Notaries: House Sales Rose by 7.6% in Q1 2018

16 July 2018 – Eje Prime

There has been a slight cooling off in terms of residential transactions. House sales rose by just 7.6% during the first quarter of 2018, representing a “small deceleration” in YoY growth with respect to previous quarters, which have been exceeding 10%, according to the General Council of Notaries.

House transactions rose in the majority of the autonomous regions, led by La Rioja, with an increase of 22.6%. It was followed by Murcia (+20.9%) and the Community of Valencia (+18.5%). At the opposite end of the spectrum were the Balearic Islands (-8.1%), the Canary Islands (-2.4%) and Extremadura (-1.2%).

As with the volume of operations, prices also showed signs of a decelerating trend, although they did rise by 1.4% on average. The national average price amounted to €1,377/m2, whilst in País Vasco, the Balearic Islands, Madrid, Cataluña and the Canary Islands, prices exceeded the average, at €2,208/m2, €2,157/m2, €2,146/m2, €1,646/m2 and €1,490/m2, respectively.

In addition, the sale of flats grew by 6.9% during the first quarter, somewhat lower than the increases of more than 10% seen in the previous eight quarters.

On the other hand, according to the General Council of Notaries, the “significant” increase in the number of mortgage loans to acquire homes, seen last year, continued at the national level (+10.9%) during the first quarter.

Original story: Eje Prime

Translation: Carmel Drake

Property Developer Urbas Records a Loss of €354k in Q1

15 May 2018 – Eje Prime

The Urbas Financial Group is in the red. The company recorded a negative net consolidated result of €354,000 during Q1, which represented a decrease from the profit of €1.05 million that it recorded in the first quarter of 2017, according to Spain’s National Securities and Exchange Commission (CNMV).

The Group’s total debt with banks decreased by 2.4% in March to €122.6 million. Urbas’s land portfolio spanned 18 million m2 at the end of the first quarter. Of the real estate company’s total surface area, 73% corresponds to rural land, 25% to buildable land and 2% to urban land.

Most of the land bank that the Group owns is located in the Community of Valencia, which accounts for 34.8% of the company’s portfolio. That region is followed by Madrid with 20.5% of the total; Andalucía with 17%; and Castilla La Mancha with 14%, which are the other three regions where the company’s land is concentrated. It also owns plots in Murcia, Castilla y León and several other autonomous regions.

In 2017, Urbas increased its profit by 8.8% to exceed €5 million. The group recorded revenues of €4.2 million, which represented an increase of 40% with respect to 2016, and also generated positive EBITDA.

Original story: Eje Prime

Translation: Carmel Drake

Registrars: Mortgage Lending Increased by 10.9% in 2017

23 April 2018 – Eje Prime

The number of mortgages signed to buy homes in Spain during 2017 rose by 10.9% with respect to 2016. According to the Real Estate Yearbook 2017 from the College of Registrars, 310,640 mortgage loans were signed, a figure that represents an increase of 56% compared to the minimum level recorded in 2013. But, despite that significant gain, the figure is still well below the 1.3 million mortgages signed in 2006.

The study reveals that the number of residential mortgages increased in every autonomous region last year, with double-digit growth rates in eight of them. The largest increases were recorded in the Community of Madrid (17.8%), La Rioja (17.8%), Asturias (16.5%), Andalucía (11.7%), Cantabria (11.5%) and the Community of Valencia (11.3%). The regions where the greatest volume of mortgages were signed included Andalucía (60,026), the Community of Madrid (56,866), Cataluña (50,848) and the Community of Valencia (32,408).

In addition to domestic buyers, international purchasers also become more active. In fact, 6.9% of the residential mortgages signed last year were formalised by foreigners, exceeding 21,000 contracts in absolute terms, although three times as many overseas buyers purchased a home in Spain without any financing at all.

The nationalities with the highest percentage weight in terms of residential mortgages signed over the total number of mortgages formalised by foreigners were Romanian (11.6%), British (9.3%), Chinese (8.4%), Italian (5.8%), French (4.6%), Moroccan (4.2%) and German (4%).

