Permits for New Construction Grow by 8% in January

28 March 2018

During the first month of the year, 6,694 applications were registered for the construction of new homes, the highest figure for January since 2011.

The issuance of construction permits is continuing to grow robustly in Spain. In January, 6,694 applications were submitted for the construction of new homes, an annual increase of 7.3%. The Ministry of Development reported that it was the highest figure for the month of January in the last seven years.

The pace of new applications is thus continuing the trend seen over recent years. In 2017, Spain recorded its fourth year of growth, with a year-on-year increase of 26.1% in the number of submitted applications to 80,786.

When broken down by the type of applications, there 5,054 requests for flats within apartment blocks, accounting for 75.5% of the total number of authorisations. Also, permits for single-family homes grew by 8.25% in January, compared to the same month in 2017, to 1,640 applications.

Another trend that is being seen in the Spanish residential market is seeing a marked growth in housing rehabilitation. 2,175 visas were requested in January for home extensions and reform, an increase of 9.7% over the same month last year.

Original Story: EjePrime

Translation: Richard Turner


Andalucía Offers 800,000 Sq. Meters of Industrial and Residential Land for 2,625 Homes


07 August 2017

A total of 795,843 square meters, distributed in 749 plots of industrial, tertiary and endowment land, and a residential area with a capacity for 2,625 dwellings, in the large part subsidised housing, is the focus of a new auction launched by the Ministry of Development and Housing of the Andalusian Regional Government.

The offer, the third of the fiscal year, includes plots of land throughout the provinces of Andalusia and will remain open until October 9. The income generated by this activity is contributing, among other things, to address new investments in housing development that were affected by the impact of the economic crisis.

The call has two modalities: one destined for the sale of free residential (unsubidized housing), industrial, tertiary and endowment lands, as well as garages, commercial premises and storage rooms; and another one in which land allocated for the development of subsidised housing will be offered. The latter includes 103 plots, with a total of 101,328 square meters for 1,552 homes and a price of €24.3 million.

The plots of land are distributed over Andalusia’s eight provinces, although Cadiz and Granada are two that concentrate the largest areas, 25,181 square meters the first and 24,104 square meteres in the province of Granada. Córdoba will have 19,572 square meters and Seville 11,844 square meters.

Those taking part in the auction will not be able to bid above the fixed prices, but will compete by offering improvements to facilitate the access of the most disadvantaged groups to the homes that are eventually built on those lands.

In the public offer for the sale of industrial and residential plots of lands for unsubsidised housing there will be competition in the prices proposed by the bidders, so that the parcels will be awarded to the highest bids. The base prices of these lands total 41.2 million euros. In this modality, the auction will include 432 plots of industrial land, totalling 538,181 square meters. Jaén is still the province with the largest offer, 278 plots with 309,745 square meters, followed by Almería, with 122 plots and 131,661.

In the auction for unsubsidised housing, 214 plots with a base price of 35.7 million and a total of 156,334 square meters, with a capacity for 1,073 homes, are on offer. In this case, it is the province of Cadiz which is offering more land, with 106,061 square meters, although almost all that land, 100,071 square meters, is in Costa Ballena, Chipiona. Almería is offering 71 plots with a total of 16,407, while Jaén is contributing with 35 plots with 15,082. The auction also includes 234 garages, 113 commercial premises and eight storage rooms, with a total price of 19 million.

In addition, a public auction for the sale of free residential land owned by the autonomous community has been announced, which incorporates assets which are managed by the General Directorate of Patrimony of the Board to AVRA. 15 plots with a total area of ​​4,773 m2, capacity for 16 homes and a total price of 757,476 euros will be included in this offering.

This is the third land sale auction issued by the Ministry of Development and Housing, through the Housing and Rehabilitation Agency of Andalusia (AVRA), this year. In the previous ones, held in March and May, industrial, tertiary and residential capacity were sold with a total area of ​​56,323 square meters and an award amount of 8.6 million euros. The residential land has a capacity for 133 dwellings. At the end of the year another offer will be launched with which the sale program for the current year will be closed.

Since the Ministry of Housing Development adopted the decision to consider land management as one of the strategic lines of AVRA activity, 255,119 square meters of land have been sold, with capacity for 944 residential homes. These lots were raised 39.5 million euros.

Original Story: Inmodiário

Translation: Richard Turner


Now Is The Time To Invest In Housing

11 May 2015 – Expansión

The real estate sector is taking off / The real estate sector is becoming more attractive for investment purposes. Now is the time to buy, above all in the exclusive neighbourhoods of the large cities and in certain areas along the coast. Renting generates good returns.

