26 Spanish Real Estate Experts Share Their Predictions for 2018

6 January 2018 – Expansión

House prices will rise by more than 5% on average this year, with increases of more than 10% in the large cities. These gains will happen in a context of great dynamism in the market, in which house sales will grow by more than 10% to exceed 550,000 transactions. Rental prices will also continue to rise.

Those are just some of the predictions made by 26 real estate experts for Expansión.

Aguirre Newman: “House prices will grow by more than 10% in Madrid and Barcelona”.

“In our opinion, house prices are going to continue to rise in 2018, reaching average growth rates of 6%-7%”, says Juan Riestra (pictured above, top row, second from left), Director of the Residential Area at Aguirre Newman. “In Madrid, Barcelona and the coastal cities, we expect to see double-digit growth, driven by the supply of new homes that the property developers have announced, which will result in an even more intense increase in prices than seen in 2017 since new build home are typically more expensive than second-hand properties”, he adds (…).

Fotocasa: “New build homes will have a higher profile in 2018”.

“New build homes will have a higher profile in 2018, as we have already seen during the last quarter of 2017. And that, combined with the return of confidence to the housing market, will continue to push prices up if the economic context is maintained and the situation in Cataluña is resolved”, says Beatriz Toribio (pictured above, bottom row, second from left), from Fotocasa, who thinks that this effect will drive up house prices by more than 5%, but not reaching double-digits (…).

Universitat Pompreu Fabra: “Everything depends on the situation in Cataluña”.

“The upward momentum in the market will be accentuated in 2018 due to the improvement in the new build market since the homes that started to be built two years ago are now being sold”, said José García Montalvo (pictured above, top row, second from right), Professor of Economics at the Universitat Pompeu Fabra. “The major change is that new homes now account for 20% of the market, whilst before they represented 60%” (…). But “everything depends on the political uncertainty in Cataluña” (…).

Arcano: “Demand for investment in housing will continue to grow”.

“There is still a very significant imbalance in terms of demand, spurred on by the ECB’s policy and labour improvement, and a supply that is still restricted by the very low level of new house starts. Moreover, demand for housing as an investment will continue to grow. In this context, prices will rise by more than 5%”, says Ignacio de la Torre, Chief Economist at Arcano (…).

Notaries’ Centre for Statistical Information: “We expect house prices to increase by more than 5%”.

“On the basis of our analysis of the available information, we expect house prices to grow by between 5% and 10% in 2018 (…). Although we expect the housing stock to increase, due to greater investment and employment in construction in recent months, which may lead to price rises being contained, we also expect an increase in demand, given the dynamism of economic activity and the behaviour observed in the labour market”, says Milagros Avedillo, at the Notaries’ Centre for Statistical Information. In her opinion, the growth in mortgage loans will be single-digit.

Asprima: “Very few new homes will be built”.

“I don’t think that the volume of transactions will increase by more than 10% and the forecast for price growth will be below 5%”, says Carolina Roca, Vice-President of Asprima. “The most important macro-factor is income”, she laments. Therefore, prices cannot rise by much, in her opinion, although they will increase in certain areas. “New builds will recover in 2018, but not by much (…)”.

Tinsa: “The reduction in the unemployment rate will boost the market”.

“The residential market will record moderate price growth in 2018 (of between 3% and 4%), similar to that seen in 2017, with different speeds, depending on the region”, says Pedro Soria (pictured above, bottom row, second from right), Commercial Director at the appraisal company Tinsa. “The recovery will expand to more areas; the large capitals will continue to be the drivers, although the rate of growth will soften”, he adds. “The reduction in the unemployment rate and continuing investor interest, due to the prolongation of the low-interest rates, will increase house sales by between 10% and 15% (…).

Sociedad de Tasación: “New house prices will rise by 5.4%”.

