Tag: second home

Savills & HomeAway: Spain is the Most Attractive Market for Buying a Second Home

29 September 2018 – Finanzas.com

According to an international study compiled by the real estate consultancy Savills and HomeAwayTM, a global expert platform for holiday rentals, Spain is the most attractive destination for investing in a second home, according to 19.3% of those surveyed, followed by Portugal (13.2%) and France (13.1) in third place.

Spain is attractive for overseas investors

According to the survey, 44% of owners of second residences in Spain are foreigners. The main countries of origin of those owners are the United Kingdom (19%), Germany (12%), The Netherlands (4%), France (3%) and Belgium (2%). The remaining 56% of owners are Spanish.

The main areas where second homes are located in Spain include the Canary Islands (12%), the Costa del Sol (9%) and the Balearic Islands (9%).

Where are they buying homes?

People’s behaviour when it comes to acquiring a second home is different depending on where the buyers come from. The study reveals that British and Dutch owners are those who buy the most second homes outside of their own countries, nevertheless, Spaniards, Italians and Portuguese citizens tend to choose their own countries as the destination for acquiring second homes (around 95%).

Second homes: for personal use and to rent

According to the study, 28% of Spanish owners cover some of their expenses with revenues generated from the rental of their properties and 38% obtain a profit.

Summary of second homes in Spain

The average price of the second homes acquired last year by the Spanish owners surveyed amounted to €245,000, 22% lower than the average acquisition price ten years ago. Moreover, 28% of those surveyed confirmed that they personally financed the acquisition of their second home, 52% acquired it using a mortgage and 8% inherited or were gifted the property.

In the same vein, Spanish owners of second homes obtain an annual income of €12,000 (from their properties) and they rent them out for 19 weeks a year, on average. 43% of owners had the same number of reservations in recent months as they did during the same period a year ago, 41% had more reservations and 16% had fewer.

Second homes, with some specific characteristics

Two-bedroom apartments are the most popular types of second home for the Spanish owners surveyed.

Features that owners are looking for when it comes to buying a second home include: proximity to restaurants and bars (88%), a balcony or terrace (88%) and proximity to the supermarket and shops.

According to Juan Carlos Fernández, Director General for Southern Europe at HomeAway: “The fact that Spain is the most attractive destination for foreigners looking to buy a second home indicates that Spain is a robust market that is very attractive to investors and that is something that we must take care of and promote”.

Owner profile

  • Average age when they acquired the property, in 2017: 51 years old
  • Average number of weeks leased during the year: 19 weeks
  • Typical property type: 2-bedroom apartment
  • Average acquisition price in 2017: €245,000.

Original story: Finanzas.com

Translation: Carmel Drake

Savills & HomeAway: 60% of Second Homes are Bought to Let

17 September 2018 – Eje Prime

Buying a second home with the objective of putting it up for rent. Currently, that is the main reason why more than 60% of owners around the world acquire an asset of that kind, according to a study prepared by Savills and HomeAwayTM.

“In a low-interest rate environment, investors look for assets that generate income”, says Paul Tostevin, associate director at Savills and the person responsible for the report. The situation has changed in recent years, given that, for example, at the beginning of the 2000s, only 14% of second homes were purchased with the objective of letting them and not for personal use. During the credit crisis, that figure increased to 19%.

The average purchase price of a second home in the Spanish market was €245,000 in 2017. Nowadays, almost 40% of owners obtain profits from their properties and approximately 30% partially cover the expenses associated with the asset.

In terms of the location of the asset, less than 5% of the second homes owned by Spaniards are located overseas. The main regions where they do own second homes in Spain include the Canary Islands (12%), the Costa del Sol (9%) and the Balearic Islands (9%). The increase in the arrival of international tourists in recent times has caused the owners of these homes to lease them more frequently to be able to obtain income.

In terms of the rest of Europe, the study reveals that Brits purchase the most second homes outside of their own country. Only 24% of their properties are located within the United Kingdom, 19% are located in France and 16% in Spain.

Original story: Eje Prime

Translation: Carmel Drake

Tinsa: Málaga Leads Resurgence of Spain’s Real Estate Sector

5 April 2018 – Málaga Hoy

The main star of the resurgence of the real estate sector in Spain is Málaga. A report published yesterday by the appraisal company Tinsa reveals that “the province of Málaga, with 35 house sales for every 1,000 homes in the last year, is the region with the highest volume of activity in the whole country”, ahead of Alicante and the Balearic Islands.

