Tag: Salamanca

ST: New House Prices Rise By 4% In MAD & BCN

30 June 2016 – El País

According to ST Sociedad de Tasación, the average price of new homes grew by 4% YoY in June in the cities of Madrid and Barcelona. They were the two provincial capitals with the highest new home price rises in the last year. These price increases, which are not being seen in other capital, have been driven by the shortage of new home stock, explain sources at ST. “Our analysis of this data and of the increasing trend observed since June 2015 allows us to predict that Barcelona and Madrid are going to act as the drivers of the recovery process for new house prices, albeit at a slow pace”.

Barcelona is the provincial capital that recorded the highest new house prices, with an average of €3,390/sqm. Prices grew there by 2.2% during the first half of 2016. The YoY price increase in Barcelona was 4.1%, the highest of all of Spain’s provincial capitals.

By district, Gracia recorded the highest increase in new house prices, with a rise of 7.72%. It was followed by the neighbourhoods of Sarria-Sant Gervasi, with 6.94% and Sant Marti, with 6.38%. At the other end of the spectrum, the districts with the lowest YoY price increases were Ciutat Vella (1.33%), Sant Andreu (1.93%) and Nou Barris (2.33%).

And not only did the district of Sarria-Sant Gervasi in Barcelona record one of the highest price rises, it also registered the highest average price per constructed square metre, at €5,672/sqm. The districts of Les Corts and L’Eixample were ranked in second and third place, respectively, in terms of average prices, with values of €4,610/sqm and €4,511/sqm. By contrast, the districts with the lowest average prices were Nou Barris (€2,721/sqm), Sants-Montjuic (€3,024/sqm) and Sant Andreu (€3,062/sqm).

In Madrid, a new home costs €2,886/sqm on average

In the case of Madrid, new house prices have grown by 4% with respect to the previous year and by 2.1% during the first half of 2016. That takes the average price of new homes in Madrid to €2,886/sqm.

The ranking for the YoY variation in new house prices is headed by Ciudad Lineal, which saw growth of 5.8%. It was followed by Barajas, with 5.7% and Arganzuela, with 5.4%. At the other end of the spectrum, the neighbourhoods with the lowest YoY price variations were Hortaleza (0.8%) and La Latina (1%), followed by Tetuán (1.8%).

In terms of the average price of new homes, Salamanca was once again the most expensive district in the capital, with an average price of €4,799/sqm, followed by Chamberí (€4,626/sqm) and the Centre (€3,939/sqm). By contrast, the neighbourhoods of Vicálvaro, Villaverde and Villa de Vallecas registered the lowest average new home prices, of €1,856/sqm, €1,883/sqm and €2,203/sqm, respectively.

Original story: El País (by S.L.L.)

Translation: Carmel Drake

The Housing Paradox: Supply Is Failing To Match Demand

21 June 2016 – El Confidencial

Spain is going to need 180,000 homes per year until 2025 to meet the demand being created by new households. In the Community of Madrid alone that means 25,000 new units. Those are the forecasts published by the real estate consultancy CBRE, which estimates that the existing stock contains around 300,000 homes, of which between 20-25%, in other words, around 75,000, will never be sold because no-one wants to buy them, either because of their locations or other characteristics.

(…) According to Samuel Población, the National Director of Residential Assets and Land at CBRE, “by the beginning of 2017, the stock of new homes will have pretty much been absorbed; what is left will be very localised and technical, which will drive the launch of new developments”. To give us an idea, in the centre of Madrid, there are currently only 800 (new) homes up for sale and in Barcelona, there are just over 1,000, according to estimates from Sociedad de Tasación.

Specifically, markets such as Madrid, where demand is high – house sales have risen by 13% in the capital in the last year – and where there is a shortage of new homes being constructed, account for almost one in seven of the new homes being built. Nevertheless, the available land inside the M-30 ring road has capacity for less than 1,500 homes. In Cataluña, demand amounts to 14,000 homes, of which Barcelona accounts for 7,900 units, ahead of the Balearic Islands, where demand reaches 7,544.