“Applying our predictive model to the data from the Ministry of Development, we estimate that 14.1% more house sales will be completed in 2018 than in 2017 (…)”, says Consuelo Villanueva (pictured above, top row, far left), Director of Institutions and Key Accounts at Sociedad de Tasación. “The result (…) indicates growth of 5.4% in the price of new homes under construction for the average of provincial capitals in 2018 (…)”.

Gesvalt: “Mortgage lending will rise by around 15%”.

“According to the forecasts at Gesvalt, we predict moderate growth in second-hand house prices of around 5% at the national level, although there will be notable differences between provinces”, says Sandra Daza (pictured above, bottom row, far right), Director General at Gesvalt. (…). And by how much will mortgage lending grow? “By around 15% and there will be a slight increase in the number of mortgages that exceed 80% of the total property value”.

Foundation of Real Estate Research: “The political uncertainty will weigh down on Barcelona”.

The President of the Foundation of Real Estate Research, Julio Gil, believes that house prices will rise by “between 0% and 5% in 2018. “We will move to a three-speed market”, he thinks, referring to consolidated areas, cities in recovery and provinces with a surplus supply and/or limited demand. “And I think that Barcelona will perform less well than Madrid, weighed down by the political uncertainty”, he adds (…).

Pisos.com. “Mortgage lending will rise by more than 10% for the fourth consecutive year”.

According to Ferran Font, Head of Research at Pisos.com (…) “Historically low interest rates and the decrease in unemployment mean that we expect mortgage lending to grow at double-digit rates in 2018, like it has done for the last three years”.

General Council of Real Estate Agents: “The rise in rents will lead to tension in sales prices”.

“House prices will grow by around 5% in 2018, driven more by the refuge effect of savings than by objective economic variables”, says the President of the General Council of Real Estate Agents, Diego Galiano. “Savings are not being rewards and housing is recovering a certain degree of stability and offering good prospects for investors (…)”.

TecniTasa: “Prices will grow by around 5%”.

“On average in Spain, we estimate price growth of around 5%, but we highlight that that figure represents an average of a very heterogeneous market, by area and asset class. In some regions and for certain types of high-end homes, the increase will amount to between 5% and 10%, and may even exceed 10% (for example, in the Balearic Islands). Whilst in small towns and for cheaper homes, prices are barely expected to rise at all in 2018”, says José María Basáñez, President of TecniTasa (…).

Civislend: “The mortgage war will intensify”.

“The growth that we will see in terms of mortgage lending is going to continue to reflect double-digit rates and the war in terms of granting loans by financial institutions is going to intensify”, says Manuel Gandarias, Director and Founder of the real estate crowdlending platform Civislend (…).

Acuña & Asociados: “80% of sales will be made in 400 towns”.

“Given the current situation, the expected growth in prices at the national level for 2018 will amount to around 5.5%”, forecasts Luis Rodríguez de Acuña. However, “demand for housing is not behaving in a homogenous way across the country, and transactions are only being recorded in 1,300 of Spain’s 8,125 municipalities”. In other words, in one out of every six. And 80% of transactions “are being closed in just 400 municipalities (…)”. (…).

CBRE: “The sale of new homes will continue to gain weight”.

The value of homes will increase “by around 5% YoY at the national level, with higher rises (between 7% and 10%) in certain markets such as Madrid, Valencia, Málaga and the Balearic Islands”, predicts Samuel Población (pictured above, top row, far right), National Director of Residential and Land at CBRE (…). “Sales of new build homes are going to increase their relative weight (with respect to second-hand homes) as a result of the recovery in construction output; nevertheless, the recovery will not have an immediate impact on transaction volumes given the time lag associated with new build developments”, he says.

BDO: The land market is preventing soaring construction output”.

“We are facing a very favourable macro context (GDP and employment, above all) and therefore, an upwards cycle is likely, which will have different regional rates”, explains Alberto Prieto, at BDO. (…). “The launch of new build projects by the new large players will start to be felt in 2018, and then more intensely in 2019”, he adds. “The situation in the land market makes it unfeasible for the volume of new build homes to soar for the time being”, he says.