This research compares the number of house sales and new home permits with the volume of existing housing stock in order to “identify the most dynamic markets in proportion to their size”. In terms of planned homes, Málaga is one of the provinces that is growing the fastest with 4.8 licences approved for every 1,000 homes in the last year, a similar volume to that of Alicante and Vizcaya, although the highest number of permits in proportion to the existing stock was seen in Madrid and Guipúzcoa.

Málaga is a very sought-after market for the main domestic and international property developers and that can be seen through the high number of residential projects that are currently underway both in the capital as well as at various points along the coast, primarily in Estepona. Several directors in the sector commented recently to this newspaper that Málaga is on everyone’s agenda, at the same level as Madrid and Barcelona, and that the province can expect to see multi-million euro investments.

Logically, that supply is being built because there is demand, although it is unique in the case of Málaga because, in this province, buyers looking for primary residences compete with investors looking for properties to lease to tourists and foreigners who want to acquire second homes on the coast where they can stay for several months at a time. There is tension and that drives up prices and decreases the average transaction term.

According to Tinsa’s report, the average price per square metre in the province of Málaga during the first quarter of this year was €1,479/m2, up by 5% compared to the previous year, including both new and second-hand homes. That represents a considerable boost, but, as the research itself points out, this average price is still 42% lower than the peak reached in the last decade at the height of the bubble. According to the appraisal company, that price increase means that the average mortgage taken out by buyers in Málaga amounts to €120,465 with a monthly instalment of €561, the highest in all of Andalucía.

Homes are more expensive but the time needed to sell them is less because there are increasingly more clients who are willing to pay the asking price. During the first quarter of this year, the average sales period for a home in the province of Málaga was 7.4 months, according to data from Tinsa, whilst over the last three years, the average has amounted to around nine months.

Original story: Málaga Hoy (by Ángel Recio)

Translation: Carmel Drake

Aedas Hands Over its First Homes Since its Creation in 2016

16 March 2018 – Eje Prime

Aedas Homes is following its business plan to the letter and is handing over the first development in its history. The company has obtained its first certification of completion for the Brisas del Arenal development in Jávea (Alicante), a residential project conceived for the second-home market.

The Brisas del Arenal development comprises 64 homes in total with two-, three- and four-bedrooms as well as common areas. After obtaining the official certificate of completion for Brisas del Arenal, Aedas Homes has begun the process to apply for the First Occupancy Licence (LPO), a necessary step before the homes can be handed over.

These 64 homes are going to be the first to be handed over by the property developer in its history and represent an important proportion of the more than 200 units whose keys will be handed over in 2018. 75% of the buyers in Brisas del Arenal are Spanish, with a high presence of people from Valencia and Madrid acquiring holiday homes, and 25% are international, looking for homes for long stays.

In the strategic plan that Aedas presented as part of its stock market debut, the property developer estimated that it would hand over the keys to 1,286 homes over the next two years: 221 homes this year and 1,065 in 2019. Nevertheless, 132 more units have been added to the real estate company’s plans before the end of the first quarter of this year.

Currently, Aedas has 26 projects underway in the five regions of the country in which it has a presence (namely Madrid, Cataluña, Sevilla, the Costa del Sol and Levante&Baleares). By area, the property developer will finish this quarter having laid the first stone of five developments in four of the regions, with the exception of Levante&Baleares, where it will have started six new projects.

Original story: Eje Prime 

Translation: Carmel Drake

Málaga’s Residential Sector is Booming Once Again

11 March 2018 – Málaga Hoy

“We all want to be in Málaga because almost all of the cases there are successful. It is an established location (…)”. That is according to Juan Conejo, Director in Andalucía of the property developer Momentum, and his feelings are shared by the majority of the professionals in the sector who ratify that Málaga is, for the time being, the third largest market in Spain for the construction of new build homes, behind Madrid and Barcelona. This newspaper has been in contact with several of the most important property developers that operate on the Costa del Sol and all of them tell the same story: the crisis is over, the sector has reactivated and thousands of homes are being built or will be soon backed by multi-million investments.

Moreover, the complexion of the market has changed completely. The banks are no long financing the land purchases, but rather property developers are having to look for other resources – in-house, investment funds, asset sales, etc. – and they are only being granted loans to build homes if they can prove that at least 40%-50% of the homes have already been reserved, the famous pre-sales. Financial institutions only lend money if they find safe bets (…).

In this context, Málaga is becoming one of the great protagonists on the national stage because it is playing on several fronts. The capital is an important location for primary residence properties and the coast, primarily to the west of the capital, although there are also some projects to the east, is one of the most sought-after places for foreigners to have second homes.