In fact, Madrid has become one of the most active markets from the point of view of the residential sector, given that almost 30 operations have been signed there in the last year and a half, which have involved a total investment of almost €1,000 million, in some cases exceeding €100 million each (such as the cases of the plots in Raimundo Fernández-Villaverde and Juan Bravo, 3). However, that activity contrasts with the paralysis that exists in other autonomous regions, such as Extremadura, Castilla y León and Castilla La Mancha, where demand is currently non-existent, according to Lola Martínez, the Head of Research at CBRE.

According to Samuel Población, this strong demand in Madrid has already had a direct effect on prices. “We have seen operations involving land, where prices have doubled in just a few months…”. In fact, although the consultancy firm forecasts that house prices will rise by 6% on average across Spain in 2016, it does not rule out the possibility of higher price increases in the centre of Madrid, where the average price of new homes amounts to €3,000/sqm, and where prices for new developments in the neighbourhood of Salamanca are as high as €10,000/sqm.

The lack of buildable land inside the M-30 ring road, the paralysis of the sale of public land and the high prices of plots owned by private developers means that the market for renovations is gaining strength in the centre of Madrid. Some of the most notable operations in recent months include the refurbishments of the former Agencia EFE building and the former tenement building in San Juan de la Cruz, which are both going to be converted into luxury homes. (…).

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

Residential Investment: Which Are The Most Profitable Districts?

30 May 2016 – Expansión

Madrid and Barcelona are pulling the real estate wagon. The recovery is happening at two speeds, at least. On the one hand, house prices are rising in the large cities, where sales volumes are also increasing significantly, rental prices are growing, non-residential investment is on the up and there is a shortage of land available for sale.

Most of this improvement in due to underlying macroeconomic trends, but not all of it. The impact of private investors is playing a crucial role in the strengthening of the two large real estate regions, whose central areas are the most sought-after by investors, both businesses and individuals, and Spaniards and foreigners alike.

The prime districts of the Madrid and Barcelona offer the highest rental yields for those looking to buy homes as investments. If we also include the appreciation that these properties are experiencing in terms of price, then the total return on these homes exceeds the 10% threshold.

That is according to a report about rental yields, by district in Madrid and Barcelona, prepared by Fotocasa.

The analysis of the Madrilenian capital concludes that the districts that spark the most interest for rented housing are: Centro, Carabanchel, Tetuán, Puente de Vallecas and Latina. They currently offer an average yield of 6%, almost one percentage point higher than the average return in Spain, which stands at 5.3%. The yields offered from rents in these districts range from 4.9% in Centro to 7.4% in Puente de Vallecas.

In Barcelona, the gross yield from buying a home and putting it up for rent (excluding capital gains) is 5.3%, in line with the national average. The districts that are most sought-after by investors in Barcelona are: L’Eixample, Sant Martí, Ciutat Vella and Gràcia, which are currently generating an average return of 4.7%, i.e. 1.3 points below the yield being offered by an average home in the most sought-after areas of Madrid. In any case, the prime returns range between 4.2% in L’Eixample and 5.3% in Ciutat Vella. (…).

Double-digit price rises

In terms of prices, nine of the 10 districts in the Catalan capital recorded double digit increases in 2015. “Within the last few months, we have seen unheard of increases in rental prices in the city of Barcelona. Whilst historically, the Madrilenian district of Salamanca was the most expensive place to rent a home in Spain, now that ranking is led by the Catalan district of Ciutat Vella, after prices there rose by more than 20% YoY. In fact, Ciutad Vella is currently 11% more expensive than the Madrileñian district of Salamanca”, said Beatriz Toribio.

“The high demand for rental housing in the most central areas of the city, and the limited supply of homes, are combining to cause rental prices in Barcelona to rise to record breaking levels. They are even causing rental prices in less central areas, such as Sant Martí and the district of Horta Guinardó, to see double-digit YoY increases in rental prices”, added Toribio.