Foro Consultores Inmobiliarios: “Fixed-rate mortgages will play an important role”.

Carlos Smerdou, CEO at Foro Consultores, believes that “new build homes will drive the market and that recent land transactions indicate that the trend in terms of prices will be upward, of between 5% and 10%” (…). In terms of fixed-rate mortgages, “they will play an important role”, despite the fact that “interest rates are forecast to remain negative”.

MAR Real Estate: “Banks are still reluctant to grant the necessary financing”.

Rosario Martín Jerónimo, representative of MAR Real Estate in Marbella, believes that house prices will grow by more than 5% in Spain this year, on average (…). Nevertheless, she does not think that sales or mortgage lending will be as high in 2018 as they were in 2017 and that the growth rates will remain below 10% in both cases. “Buyers are willing but the financial institutions are still very reluctant to grant the necessary financing”, she explains. “Many property developers are completely financing their projects using money from private investors/buyers, without any support from the bank”, she says (…).

uDA (urban Data Analytics); “Prices will rise by more than 10% in the large cities”.

“House prices will rise by around 6.9% in 2018, although the behaviour will be tremendously heterogeneous”, warns Carlos Olmos, Director of urban Data Analytics. In other words, there will be “some large cities with growth rates of more than 10% and many other capitals with small decreases” (…).

Gonzalo Bernardos, Professor of Economic: “House prices will rise by 11% and sales volumes by 23%”.

“I think that house prices will rise by 11%”, says Gonzalo Bernardos, Director of the Real Estate Masters at the Universidad de Barcelona (…). Moreover, in macroeconomic terms, it is the best scenario for the residential market: high (economic) growth (around 3%), the creation of employment, scarce new build supply (new build permits will amount to 125,000 in 2018), very low interest rates and bank willingness to grant mortgages”. “House sales will rise by around 23% and mortgage lending will increase by 17%”.

Irea: “House prices will rise by more than 7% in consolidated markets”.

Mikel Echavarren (pictured above, bottom row, far left), CEO of the real estate consultancy and advisory firm Irea, forecasts that house prices will rise by between 5% and 10% in 2018 with respect to 2017. “In consolidated markets, the increases will be closer to 7%”. (…). In the mortgage market (…), “in theory, financing conditions will continue to be very beneficial for buyers and property developers”, he adds.

College of Registrars: “Mortgage lending will grow by around 20%”.

The registrars believe that house prices will rise by less than 5%. “Taking into account our data and the slowdown that is already being seen in Cataluña, which accounts for approximately 17%-18% of the Spanish housing market (…), we think that it will be hard to exceed a growth rate of 5% in 2018”, explains Fernando Acedo Rico, Director of Institutional Relations at the College of Registrars. (…). Something similar will happen with mortgage lending, which “will continue to grow at around 20%”.

Idealista.com: “Madrid will drive the price rises”.

According to Fernando Encinar, Head of Research at the real estate portal Idealista, house prices will rise by less than 5%. (…). “There will be cities that will experience a more acute recovery, such as Málaga, Valencia, Sevilla and the islands. But I think that Madrid is going to be the real driver, with even more accelerated price growth”. Why? “The Spanish capital is gobbling up talent and investment, and demand there indicates that prices are going to continue to rise. There is minimal stock left in Madrid (…)”.

Instituto de Práctica Empresarial: “In 2018, 550,000 homes will be sold in Spain”.

According to the Director of the Real Estate Chair of the Instituto de Práctica Empresarial, house prices will rise by 6.1% in 2018 (…). In Spain, 550,374 homes will be sold, which represents 14.5% more than in 2017, despite the sluggishness that may be seen in Cataluña.

Invermax: “Tourist areas may see price rises of 10%”.

