is also gradually recovering. In November, for example, the average mortgage in the Community of Madrid amounted to €216,137 (the highest amount in the country given the more expensive house prices in that region), up by 9.8% compared to a year earlier. In the case of Cataluña, the average mortgage amounted to €166,191, up by 17.3%.

Far from the pre-crisis levels 

Although the tone of the mortgage market in Spain is recovering, the magnitudes are still well below their pre-crisis levels. In 2006, for example, more than 1.7 million mortgages were constituted in the country between January and November, for a higher average amount.

Since 2006, the average amount of mortgages in the Community of Madrid has fallen by 58.5% and, in the case of Cataluña, the decrease amounts to 58.5%. It just so happens that the decreases in both regions have been lower than the reduction across the country as a whole, where the average mortgage is now 78% lower than it was in 2006.

Original story: Eje Prime (by Jabier Izquierdo)

Translation: Carmel Drake

Servihabitat: House Prices Return to Pre-Crisis Levels in Madrid & Barcelona

13 December 2017 – ABC

The real estate market has definitively overcome the crisis in certain parts of Madrid and Barcelona. According to figures from Servihabitat, house prices in some of those cities’ neighbourhoods are now above the levels seen just before the burst of the property bubble. And according to the real estate servicer, this growth is forecast to continue for the next few quarters at least. House sales will rise by 18% next year to exceed 550,000 operations, thanks to a boost from the sale of second-hand homes. Meanwhile, the price of transactions will rise by 4.7%.

Those are some of the forecasts reflected in the fifth edition of Servihabitat’s report about the “Residential Market in Spain”. The report highlights that house sales will close this year up by 17% and will grow by another 18% next year. The real estate company argues that this improvement is due to factors such as the “increase in solvent demand, policies for granting more credit, the increase in investor interest and the progress in the construction of new homes”.

This recovery will be more homogeneous than in previous years. The improvements in Andalucía, Cataluña and Madrid will be accompanied by increases in other regions such as Castilla-La Mancha and La Rioja, which are expected to record increases of 23.8% and 23.1%, respectively. “The differences between the regions are being mitigated. All towns with more than 100,000 residents are recording strong performances”, explains Julián Cabanillas, CEO of Servihabiat. In his opinion, in 2018, “the trends seen in previous years will be consolidated”.

Nevertheless, the great challenge of this recovery is still how to build enough new homes. Cabanillas acknowledges the fact that “some regions suffer from a lack of stock” for reasons such as a shortage of land, which is pushing up house prices in regions such as Madrid and Cataluña (…).

The impact of tourist housing

It is not only house sales that are expected to continue to rise next year, rental prices are also forecast to increase. Servihabitat highlights the “positive trend” in the rental sector, which according to its calculations will see an average increase of 2% during the second half of 2017.

“Rental has become an increasingly more attractive alternative in Spain, taking into account phenomena such as labour mobility and the upturn in house prices”, explains Cabanillas.

According to Servihabitat, the average yield on rental housing is 5.5%. In certain regions, such as Cataluña, the figure exceeds 6%. In this segment, the real estate company highlights the impact that tourist apartments are having on the market since they are leading to two-digit rises in rental prices in certain cities.

“It is a practice that is developing fast and that needs to be controlled somehow”, explains the CEO of Servihabiat, who points out that the rise in the rental market in recent months has not only been caused by the impact of tourist apartments, but rather by a “combination of factors”.

Original story: ABC (by Guillermo Ginés)

Translation: Carmel Drake

Servihabitat: Rental Prices Will Rise By 2% Before Year End

26 October 2017 – La Vanguardia

Residential rental prices will rise by 2% on average in Spain during the second half of the year, according to the third edition of the “Residential rental market in Spain” report, compiled by Servihabitat, which also forecasts that the trend will continue to be “positive” into the beginning of 2018, despite the fact that some provinces “have stalled”.

The platform says that greater geographical mobility, the popularity of the rental culture amongst young people and the impact of tourism are the factors that are continuing to drive up rental property prices.

In this way, according to Servihabitat’s data, almost 70% of renters in its areas of operation are aged between 26 and 35 years, a figure that increases to 90% if that range is extended to include people aged up to 40 years old.

Currently, 52.3% of homes that are rented out are found in buildings with 10 or more homes; 66.1% are between 46 m2 and 90 m2; and 56.4% were constructed more than 35 years ago.

The average time that it takes to rent a home from when it becomes available on the market has decreased from just over two months on average in Spain to 1.7 months, in just six months.

Nevertheless, in the autonomous regions of Cataluña and Madrid, it takes a maximum of 1.5 months to rent out a home. In fact, in cities such as Madrid and Barcelona, the lag time can be as short as a few days.

Spain currently has 97,900 rental homes available, down by 17.5% compared to a year ago. In other words, there are currently 2.5 homes on offer for every 1,000 inhabitants or 5.3 properties for every 1,000 households.

Servihabitat believes that the progressive reduction in available homes is explained by a reduction in the average length of time it takes to rent out a home and due to “the shortage of residential stock being allocated to  the rental market”.

Supply is most abundant, taking into account the population and the number of households, in provinces such as Salamanca, Alicante, Ciudad Real, Segovia, Burgos and Cantabria.

The following autonomous regions have a supply of more than 13,000 homes: Andalucía, Comunidad Valenciana, Cataluña, Cantabria, Castilla y León and Castilla-La Mancha.

Spain’s most expensive regions: Balearic Islands, Madrid and País Vasco

On the basis of price per square metre, the Balearic Islands, Madrid and País Vasco are the regions where the average rental price is the highest.

In general, in Spain, the average price of a home measuring between 80 m2 and 90 m2 is €620, up by 3.3% compared to 6 months ago.

The average gross return from rental homes in Spain amounts to 5.5%, a figure that is even higher in the autonomous regions of Cataluña (6.1%), Madrid and the Balearic Islands (5.8%) and the Canary Islands (5.7%).

The study also highlights that the evolution of the rental market in Spain is characterised by “a positive trend, although it displays different behaviours depending on the region analysed”.

In this way, Servihabitat considers that the proposals aimed at increasing the stock of public housing for rent will contribute to a “greater equilibrium” between the purchase and rental markets as residential options in the country.

The Director-General of Servihabitat’s real estate business, Juan Carlos Álvarez, believes that the rental market represents an “attractive prospect for the arrival of new investors dedicated to this activity in Spain”, but he considers that the trend in the future will involve “necessary regulation” to protects both landlords and tenants alike.

He also thinks that this regulation should be accompanied by “a strong commitment” to the rental market by institutions, through a “decided” institutional investment in the rental market.

Original story: La Vanguardia

Translation: Carmel Drake