“Málaga has clearly climbed onto the podium alongside Madrid and Barcelona and it is clear that the market has been reactivating for a year now, whereas other provinces such as Valencia and Sevilla are starting to see movement now”, explains Miguel Ángel Barruso, Director in Andalucía of Avantespacia, a property developer that is building 215 homes in two promotions in Tabacalera – where it has already sold 70% of the properties – and Teatinos, which will be handed over at the end of 2019. “Property developers have not sold any new homes for 10 years and there is significant pent-up demand on the buy-side, and so we are now looking ahead to the next few years with optimism”, added that expert.

Momentum is clear about its commitment to Málaga (…). “Málaga is growing a lot. We have a development in Teatinos that we were going to build in phases but which, in the end, we are going to construct in one go, comprising 300 homes in total, because we already have 50% of the properties reserved; meanwhile, in Colinas del Limonar, we have two other projects with the same level of pre-sales”, said Conejo (…).

Nevertheless, the Regional Director for Momentum emphasises that it is important to move with caution and to analyse each project in detail, especially in light of the current banking demands. “Starting a construction project now is already a success because it shows that you have pre-sold around half of the homes that you are going to build and it is always harder to get customers to buy off-plan, and so we have to analyse very clearly where the demand is”, he said.

Now, professionalism is key. Rafael Torres, Insur’s representative in Málaga (…). Insur is working on two major projects in Málaga capital in the Plaza del Teatro – where work on 57 homes has now started and 50% of the properties have been reserved, some of which have been paid for in their entirety – and in Churriana. It also has several projects in Marbella, comprising 300 more homes. Torres highlights that the market research conducted by his company reveals that there are 83 new home developments under construction or in the pre-sale phase on the western Costa del Sol, of which 40% are in Estepona, Mijas, Benalmádena, Marbella and Fuengirola.

One of the historical Málagan property developers in Myramar, which celebrates its 60th anniversary this year. Its CEO, Miguel Rodríguez (…) says that the company is currently working on four real estate developments in Mijas, Fuengirola and Benalmádena involving around 200 homes (…).

Meanwhile, Rafael Molina, Commercial Director at Grupo Ansan, also corroborates that the real estate sector is currently enjoying good times in the province (…) “we have developments underway in the Carlos Haya area, in Teatinos and in Puerto de la Torre, where we have already sold a significant volume”, he said.

Two other national companies that have set their sights on Málaga are Aelca and Neinor Homes. Jaime Pérez is the Director of Aelca in Andalucía and explains to this newspaper that “we are absolutely convinced about working in Málaga and we have land on which to build 3,200 homes in the province over the next four or five years”. In Málaga capital, his firm has started to market the first phase of an urbanisation in Hacienda Cabello comprising 128 homes – the total project involves 433 units – , they are going to start work in Bizcochero Capitán, they acquired the Flex building on the Cádiz Road and they are going to start to sell 130 homes and a retail area at the end of the year. They also have another project behind Vialia comprising 144 homes and a hotel. Moreover, they have projects in Mijas and Estepona.

Meanwhile, sources at Neinor explain that (…) “Málaga attracts domestic and international demand alike due to its location, infrastructure and climate (…)”. That firm’s portfolio of projects is also very extensive. At the moment, it has 20 plots and 2,166 homes in the province, which corresponds to a turnover of €780 million. In 2018, it is going to launch the sale of seven new projects, comprising 1,076 homes in total, in Casares, Estepona, Benahavís and Málaga capital (…).

Property developers are investing millions in Málaga because they know that there is demand there. Last year, permits were granted for 5,000 homes and, taking into account the projects that all of these companies have in the pipeline, that number looks set to soar over the next few years, which will generate more employment and wealth in the area.

Original story: Málaga Hoy (by Ángel Recio)

Translation: Carmel Drake

Fotocasa: 20% of Investors Rent Out Their Properties as Tourist Apartments

2 December 2017 – Expansión

In the last three years – which have seen the consolidation of the current upward trend in the housing market – an unusual situation has arisen: rental prices have risen by more than property (sales) prices; at the same time, demand for rental properties has soared and hundreds of thousands of homes have appeared on the market, which has resulted in an impasse of high yield and low risk. Given that the returns on traditional investments, such as debt and deposits, are at historical lows, property is shining once again. Without falling into the excesses of the bubble, housing is providing investors with shelter and revenues once more.

Not only that. The appearance of new real estate models has spurred on the financial potential of residential assets, in such a way that 20% of real estate investors are now using their properties as tourist apartments. In other words, one out of every five, according to a study by Fotocasa, to which Expansión has had access.

That high percentage – which is expected to continue growing – is due to the fact that new short-term leasing platforms, such as Airbnb, allow investors to obtain even higher returns than from traditional rental arrangements. In any case, 65% of investors still prefer the stability of having a long-term tenant. The remaining 15% buy homes but do not let them out, instead, they wait for them to appreciate in value before selling them for a profit.