Jesús Martí, Real Estate Analyst at Invermax, thinks that “house prices will grow by another 5%, with this average varying between the large cities and the traditionally touristy coastal areas, where they may rise by 10%”. “It is still a good time to buy a home, especially for investors”, he adds (…).

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

Buy-To-Let Properties Generate Returns Of 10%+ In Spain’s Large Cities

30 May 2017 – Expansión

Buy to let / The gross annual return from buying a home and putting it up for rent amounted to 4.3% in the first quarter of 2017, according to the Bank of Spain. If we add to that the fact that the price per square metre rose more sharply than during the previous quarter, then the total return exceeds 9%. And the equivalent figures are in the double digits in the largest provincial capitals.

After seven years of crisis and three years of recovery, investment in housing is now enjoying a new golden age. Without the excesses of yesteryear and with the lesson of the bubble very much learned, professionals and individuals alike have set their sights on the residential sector once again as the generator of profits. (…).

The major indicator in the sector nowadays is not so much house prices – which are still important – but rather returns. In the main Spanish provincial capitals, the average gross yield from rental homes is 5.93%, according to a study of the yield on rental homes in 2017, compiled by Invermax. (…).

That 5.93% is higher than the overall average for Spain, which amounted to 4.3% in the first quarter of the year, according to the Bank of Spain. If to this return, we add capital gains, the average gross rate of return per annum increases to more than 10% in Spain. To calculate the return from capital gains, the Bank of Spain uses house price data from INE, which will be published on 8 June. But, taking into account the registrars’ statistics, which revealed an increase of 7.7%, the analysts are convinced that the average return, including capital gains, now exceeds 9%. Moreover, in the large cities, these figures are comfortably in the double digits. For example, the annual return in Barcelona is 17.7% and in Madrid, it is 13.4%, if we combine Invermax’s yield data by city with the local prices published by Tinsa. (…).

The economic environment “is completely favouring the yields on these kinds of assets…” said Jesús Martí, author of the report compiled by Invermax, a company that belongs to the Enacom group. “The reasons driving the increase in the gross rental yield are….the fact that house prices in Spain’s major cities have bottomed out, demand is continuing to rise, especially for rental properties…”. Also, unemployment rates in the provincial capitals stand at around 10% and there is a persistent shortage of available homes for rent. (…).

According to Beatriz Toribio, Head of Research at Fotocasa, “The rental market still has a lot of potential in Spain. The country mainly comprises homeowners, but consumers are gradually opening up to the rental culture, as a result of the economic, socio-demographic and employment changes that are happening across Spanish society”, she said. (…).

According to data from Fotocasa, the most profitable autonomous regions for buying a home and subsequently renting it out are Cataluña, Madrid, the Canary Islands and the Balearic Islands, where yields amount to more than 6%. In some towns in Cataluña and Madrid, that percentage increases to 7% in certain areas and even to 8% in one district in the capital, specifically, Villaverde. (…).

And so we ask the million-dollar question once again: Is now a good time to buy a home and put it on the rental market to obtain returns? The general answer from the real estate experts is a resounding “Yes”, with increasingly less hesitation. However, the choice of investment (area, size, features and the level of demand for rental housing, amongst other factors) is fundamental.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

Registrars: House Prices Rose By 7.7% YoY In Q1

18 May 2017 – El Mundo

Homes are becoming increasingly expensive. House prices rose by 7.7% during the first quarter of 2017 in YoY terms, according to the real estate statistics published by the College of Property Registrars. With respect to the last quarter of 2016 – i.e. looking at the QoQ variation – the increase amounted to 4.1%. With these new increases, the cumulative adjustment since the peaks of 2007 continue to fall and now amount to 22.8%.

On the other hand, 113,738 house sales were recorded between January and March, representing the highest quarterly figure since the first three months of 2011. The increase amounted to 21.8%, with respect to the previous quarter. In interannual terms, the positive trend continued: prices rose by 14.4% with respect to the same quarter in 2016.