The most sought after rental properties in Madrid are smaller than the most sought after properties for purchase. Whilst to buy, the average home measures 80 sqm and has two or three bedrooms; to lease, the average home has a surface area of 57 sqm and two bedrooms. The same thing is happening in Barcelona: the average home to buy measures 80 sqm, and has between two and three bedrooms. Nevertheless, to rent the average house size is 60 sqm with two bedrooms.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

House Prices Rise By 10%+ In Most Exclusive Neighbourhoods

5 April 2016 – Expansión

Changing trend / Madrid and Barcelona are leading the recovery in the residential market, with house price increases of 9.2% and 7.5%, respectively during Q1 2016. The appraisal value of homes is now on the rise in every district of both cities.

(…). According to statistics from the appraisal company Tinsa, the value of residential properties increased by 1.4% during the first three months of 2016, with Barcelona and Madrid leading the charge.

The average appraisal value of (unsubsidised) homes per m2 in Barcelona amounts to €2,551/m2, which is 19% more expensive than the average in Madrid (€2,142/m2). This gap between the two cities has a simple explanation: not only have house prices been rising significantly faster in Barcelona than in Madrid, but also the Catalan capital has a higher population density than Madrid, which affects supply and demand, resulting in a higher degree of concentration. Moreover, barely any new residential properties are being constructed in Barcelona. (…).

The evolution of house prices in Madrid and Barcelona varies by neighbourhood. House prices rose in all 10 districts of the Catalan capital during Q1 2016, without exception and, for the first time, they also increased in all 21 Madrilenian districts. That has not happened since the real estate bubble burst.

The ranking

The highest price increases were concentrated in Barcelona. The two districts where average prices rose by the most were Les Corts (13.5%) and Sants-Montjuïc (12.2%). They were followed by the district of Salamanca, Madrid’s main real estate district, with an increase of 11.8%.

With an average price of €3,597/m2 and despite the heterogeneity of the neighbourhoods that comprise it, Salamanca is the district with the second highest prices of all of those analysed by Tinsa, behind only Sarrà-Sant Gervasi, which has an average price of €3,671/m2 (5.8% higher than in 2014). (…)

According to calculations from the consultancy firm Knight Frank, prices are going to rise by between 5% and 10% in prime areas in 2016, especially in five areas of the Madrilenian capital, namely Salamanca, Jerónimos, Chamberí, Justicia and El Viso. (…).

In Madrid, the most expensive districts after Salamanca are Chamberí (€3,444/m2 for subsidised homes, up by 5.4% compared with Q1 2015), Retiro (€3,270/m2, up by 4.3%), Chamartín (€3,312/m2, up by 1.7%) and the Centro, which has exceeded the €3,000/m2 threshold once again (€3,014/m2, up by 3.7%). All of the others sit below this psychological barrier, such as for example Moncloa-Aravaca (€2,793/m2 and 6.9%) and Arganzuela (€2,697/m2 and 8.5%).

The cheapest areas

The cheapest areas in Madrid are Villaverde (€1,232/m2), followed by Puente de Vallecas (€1,307/m2), Usera (€1,398/m2) and Carabanchel (€1,531/m2).

Average house prices will increase significantly in the Madrilenian capital during 2016, according to predictions by real estate analysts.

In Barcelona, Nou Barris is the district where house prices are lowest (€1,752/m2), followed by Horta Guinardó (€2,007/m2) and Sant Andreu (€2,105/m2). They are the only three places in Barcelona where prices are lower than the average price in Madrid (€2,142/m2), however, as is always the case in a market as fragmented as the housing sector, each area has its own micro-market. (…).

In any case, the forecasts are promising, in general terms. “In terms of both the number of transactions and prices, there has been a certain rebound effect following the collapse of the market that had not been seen for many decades. Now we need to wait for the stabilisation of the market, for similar data to that seen last year”, says Jorge Ripoll, Director of Research Services at Tinsa.

For the upwards trend to be maintained, the growth forecasts must be met and the labour market must improve. The other factors are already working on autopilot, at least in Madrid and Barcelona.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

Fotocasa: House Price Rises Led By Madrid & Barcelona

18 January 2016 – Expansión

(…). The two-speed housing sector in Spain is becoming ever more marked: whilst house sales and prices are increasing significantly in Barcelona and Madrid, as well as in certain areas along the coast, the provinces where demand is lowest are continuing their slow trend towards stabilisation.