Original story: Eje Prime 

Translation: Carmel Drake

324,000 New Homes Still Not Sold 10 Years On

13 July 2017 – La Vanguardia

At the end of this year, a decade after the real estate bubble burst, the number of new homes constructed during the boom that are still left unsold will amount to 324,000, according to a report on the Residential Market in Spain prepared by Servihabitat.

The stock of unsold homes is gradually decreasing: it shrank by 18.6% last year to 394,000 homes and sales are accelerating this year, in such a way that an additional 17.8% decrease is forecast by year end. “There is still stock is the areas where there has not been much demand for housing in recent years”.

But purchases are rising and in the majority of areas, the numbers may reach the technical stock level, typical of a healthy market, within a few years, said Julián Cabanillas, CEO at Servihabitat.

Homes are now being sold at a good rate even in the most depressed areas

The report prepared by the firm indicates that the majority of the unsold homes are concentrated in Castilla y León, Castilla-La Mancha, La Rioja, Cantabria, Murcia and the Comunidad Valenciana. “In some towns in Toledo, with large housing developments, there are four or five times as many homes as there are local inhabitants; there, it is hard to imagine that these homes will be absorbed and it is possible that the developments that were half-finished will have to be demolished”, he acknowledges. According to Cabanillas, the technical stock should amount to around 165,000 homes.

The absorption of new homes is happening in a very heterogeneous way. In Andalucía, where 90,000 homes will be sold this year, there are still 35,000 unsold homes leftover from the boom “which will be absorbed within a couple of years”. By contrast, in the Comunidad Valenciana, where the stock of unsold homes stands at 100,000, sales are forecast to amount to just 60,000 this year, and so the unsold homes will not be absorbed for another 5 or 6 years.

According to Cabanillas, the situation is very different in Cataluña, where less than 10,000 unsold new homes are left, which means that, in his opinion, “the market has already normalised there”. In his view, there are still some “specific and very localised areas of depression”, such as parts of Lleida, the south of Tarragona, Terrassa and Salt. By contrast, the stock in Barcelona “falls below the technical stock level”, which is leading to a lack of housing, new developments and land, which is putting pressure on prices and driving out the local population”. In his opinion, the differences between areas reflect the fact that some areas “are less appealing and that is a structural factor that will continue to exist”.

According to the servicer’s data, the sale of homes will grow by more than 17% in Cataluña this year, to exceed 78,250 units sold, whilst in Spain as a whole, the figure will reach 465,000 operations, representing an increase of 15.2% (…).

Original story: La Vanguardia (by Rosa Salvador)

Translation: Carmel Drake

Donpiso Will Open 50 New Offices In 2017

30 January 2017 – Expansión

The real estate broker Donpiso will open between 40 and 50 new offices this year, with the aim of strengthening its commercial network in the Spanish market. The company opened 30 new offices last year and brokered operations worth €375 million in total, up by 76% compared with the previous year (€213.4 million). In 2014, its brokered volumes amounted to €139.4 million. The company brokered 2,503 operations last year, almost twice as many as during the previous year.

Donpiso’s plans include having 120 offices in its network by the end of the year. Most of the new offices will be opened in the Community of Madrid, the Community of Valencia, País Vasco, Andalucía and the Canary Islands.

Last year, the most significant increase in terms of office numbers was seen in Cataluña, where the firm’s central headquarters are located.

The company’s expansion is based on a mixed model. Of the new offices opened in 2016, eight were owned offices and 22 were franchises. This year, the firm wants to maintain the same proportion, and whereby exert full control over c. 25% of its offices.

Donpiso, which recorded turnover of €7.5 million last year, will invest €2.5 million on its expansion plans, of which €500,000 will be allocated to opening its own offices and the remainder to its franchises. The company will recruit 120 workers during this process.