On this occasion, contrary to the trend seen in recent years, new house prices performed in line with the general increase, accounting for 18% of the total number of sales, with a significant QoQ rise of 27.5% (20,490 sales), whilst the sale of second-hand homes rose by 20.6% compared to the previous quarter, to reach 93,248 operations.

Purchases by overseas buyers reach peak levels

The weight of house purchases by overseas buyers remained relatively stable during the first quarter of the year to account for 13.1% of all registered sales. That corresponds to sales of around 15,000 properties per quarter. In cumulative YoY terms, foreigners accounted for 13.3% of all purchases, a historical maximum, and corresponding to more than 55,000 house purchases per year by overseas buyers.

By nationality, the British continued to lead the ranking, accounting for 14.5% of all purchases made by foreigners, although their continued fall over the last few quarters (during the previous quarter, they accounted for 16.4% of all purchases made by foreigners) has brought the figure to a new historical low over total purchases by foreigners. The French rose to second place with 9.6%, followed by the Germans (7.7%), Belgians (6.9%), Swedes (6.3%) and Italians (6.1%). These first six nationalities accounted for more than half of all house purchases by foreigners.

Average mortgage amounted to €116,182

Mortgage debt to buy a home increased by 3.6% compared to the previous quarter, to reach €116,182, whilst the number of fixed rate mortgages continued to rise sharply, in line with previous quarters, to account for 38.7% of all new contracts, compared to 31% in the previous quarter, a new maximum in the historical series.

This situation leaves variable rate mortgages at their lowest figure to date, especially, Euribor, which was the reference rate for just 60.3% of all mortgages. The average initial interest rates on new loans decreased slightly to reach 2.3% from 2.4% in the previous quarter.

The terms of new mortgage loans remained relatively stable, recording a slight increase of 0.7% compared to the previous quarter, and an average term of 23 years and four months.

Access to housing saw a slight deterioration: the average monthly mortgage repayment during the first quarter amounted to €536, representing a QoQ increase of 2.2%, whilst the percentage of that repayment over wage costs rose to 28.3% from 27.6%.

Original story: El Mundo 

Translation: Carmel Drake

What’s In Store For The Housing Market In 2017?

28 December 2016 – Cinco Días

“The real estate market can look forward to a new smooth and long expansionary cycle”. That is the consensus of the majority of analysts who have spent the past few days preparing their end of year report and forecasts for next year. Although the forecast figures are unlikely to coincide exactly, the fact is that the trend is unanimous. Provided there are no major macroeconomic changes, in other words, provided employment continues to grow and interest rates continue to remain a minimum levels, all of the experts consulted, be they property developers, construction companies, intermediaries such as the API, notaries, registrars, appraisal companies or bankers, agree that: 2017 will be better than 2016.

This does not mean that there are no clouds on the horizon. For the consultancy firm Knight Frank, the main risk is the political context at home and, to a lesser extent, overseas. “During the months when there was a caretaker Government, many projects were frozen; now the main uncertainty is whether the new Govenrment will manage to approve the budgets”, said Ernesto Tarazona, Managing Partner of Residential and Land at Knight Frank.

In this way, provided there aren’t any new political upheavals, 2017 will be the year in which more homes are sold and constructed and at higher prices. In terms of production, experts calculate that if this year around 70,000 new homes are going to be finished, then next year that figure should increase to around 100,000. Meanwhile, in terms of transaction volumes, next year could be the first year since 2008 when we see more than half a million homes being sold once again, according to Tinsa.