Real estate investment is gaining lustre. Increasingly, experts are saying that the market has bottomed out and now is the time to buy.

House prices, which fell by 50% on average from (the heights of) the property boom, are experiencing a clear process of stabilisation and are now showing signs of gains in some places. The valuation company Tinsa highlights that Barcelona, Palma de Mallorca, Málaga and Burgos are the cities that experienced the highest inter-annual price increases during the first quarter, of between 0.1% and 5.4%. On average, prices rose by 3.3% during the first quarter, according to Sociedad de Tasación, reflecting even more optimistic data.

But beware, the experts warn that although investment opportunities exist, not all investments are good – many homes are still valued above market price. Nevertheless, in the most sought after areas, waiting to buy could be a mistake, since homes will be more expensive and there will be more people interested in making bids for them.

Location is key. The most profitable areas to invest in are the best areas of the large cities, especially Madrid and Barcelona, as well as the most established coastal enclaves, such as the Costa del Sol. For example, the gross annual return on a 100m2 home in a prime area of Madrid is around 5.2%.

The banks have more than 150,000 properties to sell through their websites. The discounts (they are offering) are less aggressive than during the peak of the crisis and there is an extensive supply of holiday homes. The most pronounced reductions are located outside of the premium areas, but homes in those regions are more difficult to monetise.

Rental returns

One of the most recommended strategies at the moment is ‘buy to let’. According to the President of the Foundation for Real Estate Studies, Julio Gil, “buy to let is currently one of the best alternatives for small investors in terms of return and risk”. You can obtain an average return of 4.7%. In the case of retail premises, the return that you can obtain increases to 7%; for offices, it amounts to 6.4%; and for parking spaces, it averages 4.6%, according to a report from Idealista.

These returns are significantly higher than the 1.6% offered by a 10-year Spanish treasury bond. Meanwhile, according to the Bank of Spain, average returns on 12-month deposits are below 0.5%.

One of the elements that reflects the reactivation of the real estate market is mortgage lending. It increased by 1.6% in 2014 to reach 203,000 loans, whereby turning the tables on seven years of decline. The improvement was even more dramatic in February, with an increase of 29.2%. Nevertheless, the figure still falls well below the equilibrium point, which is 450,000 (mortgages) per year, according to Sociedad de Tasación.

The financial institutions are optimistic and say that new credit will increase this year. Analysts at Moody’s ratings agency agree. They consider that the increase in mortgage lending will improve demand in the real estate sector, which in turn may help to increase property prices.

The financial institutions have already launched (campaigns) to secure clients and obtain customer loyalty during this period of recovery. Most of the offers from the banks are variable rate products (mortgages). The best deals have spreads of between 1% and 1.75%. However, it is important not to focus on the differential alone, since in some cases opening and cancelation fees apply, whereas in other cases they do not. Moreover, each entity usually requires a minimum income, which varies from one to another (from between €500 to €5,000 per month). Furthermore, in almost all cases, the banks require borrowers to purchase other products such as insurance and pension plans or (to commit to a minimum) credit card spend. Meanwhile, interest rates on fixed rate mortgages vary from between 2.4% to 5.5%.

Original story: Expansión (by C. Rosique)

Translation: Carmel Drake

Foreign Investment ‘Pulls Up’ House Prices In 8 CCAA

15 April 2015 – El Economista

The housing phoenix is rising from the ashes, but, as yet, it is not soaring with equal force across the whole country. After 2014, which was year zero for the sector after seven years of hard-hitting decreases, the foundations are being laid in 2015 for a new cycle. Whilst in the large cities, such as Madrid and Barcelona, (the recovery) has taken off, fuelled by foreign investment, tit is still weak and flighty in areas with lower demand; nevertheless it is still a recovery.

The revival of the mortgage market, accompanied by an environment of low interest rates, a good overall economic climate and the outlook for growth both in terms of consumption and production, has generated the ideal breeding ground for the real estate sector to return to our economy, although in terms of size it is still well below its pre-crisis levels.

According to data from the National Construction Conference (Conferencia Nacional de la Construcción or CNC), in 2007, construction accounted for around 22% of GDP. Today, it represents approximately 5%. Leaving the excesses of the real estate boom aside, the prudent return of construction activity is important to enable proportional feedback between the Spanish economy and housing.

Where is real estate taking off?