The company is also constructing 13 urban developments, all of which are in different phases of progress. Its developments are mainly located in Barcelona, as well as in towns in the Catalan capital’s metropolitan area, such as Badalona, Sabadell and Cornellà.

Recovery

The firm has enjoyed a progressive recovery since 2009, when the current Director General, Luis Pérez, acquired the Donpiso brand for €1 million.

The company, which was owned by Ferrovial until 2006 and by Habitat for the next three years, had a network of almost 400 offices across the Spanish market before the crisis hit.

Original story: Expansión (by E. Galián)

Translation: Carmel Drake

Sareb Puts Its First 700 Finished Homes Up For Sale

7 October 2016 – Expansión

Sareb has put the first 700 homes on the market that it has now completed after it acquired unfinished properties from various nationalised banking institutions when it was created.

According to a statement published yesterday by the entity, 34 developments are being sold in total, containing 700 homes, whose prices will range from €32,000 for the cheapest to €390,000 for the most expensive.

The homes finished by Sareb are located in nine autonomous regions: Asturias, Cantabria, Castilla-La Mancha, Castilla y León, Cataluña, Comunidad Valenciana, Galicia, La Rioja and La Comunidad de Madrid.

These properties, together with another 1,300 newly built homes, form part of the “Casas de Estreno” campaign launched by Sareb, which explained that the managers that support the company (Altamira Asset Management, Haya Real Estate, Servihabitat and Solvia) will be responsible for marketing all of these assets.

Strategy

Information about the homes can be found on the website www.sarebcasasdeestreno.es. It contains the basic details of each home along with photos.

“The completion of the unfinished construction work, in places where there is demand, forms part of Sareb’s strategy to maximise the value of the assets it received and fulfil its divestment mandate in the most efficient way” said the Director of Direct Management at Sareb, Juan Dios.

The region with the most homes for sale in this new portfolio is Cataluña, which accounts for almost 200 homes. The majority, 114, are located in Barcelona. There are also lots of flats for sale in the Community of Valencia, where Sareb has completed seven developments containing 170 homes, of which 108 are located in the province of Valencia.

In Asturias, the company has completed a development containing 112 homes and in Castilla y León, it will put almost 100 homes up for sale in the province of Cuidad Real.

Original story: Expansión

Translation: Carmel Drake

As House Sales Rise & Stocks Fall, Should We Build More Homes?

3 June 2016 – Idealista

In 2016, the number of house sales is forecast to rise by 10% to 440,000 operations, almost 40,000 more than last year. This increase in the volume of transactions is also expected to result in a 25% reduction in the stock of unsold new homes, without exerting excessive pressure on house prices, which are predicted to rise by 3.8%. That is the outlook described by Servihabitat for the next few months. (…).

In this vein, the number of unsold new homes has been gradually decreasing in recent years. According to Servihabitat, the stock will decrease by 125,000 properties during 2016, to 367,500, which represents a decrease of 25% compared with 2015. By contrast, construction of 44,600 homes will be started this year and another 50,800 residential properties will be finished.

The statistics have opened a debate over whether the rate of residential construction should be increased or not. Like everything in this life, it depends. The post-crisis real estate market is moving at double speed and, whilst in some places everything that is being built is being sold; in other areas, there is barely any demand and there is a huge stock of homes constructed during the boom years, for which there are no buyers.

“The reduction in stock is not uniform across the country. The major cities have experienced a gradual reduction in the number of homes up for sale to reach the so-called technical stock”, explained Juan Carlos Álvarez, Director General of the Real Estate Business at Servihabitat.

That means that in the autonomous regions of Madrid and Cataluña, the difference between finished homes and new homes sold amounts to a balanced figure of 1,000 units. The forecasts show that the stock of new homes in Madrid will decrease by 64.2% this year, to 4,792 homes. In the case of Cataluña, the reduction will amount to 23.3%, leaving 10,553 recently constructed homes.