On the other hand, the forecasts vary the most when it comes to house prices, with predicted increases ranging from 2% to 5%. The VI Observatory of the sector, compiled by the Spanish Association of Value Analysis (AEV), together with the Head of the Applied Economics Department at the University of Alicante, Paloma Taltavull, and a group of 21 experts states that the evolution of house prices will be contained due to two essential factors: the stock that still needs to be sold or leased, of which they calculate that 25% is owned by the banks; and the weakness in terms of demand that still persists across the majority of the country. In the opinion of these experts, prices will end this year with nominal increases of around 3.8%, and will continue to rise by around 3% in 2017. Other sources, such as Bankinter, raise that percentage to 5%, due to the booms currently happening in the real estate markets in Madrid and Barcelona, where house prices are rising at double-digit rates given the scarcity of supply of new homes.

What all of the experts seem to have rejected is that the market may generate a new bubble over the medium term, given that: house sales are growing in a sustainable way, in line with new mortgages; and they are doing so in regions with the greatest economic activity and highest levels of job creation. Moreover, the recovery in terms of the promotion of new homes will act as a buffer to prevent one-off price spikes amounting to anything more. (…).

Original story: Cinco Días (by Raquel Díaz Guijarro)

Translation: Carmel Drake

Spaniards Keep The Same Home For 12 Years On Average

26 April 2016 – Cinco Días

Yesterday, Spain’s Association of Property Registrars published the Yearbook of Property Registry Statistics, which analyses aspects such as the use that Spaniards make of their homes, amongst other factors. This use is deduced from the average period of ownership of each home, a very valuable piece of information that is only recorded by the registrars. In 2015, that average period amounted to 12 years and seven months, whilst in 2008, the figure amounted to just seven years and 10 months.

Thus, although this conclusion is not foolproof, the Treasury has already stipulated that during the recent boom, if a home was owned for less than five years then it may indicate that the property was acquired as an investment, whereas properties owned beyond that period, are likely to be used as residences.

The numbers published yesterday show once again that, since the bubble burst and the serious problems being faced by many citizens and companies when it comes to selling their homes emerged, operations involving properties that have been owned for more than five years have gained ground.

In fact, those operations went from representing barely 43.7% of all transactions in 2007 (in other words, less than half of the homes that were bought and sold during the last year of the boom were residences) to 80.7% last year, which the experts describe as a much more balanced figure. By contrast, those operations involving properties owned for less than five years went from accounting for 56.3% of all sales and purchases in 2007 to 19.3% last year.

Another significant finding relates to who participated in the majority of sales and purchases. In 2015, 87.3% of transactions were carried out by families, which represented the second consecutive increase since 2013. Companies, by contrast, continued to lose weight, accounting for just 12.7% of operations, compared with 15.3% in 2014 and 21.9% in 2013. Nevertheless, the figures are still a long way from the minimum of 5.1% recorded in 2007.

House purchases by foreigners accounted for 13.2% of the total and that figure has now been growing for seven years. In the Balearic Islands, that percentage amounted to 35.6%. Moreover, 5.2% of all operations completed by foreigners involved properties costing more than €500,000.

Original story: Cinco Días (by Raquel Díaz Guijarro)

Translation: Carmel Drake

Outlook 2016: House Prices Will Rise By 7% & Sales By 17%

28 December 2015 – Expansión

(…). According to the XXII edition of the Real Estate Pulsometer published by the Institute of Business Practice (IPE), the outlook for 2016 is promising. Next year, house prices will rise strongly (by 6.6%), sales will increase by 17.2%, construction of new homes will rise by 12.2%, mortgage lending for urban properties will increase by 16% and stock will decrease by 24.7%.

In addition, the report forecasts a gradual recovery in the rental market, a sharp increase in yields on housing and a full-blown recovery in the non-residential sector, which has broken records in 2015 and on course for a positive 2016, with fewer operations but higher prices.

The most tangible indicator of the real estate recovery will be “the increase in the sales of homes, offices, warehouses, retail premises and land (especially urban)”, says José Antonio Pérez, Director of the Real Estate Department at IPE and the author of the report. (…). We expect to see around 820,000 operations closed in total in Spain in 2016, which represents an increase of 8.1% with respect to  2015 and 23.7% more than in 2014.

