Sharp Fall in House Purchases by Brits in Alicante due to Brexit

29 December 2017 – El Boletín

A survey of real estate professionals conducted by the College of Real Estate Agents (API) of Alicante reveals that Brexit is having a significant effect on the real estate market in the region. The research indicates that many areas in the province, in particular along the coast, have experienced a notable decrease in the volume of house sales to British buyers in 2017 and that this trend is forecast to intensify in 2018.

The API College of Alicante points out that “traditionally, Brits have represented one of the largest groups of house buyers in Alicante, the province where the most homes and apartments are sold to foreigners in all of Spain”. Some of the Real Estate Agents are certain that 2017 has seen the lowest volume of sales to British citizens in decades”, although the situation is not being replicated with other overseas buyers.

Moreover, API’s research also shows that the decrease in sales to British citizens does not necessarily mean a reduction in the volume of purchases by foreigners, given that the gap being left by the Brits is being covered by foreigners from other countries. The report indicates that Belgians, Dutch, French, Norwegians, Germans and Russians will be the most active house buyers in 2018. People from up to 125 different countries are now buying homes in the province of Alicante.

Moreover, Brexit is not only affecting house purchases, it is also being felt in that more and more British citizens are putting their properties up for sale in the province of Alicante. In summary, more than 90% of the Real Estate Agents that work with foreigners have already felt the effects of Brexit on their operations and are convinced that the trend may yet intensify further during the course of next year.

Prices on the rise

Another conclusion from this study is that “nine out of every ten APIs interviewed are convinced that house prices in the province of Alicante will continue to rise in 2018, with increases that could range between 3% and 10%, depending on the area and type of home”. The average forecast increase in house prices amounts to around 5% in the province of Alicante as a whole.

The Real Estate Agents are also convinced that, after a year marked by the recovery of the sector, 2018 is going to be a year in which house purchases will continue to rise. “The second-hand market is going to continue to perform well, but 2018 will probably be the year in which new builds start to take off again, in towns where there is still land available”, explained Marife Esteso, President of the API College of Alicante.

In 2018, the worrying upward trend in the rental market is also expected to continue, where the gap between high demand and scarce supply, together with the diversion of homes to holiday lets, means that prices are going to keep rising. In this sense, many real estate agents indicate that the rise in holiday rentals is being driven not only by the higher returns on offer but also because holiday lets allow owners to avoid the problems of non-payment and property damage that are typically caused by long-term tenants.

Original story: El Boletín (by E.B.)

Translation: Carmel Drake

MAB Approves Debut Of Hotel & Tourist Apartment Socimi Elaia

31 October 2017 – Eje Prime

The hotel and tourist apartment Socimi Elaia has received the green light from the Alternative Investment Market (MAB) to make its stock market debut. The company will make its debut with a market valuation of €119.1 million, equivalent to €10.55 per share.

The firm just received a favourable assessment report for its debut on this market, through which it is seeking to increases its capacity to capture resources and provide liquidity to its shares, as well as to comply with its legal requirements as a Socimi.

Elaia owns a real estate portfolio comprising two residential buildings in the centre of Madrid, as well as five tourist apartment buildings and five hotels, all of which are located in Gerona, Málaga, Barcelona and Mallorca. The Socimi has made a total investment in these assets of €145 million.

The company is currently embarking on the comprehensive renovation of its two buildings in Madrid. In both cases, the properties date back to the nineteenth centre and are located in the centre of the Spanish capital (on Calle Bailén and Calle Atocha, respectively). The Socimi will invest €9.6 million and €5.2 million, respectively, on the work to improve the two properties, which will subsequently be used as rental apartments.

Original story: Eje Prime

Translation: Carmel Drake