There is little doubt that in certain areas of the major capitals, everything that is being built is being sold. “Nevertheless, that is not happening in the metropolitan areas or peripheral towns. There is still an abundant stock in some areas that will be difficult to get rid of, given that current and potential demand is not looking for new homes in those areas”, says Álvarez.

For that reason, we need to differentiate between pre-crisis stock – which is generally poorly located, has little demand and is very difficult to sell – and the post-crisis stock, which is better placed and has better sales prospects. (…).

The problem of uncertainty

Although the data is positive and, according to Julián Cabanillas, “the current political uncertainty is not affecting the sector”, the CEO of Servihabitat identifies a problem that may weigh down on the good performance of the real estate market, “which is the sensitivity to the legal uncertainty that results from the lack of homogeneity in decision making by local and regional governments, which affects investors’ interest in real estate. (…).

Sources in the sector say that since the new government arrived in the Town Hall of Madrid, the time it takes to obtain the necessary permits to begin construction of housing developments has doubled “from four months to eight”, which represents a huge cost for property developers and which inevitably impacts the final price of homes.

Servihabitat is calling for the different authorities to employ “greater balance in the protection of the rights and duties of all agents in the market and a greater balance in terms of decision making”.

Original story: Idealista (by David Marrero)

Translation: Carmel Drake

Madrid & Barcelona: Drivers Of The Housing Mini-Boom

4 January 2016 – Expansión

The housing market is now in full recovery mode, driven by the improving labour market and access to credit. House prices rose by 1% in 2015, which represented the first year of positive growth following seven years of decreases. Specifically, the average price per square metre increased by 1% between Q4 2015 and the same period a year earlier, according to Tinsa’s Local Markets Index. This put an end to the decreases seen following the burst of the real estate bubble during which time house prices decreased by 40.7%, compared with their levels in 2007.

According to Tinsa’s report, this 1% increase was driven by a miniboom in the large urban markets of Barcelona and Madrid, which accounted for the majority of the overall upward swing, together with other smaller cities such as Badajoz and Ávila. Thus, the Catalan capital recorded a 8.7% increase, whilst prices in Madrid rose by 3.8%. Significant increases were also registered in Badajoz (5.7%), Ávila (4.3%), Ciudad Real and Cuenca (3.3% in both cases) and Palma de Mallorca (2.2%).

According to the experts, several factors have led to the relatively sharp rise in house prices in these areas, such as the decrease in the volume of stock and the increase in demand. On the other hand, these areas have fewer remaining unsold homes, which means that demand is pushing prices up much more quickly. Unsurprisingly, Madrid is one of the most liquid markets in Spain, according to Tinsa, since it only takes 7.2 months, on average, to sell a home in the province, compared with 10.2 months for Spain as a whole. In addition, Madrid and Barcelona are both highly attractive areas, with demand from overseas savers and other citizens moving from the rest of Spain and overseas to work in the two cities.

Both areas have also seen a marked adjustment in terms of prices in recent years. In 2007, locals in Barcelona used to have to spend 36% of their average incomes on mortgage repayments, making it one of the most expensive cities in Spain; now, they have to contribute just 22% of their salaries, in line with the national average. In Madrid, that figure is one point lower (at 21%) and it only takes 5.3 years of salary to acquire an average home there, compared with 5.9 years for Spain as a whole.

Nevertheless, this is not the case in all of Spain’s large capital cities. Valencia recorded timid growth of 0.6% in 2015, whilst prices in Sevilla fell by 0.3%. The decreases amounted to 1.6% in the case of Bilbao, to 4% in Zaragoza and 6.7% in Murcia, still heavily affected by the surplus stock.

The striking variations between Spain’s major capitals is also reflected by the marked differences that exist between the different types of market in Spain, given that the majority of the country is still experiencing price decreases, or at best, price stability. That is one of the reasons why Tinsa prefers to talk about “a trend towards price stabilisation, which will be consolidated over the coming year”, rather than a general upturn in prices. (…).

Original story: Expansión (by Pablo Cerezal)

Translation: Carmel Drake