After the hangover of the crisis, the housing sector is starting to record its first price increases. According to Sociedad de Tasación (ST), the average price of new and used homes increased by 3.3% during the first quarter of 2015 to record nine consecutive months of increases. With the latest rise, the (average) price per square metre amounts to €1,316, according to the Trends in the Real Estate Sector report. Nevertheless, the evolution is very uneven across Spain.

The value of properties in eight autonomous communities has increased. Navarra, led the ranking with an increase of 6.7%, followed by the Balearic Islands (6.5%), Valencia (5.7%), the Canary Islands (5.4%), Madrid (3.8%), La Rioja (3%), Andalucía (2.8%) and Extremadura (0.3%).

Fluctuations are still expected

Nevertheless, as Juan Fernández-Aceytuno, CEO of ST, notes, this data should be interpreted with caution, given that it comes in the context of a decrease of around 45% in the price of homes; as such the downward trend has less distance to travel. Moreover, if we focus only on the price of new homes, then the decrease has not bottomed out yet.

All of this, he explains, draws a picture that is characterised by “stabilisation, but with a serrated edge”. In recent months, positive and negative data has been recorded and the distribution of the recovery is uneven. Therefore, although the majority of the experts agree that house prices have bottomed out, it is too early to talk about a full recovery. For that, the CEO of ST says, the figures for the number of transaction and mortgages granted will need to return to the levels last seen in 2001 and 2002. And he adds that those two variables are the ones that are really going to shape the evolution of the real estate sector. “A market the size of Spain should be granting around 750,000 mortgages and closing 800,000 house sales per year”, he says.

Who is buying?

Despite the opening up of the credit market and the improvement in conditions, the level of financing continues to be low and does not stop flowing between families; this brings us back to a position of prudence, says Fernández-Aceytuno. “The stored-up demand will have to be released at some point”, but decisions to buy are still being postponed. Price decreases and greater employment stability may provide a boost for all of those latent buyers.

So, who is behind the increase in the number of house sales? José Luis Ruiz Bartolomé, expert in the real estate sector and author of the book ‘Return, property, return’ (‘Vuelve, ladrillo, vuelve’) explains. After the necessary price decreases, there has been a strong inflow of foreign investment, both by funds as well as individuals, especially in the coastal regions. Moreover, as this expert indicates, more homes are being sold, but “location is becoming very important”.

The outlook, therefore, is that the evolution (of prices) will be very different in some areas than in others. This is confirmed by the report about the residential market in Spain issued by Maxxima REA, which states that 2014 was the turning point for real estate investment in Spain. According to the study by that real estate consultancy firm, transactions to date have been concentrated in Madrid and Barcelona, and have focused on prime assets, whose supply is scarce. As a result, the prices of higher quality assets in better locations have increased.

More properties are being bought and sold

What is undeniable is that the evolution of prices is supporting the revival of house sales. According to the latest statistics from the National Institute of Statistics (INE), house sales increased by 15.5% in February with respect to the same month last year, to reach a total of 29,714, whereby recording six consecutive months of increases.

Another positive statistic, but again, one that needs to put in perspective, since it is still a comparison against minimum real estate activity. In terms of the geographical distribution of house sales, the map is uneven. Whilst sales are soaring in Aragón (49.2%), followed by Madrid (28.4%), Barcelona (23.2%) and the Balearic Islands (21.7%), other regions are suffering from a decrease in the number of house sales, including (-22.7%) and the Canary Islands (-5.5%).

The return of the cranes

(…) Refer to article dated 30 March 2015 for these details.

The risks

In this overall market context, the obvious question is “Is this recovery stable”? All of the experts agree that it is. The change in the cycle is here to stay, but they also call for caution because money is “very easily frightened”, according to Ruiz Bartolomé, who warns against two risks: political instability, with the rise of parties such as Podemos, “which scare off overseas investors” and the danger that Spain becomes complacent and puts the brakes on its structural reforms.

At the Sociedad de Tasación, they are more optimistic in this sense and they believe that the risks of destabilisation are remote. “Not even the electoral calendars will have a direct impact on the market”, explains its CEO. However, any sharp rises in interest rates would impact the recovery, however such a move is highly unlikely, especially given the latest monetary policy measures undertaken by the European Central Bank.

Original story: El Economista (by Silvia Zancajo)

Translation: Carmel Drake

Tecnocasa: Average Rents Reached €8.54/sqm In 2014

19 February 2015 – El Mundo

Rental prices (in 2014) were slightly higher (+0.47%) than at the end of 2013.

The market is suffering its greatest declines in Madrid (-1.57%) and Barcelona (-0.59%).

The typical landlord profile: pensioners (28%), Spanish nationals (96%) and married (70%).