Increases across all regions

More than half of the properties sold will be homes. Specifically, next year, 481,500 homes will be sold, i.e. 17.2% more than in 2015 and 50.7% more than in 2014, according to the study, prepared using data from the MAR Real Estate network of estate agents and the Network of Qualified Real Estate Advisors, cross-checked against official figures from INE, the Ministry of Development, the registries and the notaries.

Sales are expected to grow by the most in País Vasco (by 26.8%) in 2016, followed by the Balearic Islands (24.5%), Madrid (23.5%) and Cataluña (22%). Only Castilla-La Mancha is expected to experience a decrease next year: operations will decrease by 2.4% in that region, which has the highest volume of stock per capita in Spain.

In other words, the recovery will continue to take place at two speeds, but the differences (between the speeds) will be less marked, in the sense that, although we will see different speeds, improvements will be seen across almost all of Spain.

In the context of more transactions and increased mortgage lending, house prices will increase significantly. On average, by 6.6%. If we also take into account non-residential assets, property prices will increase by 8.17%, on average.

The market for new builds will also be affected. According to the Pulsometer, cranes will return to our cities, albeit gradually. Specifically, construction permits (which indicate future construction activity) will increase from 58,636 in 2014 to 82,682 in 2016. Up by 41% in two years (in 2015, they already increased by 9% YoY). Moreover, construction will begin on 39,000 residential properties in 2016, up by 12.2% compared with 2015 (34,700). (…).

The changes will also help to reduce the stock of unsold new properties. This surplus amounts to 433,583 homes at the end of 2015. In 2016, a quarter of that supply will be used up, taking it down to 326,295 units. That figure represents less than half the number in 2014 (675,945), according to the IPE’s study.

More mortgages

The real driver behind this consolidation in the residential market is financing. Mortgage lending for urban properties (in other words, not only homes, since the report does not break down non-residential financing) will amount to 426,647 (individual mortgages) in 2015, up by 23% compared with 2014. The figure for 2016 will increase again to 494,890, i.e. 16% more than this year. (…). The average mortgage in 2016 (€122,500) will be higher than since 2011 (€124,862). (…).

Original story: Expansión (by Juanma Lamet)

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

Notaries: House Prices Decreased By 2.4% YoY In Q2 2015

16 September 2015 – El Confidencial

We are clearly living in a skewed market. The experts in the sector have been saying as much for several months now and the various sets of data being published about the housing market in Spain tell the same story week in week out.

Just one week ago, the House Price Index (IPV) published by the National Institute of Statistics (INE) showed a 4% YoY increase in house prices in Q2 2015. That percentage raised alarm bells as it fuelled fears that the market may be overheating again. Today, data from the Ministry of Development shows an increase of 1.2% during the second quarter of the year compared with the same period last year, a more moderate rise than reported by INE.

Now, to cool tempers, data from the notaries reflects exactly the opposite, a YoY decrease of 2.4%, taking the average price per m2 to €1,247. According to the General Council of Notaries, this decrease is due to a 3.1% YoY fall in flat (apartment) prices, meanwhile family homes experienced an increase of 3.4%. Moreover, these latest statistics reflect important differences between the prices of second-hand homes and new properties, with a decrease of 4.5% and an increase of 9.4%, respectively.

Which data is most reliable?

According to INE, “All of the parameters relating to property prices are skewed, the market is not yet operating with any kind of normality”. As such, any figures that are published should be interpreted with caution.

In terms of statistics, rather than depending on one official set of data as an indisputable reference, we are faced with multiple reports that only serve to generate confusion and contradictions. At the state level, for example, we have data from the Ministry of Development and INE, meanwhile the notaries and registrars supply their own data to the market, and so do the appraisers and real estate websites.