But the residential sector is so fragmented that even within the two major cities, there are sub-markets where house sales and prices are growing by more than in others. House prices are now increasing in nine out of the 10 districts in Barcelona and in 13 out of the 21 districts in Madrid, according to Housing in 2015, a report compiled by the real estate portal Fotocasa.es, which will be published on Wednesday and to which Expansión has had access.

“The changing trend in terms of second-hand house prices is clear in the city of Madrid”, says the report. The average price of homes for sale rose by 2.2% in the capital, after having fallen by 4.9% in 2014. It is worth remembering that actual sales prices, the amount that is reflected in the deeds, have increased by even more, given that buyers now have less margin to obtain discounts than they used to, when prices were generally on the decrease.

Whilst in 2014, house prices decreased in every district in the capital, last year they recorded increases of up to 13.7% in the Centre, followed by Salamanca (9.3%), Chamberí (8.6%), Tetuán (7.6%), Fuencarral (6.7%) and Arganzuela (6.4%). This results in the report’s first conclusion: well-established, well-located areas, where there is more demand, in other words, prime areas, are recovering more quickly than the rest. In general, such areas include central, well-connected areas, with significant volumes of commercial activity, which are fashionable for certain profiles of buyer.

Barcelona is leading the way

The same trend is happening in Barcelona, where last year, the most notable price rises were seen in the districts of Gracia (with an increase of 10%), Ciutat Vella (8.5%), Eixample (8.4%), Sant-Montjuïc (8.2%), Horta-Guinardó (6.9%) y Sarrià-Sant Gervasi (6.8%).

According to Beatriz Toribio, Head of Research at Fotocasa.es, “prices are going to continue increasing in the prime areas of the two regional capitals in 2016, but we do not expect to see two-digit increases. (…).

In terms of second-hand homes, average prices in Madrid capital amount to €2,695/m2, whilst in Barcelona the equivalent amounts to €3,179. In other words, it is 22% cheaper to buy a home in the Spanish capital than in the Catalan capital. Or, to put it another way, homes are 28% more expensive in Barcelona than in Madrid.

There are two reasons for this. On the one hand, the Catalan capital has a higher population density than Madrid, which affects supply and demand, given that the concentration is greater; moreover, barely any construction takes place there. The second reason is that prices are recovering more sharply in Barcelona.

The most expensive districts in the country are Sarrià-Sant Gervasi (where homes go for €4,575/m2, on average), thanks mainly to significant interest from overseas investors and Salamanca in Madrid (€4,274/m2). (…).

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

Knight Frank: Demand Rises For Luxury Housing In Madrid

23 November 2015 – El Mundo

The luxury residential sector in Madrid has now emerged from the crisis, according to the Prime Residential Report from Knight Frank (KF) for the third quarter of 2015. The study points to price growth of 5.2% in the Spanish capital, i.e. above the levels observed in markets such as London and Paris. The average sales period has also decreased to between 3-6 months, down from 10-12 months.

In fact, Madrid is the European city with the second highest rate of price growth YoY in the prime residential segment, where prices have recorded a cumulative decrease of 22% since the beginning of the crisis, according to KF. Thus, Madrid is ranked behind only Monaco (9.4%) in a classification, which is led by Vancouver (20.4%) (in global terms).

Nevertheless, the consultancy firm acknowledges that the level of activity has slowed down since the summer due to the political uncertainty. In this sense, it stresses that if a stable government emerges from the upcoming general election, then the market will grow at a faster pace, given that “investors have money, desire and intent, but are currently waiting to see what will happen”.

According to the report, the areas of Jerónimos and Salamanca have led the recovery, with price rises of 8% and 7%, respectively, for second-hand homes. Next in the ranking are Chamberí (3%); Justicia and Paseo de la Habana (2 %); Viso (1 %) and finally, Castellana, where prices have remained stable.