The typical tenant profile: single people, with permanent employment contracts, aged between 25 and 44 years old and Spanish.

The Tecnocasa Group has presented its first report about the residential rental market in Spain (a groundbreaking study). Highlights show that the average cost of rental homes amounted to €8.54/square metre (in 2014), which is slightly higher (+0.47%) than at the end of 2013.

With these figures on the table, Tecnocasa says that “rental prices have remained stable (upwards)”, although it acknowledges that there has been a slight decline in the two largest Spanish cities. Specifically, rents became 1.57% cheaper in Madrid and 0.59% cheaper in Barcelona, where prices amount to €10/sqm in absolute terms.

One must go back to 2007 to find the last report about rental prices nationwide. The then Housing Minister, María Antonio Trujillo, presented the OEVA (the State Observatory for Rental Housing or ‘Observatorio Estatal de la Vivienda en Alquiler’), which was the first official survey about the market. It was also the last. That study reported that the average price of rental housing was €7.20/square metre.

Tecnocasa’s study shows that the profile of landlords, i.e. of the people that lease out their properties, includes a high percentage of pensioners (28%), Spanish nationals (96%) and married people (70%). In terms of the profile of tenants, they are single, with permanent employment contracts, aged between 25 and 44 and, for the most part, are Spanish.

Lázaro Cubero, Director of the Department for Analysis and Reports (Departamento de Análisis e Informes or DAI) at the Tecnocasa Group, notes that rental prices have decreased by less than purchase prices in the last year, which means that “the yield a landlord can obtain by renting out a home that he/she owns is now greater”. Specifically, this yield has increased to 7.41% on average for the whole of Spain.

These figures represent the findings of the first report about the rental market conducted by the Tecnocasa Group and the Univerisdad Pompeu Fabra (UPF), based on a study that analyses data extracted from the property rental agreements brokered by Tecnocasa’s network (of agents) in Spain between 2012 and 2014.

Original story: El Mundo

Translation: Carmel Drake

Government: Construction Growth Will Return In 2015

18 February 2015 –

2014 was the turning point both in terms of residential housing and construction

The construction sector will be an engine of growth for the Spanish economy once again in 2015. Such was the confidence shown by the Secretary of State for the Economy and Business Development, Iñigo Fernández de Mesa, about this sector, which has been hit so badly by the economic crisis. For Fernández de Mesa, “2014 was the turning point both in terms of residential housing and construction”.

“Construction (activity) has now bottomed out and will return to growth in 2015”, continued the Secretary of State for the Economy and Business Development, who also highlighted that house sales increased by 2% during the second half of last year and mortgage lending also recorded a positive end to the year.

Original story:

Translation: Carmel Drake

Engel & Völkers’ Business Grows By 60.7% In Spain

30 January 2015 – La Vanguardia

E&V brokered property sales worth €699.25 million in 2014 compared with €435.1 million in 2013.

The luxury real estate agent Engel & Völker increased its business in Spain by 60.7% in 2014, when it brokered property sales worth €699.25 million, compared with €435.1 million in the previous year.

During 2014, it closed 1,071 sales, an increase of 77.6% on the 603 transactions completed in 2013. Nevertheless, the average sales price decreased by 9%, from €719,759 to €652,894, said the firm.

As for the rental market, the number of homes handled by the firm in Spain increased by 66.4% in 2014 with respect to the previous year, as it closed 724 transactions.

As with house sales, the average price of rental accommodation also decreased, by 7.6%, in line with the trend in the market to amount to €2,305 (per month).

During the course of last year, Engel & Völkers opened 14 new offices in Spain: its Market Centers in Madrid and Valencia; and 12 offices located in San Sebastián, Vigo, Tarragona, Benidorm, Calpe, Denia and in several parts of Madrid, including Conde de Orgaz, Majadahonda, Las Rozas, Alameda, Sanchinarro and Aravaca, amongst others. In addition, 16 new licences were sold.

According to Philipp Neimann, the CEO of Engel & Völker in Europe, the Middle East and Africa, the market in Spain is a key priority for the company at the international level.

Having opened its Market Centers in Madrid and Valencia last year, with a total investment of €4.5 million, the prestigious property firm considers that there are still many business opportunities in the country.

Globally, the Engel & Völkers group increased total income from commissions by 10.1%, to €300.3 million, the highest amount the company has ever recorded in its 35-year history.

In 2015, it plans to employ 2,000 new real estate agents around the world, with Spain and the USA earmarked as the priority markets for the firm.

Original story: La Vanguardia

Translation: Carmel Drake