All of these reports are prepared on the basis of different methodologies. In this way, the data published by the Association of Registrars differs from that released by INE and again from that supplied by the notaries. The first group publish data with a delay of two or three months, i.e. they release information about prices and transactions signed before notaries two or three months earlier. Therefore, they do not really show the increase or decrease in prices in a given month, but rather what happened in the market several months ago. By contrast, the data issued by the notaries is more or less published in real time. As such, the statistics generally do not reconcile with each other. However, if instead of looking at the exact figures or percentages, we focus on their evolution over time, all of the indicators seem to be telling the same story – the market is stabilising.

That is because we find ourselves in a market that has now emerged from the emergency room, although it is still in need of professional care. In other words, the market has not been discharged from hospital yet and it will take months, if not years, for it to return to any kind of normality.

That is mainly because we are starting from a position of historical lows in terms of sales, mortgages and the construction of new homes; therefore any upwards movement may distort the figures. As a result, it is not surprising that we are talking about increases in terms of sales and the granting of mortgages at rates exceeding double figures. We are starting from zero and therefore any upwards movement distorts the percentages.


Furthermore, we should not forget that we are dealing with a very heterogeneous market. The level of activity is not the same in Madrid as in Albacete, nor is it the same in the neighbourhood of Salamanca as in Usera. Clearly, prices and the market in general will begin their recovery in those areas in which demand is highest and supply is scarce.

Original story: El Confidencial (by Elena Sanz)

Translation: Carmel Drake

Statistics Providers Agree That Spanish Housing Goes Stable

19/11/2014 – Expansion

Sector’s observers find themselves snowed under statistics flowing from many sources which often are inconsitent or even contradictory. One one hand, the Notaries said yesterday the housing prices fell by 4% in the third quarter, and on the other, Property Registrars announced a rise of 1.15%.

Is the data reliable? Well, the most important is that they inform us about certain stabilization in the sector and there are many reasons for their divergence.

The methodology used by the sources varies as the notaries base on deeds, more set in the present, while registrars employ the repeat-sales price indice calculated over a two-month data offset (the time needed to complete all proceedings related to a sale). Appraisers usually use the comparative valuation method, and web portals focus on asking prices. As a consequence, they end up in disagreement.

Both the notary and the registry data, ‘although seemingly contradictory at first glimpse, they prove the cost of homes in Spain floats towards stabilization’, says Beatriz Toribio, Research director at portal fotocasa.es. ‘This doesn’t mean, though, that the slump is over. The values still have a long way down ahead in many areas of the country’, she adds.

Manuel Gandarias, Research chief at pisos.com, explains that ‘there are several months left, given that mortgage approval improves step by step, unemployment rate remains high, the Government may surprise us with the new taxation reform and in 2015 there will be the elections’.

When it comes to property sales, just the opposite happens: the notary data are more optimistic than the registries ones. ‘In the third quarter of the year, the purchases went up 8.6% from a year earlier’, assure the Notaries, while the Registrars say the rise was of 3.5%.

The latter claim the real estate market is currently utterly chopped and they see eye in eye with the Notaries on the matter of steadier monthly sales.

According to the Registrars, the advance was triggered by pre-owned home performance (52.127 units sold), practically doubling new properties’ sales (27.434). The Notaries agree that the first see an abrupt increase (up 31.8%), and the other sharp slump (down 32.8%).

Andalusia won in the transactions number with 16.006 deals, followed by the Valencian Community (12.189), Catalonia (11.975) and Madrid’s Community (10.883), say the Registrars, adding that foreigners accounted for 13.1% of the total, led by the British (18.06%), then the French (10.48%), Russians (7.5%), Germans (6.45%), Belgians (6.19%) and the Swedish (6.08%).

In reference to default on mortgages, the number of notices about home foreclosure initiation posted 13.421, by 5.500 (29%) less than in the second quarter.

Finally, both the Registrars and the Notaries attach information justifying why their data are more trustworthy.


Original article: Expansión (by Juanma Lamet)

Translation: AURA REE