In terms of new homes, price rises have been more moderate. Salamanca and Chamberí lead the ranking, with price rises of 4%, followed by El Viso (2%). Justicia and Habana have seen decreases of 2% and 4%, respectively, marked by the low level of stock comprising undesirable properties. In general, the most coveted districts are Salamanca, Jerónimos and Chamberí, which account for 70% of the demand and where the most coveted homes have prices that range between €1 million and €2 million.

By type of investor, 70% of the buyers of luxury homes are Spanish, whilst 30% are international, double the rate recorded two years ago. The overseas demand is coming, primarily, from Latin America buyers, who are seeking luxury products in the centre of Madrid and second homes.

According to Ernesto Tarazona, the Director of KF’s Residential and Land department, average prices are expected to grow by between 5-10% and new homes are expected to enter the market leading to a trend in prices that “we are not used to seeing”.

Canalejas will be one of the iconic projects that will shape the near future, says the Director General of KF, Alberto Prieto, who warns that Spanish demand for that product will exceed international demand. The firm, which will be involved in the sale, has also expressed its interest in participating in the Grupo Villar Mir’s equivalent Canalejas project in London, which is being developed in the former war offices of the British capital.

Over the next 18 months, KF expects to see the development of 80,000 m2 of projects in Madrid, such as Lagasca 99 (Juan Bravo, 3); Lamarca on Fernando VI; José Abascal 48 and Antonio Maura, 8. (…).

Original story: El Mundo

Translation: Carmel Drake

Idealista: Rental Prices Rose By 1.8% In Madrid In Q1

8 May 2015 – El Confidencial

The property crisis; the difficulties faced by thousands of citizens when it comes to buying a home; and the havoc wreaked by evictions have all resulted in a significant boost to the (residential) rental market in Spain. Over the last seven years, many citizens and families have been forced out of the property market and, given their need or desire to become independent or start a family, their only exit has been through the home rental market.

Thus, although owned homes still win by a landslide over rented homes – 78% to 22%, i.e. a very similar level to the one seen at the end of the 1980s – the fact is that in recent years, the balance has tipped a little less towards the property side and although, many experts consider that it is unlikely that we will reach the levels seen in other parts of Europe, where rental properties account for 50% of the residential market in some countries, it is clear that something is changing. “The rental market is here to stay and not just as a lifestyle option, but also as an investment”, says Fernando Encinar, Head of Research at idealista.com.

The rental market in the Community of Madrid is showing the first signs of recovery, as too is the sale and purchase market. Similarly, some areas are sparking greater interest than others in terms of demand, which, in turn, is starting to create a certain amount of tension in terms of prices.

The differences between neighbourhoods are clear. It does not cost the same to rent a flat in the centre of the capital or in the neighbourhoods of Chamberí and Salamanca, where the price per square metre is around €14/m2 (€1,120 for an 80m2 flat) as it does in Villaverde, Carabanchel or Puente de Vallecas, where the price per square metre barely exceeds 8€ (640€ for an 80m2 flat).

These price differences are explained, in part, by the location of the homes – clearly, it does not cost the same to live in the centre of the city as it does in the suburbs – but also due to the excess supply, in places such as Carabanchel and Vallecas, and the strong demand, in areas such as Sanchinarro and Las Tablas, where the experts detect a lot of activity due to the presence of Telefónica and the future arrival of BBVA.

(….)

The tension in terms of rental prices is palpable. Madrid ended the winter with a quarterly increase in rental prices of 1.8%, taking the average price per square metre in the capital to €11.60, however, that represents a cumulative decrease of 15.8% from its record high of €13.80/m2 in 2008.

Moreover, during the first three months of the year, the increase in rental prices was generalised, with rises in almost every district in Madrid, with the exception of Villa de Vallecas and the neighbourhood of Salamanca, according to the data from idealista.com, which also reflects significant increases in the districts of Barajas (5.8%), Retiro (4.7%) and Hortaleza (3.6%).

(….)

Original story: El Confidencial (by Elena Sanz)

Translation: Carmel Drake