“Now is a good time to buy to let, be it long-term or holiday rentals, given that both formulae are generating returns that, in the current context of low interest rates, cannot be found in any financial product or on the stock market”, explains Beatriz Toribio, Head of Research at Fotocasa (…).

11% of all house purchases are bought for investment purposes. In other words, around 50,000 homes this year. That means that around 10,000 dwellings (the aforementioned figure of 20%) will be used as tourist apartments (…).

More revenues

(…) According to data from Fotocasa, 74% of the owners that in the last year have put a tourist home up for rent through the online portals and platforms say that they obtain more revenues through their tourist rentals than from residential letting. 66% of those calculate that they obtain between 5% and 15% more; 16% say that they receive between 15% and 20% more; and 12% state that they can earn 20% more than from long-term rentals.

It is a buoyant time for savers and investors. Almost half of those who buy a home that is not going to be their primary residence, do so as an investment (45%), whilst 55% acquire, in theory, to have a second home. But, almost 40% of the latter group consider putting that home up for rent for short periods of time – for example, during the summer when they are not on holiday there – whilst 7% end up opting for long-term rentals (…).

Rental prices are currently increasing at a YoY rate of around 10% and second-hand house prices are rising by around 5% YoY, according to Fotocasa. Those figures increase to 10% and 20% in certain districts of Madrid and Barcelona, the two major investment centres (…).

The saturation of tourist apartments in Madrid and Barcelona is causing a great deal of political debate. The Town Hall of the Cataluñan capital, led by Ada Colau, first fined Airbnb for its 6,000-7,000 illegal tourist rental properties, and at the same time announced “more forceful legislation”. Then, in the summer, it reached an agreement to make a list of the apartments that were breaking the law. This week, the platform has withdrawn 2,500 advertisements in Barcelona, 1,200 thanks to that agreement with the Town Hall and 1,300 after a limit of one home per person was placed on the number of entire houses that a single owner may have in Ciutat Vella.

Controversy aside, which are the best homes for investing in a tourist apartment? The price and the number of rooms are the basic requirements that buyers look for, but “those who are looking to invest prioritise aspects relating to the area, such as transport links (44% vs 31% for the overall purchasing population), a nice neighbourhood (46% vs 38%) and the services in the area (37% vs 30%) (…).

Tourist rentals have one fundamental disadvantage: “They require more effort and time, due to the high turnover of tenants, especially if the owner manages that side of things him/herself, without the help of a professional”, says Toribio. “That is the main reason why two out of every 10 lessors abandon this type of rental arrangement after giving it a try”, she reveals.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

Lucas Fox: Luxury Home Sales Soared By 31% In 2016

27 February 2017 – Expansión

Luxury homes enjoyed a buoyant 2016. Sales soared by 31% thanks to the boost from foreign investors, above all in cities such as Barcelona, where the purchase of high-end residences increased by 69%, according to the latest report from the real estate company Lucas Fox, which specialises in high-end homes. In Madrid, the increase amounted to 12%.

The study attributes this mini-boom to the declining demand for properties in London following the Brexit referendum. That “has caused citizens from outside the EU to be more interested in Madrid and Barcelona, and the trend is set to continue in 2017”.

Foreign investors will continue to be the main driver behind Spain’s luxury residential sector. They now account for 65% of the market, according to the real estate company. The remaining 35% are Spaniards.

Buyers from the UK and Ireland accounted for 11% of overseas purchasers in 2016, whilst French buyers accounted for 5%. Purchasers from the Middle East were the cohort that grew by the most, to account for 8% of all luxury residential property purchases. Scandinavian buyers accounted for 6%.

In terms of buyer motivation, 30% acquired a property as a primary residence and 43% as a second home. It is worth remembering that 75 million tourists visited Spain last year, a historical record. There was also a considerable increase in the number of buyers who purchased properties for investment purposes (22% of all purchases by overseas buyers). Finally, 3% bought because they were looking to obtain a Golden Visa, in other words, the permit to reside in Spain that is granted to real estate investors from outside the EU.

In fact, Lucas Fox estimates that demand for Spanish properties from buyers outside the EU, including from the USA and the Middle East, “will cause the current bullish trend to continue throughout 2017, thanks to the Golden Visa program”.

During the first three quarters of 2016, foreigner buyers spent just over €47 million on new build and recently renovated properties, which represents a YoY increase of 9%. The apartments that are most in demand are those located in classic buildings in prime areas, measuring between 150 m2 and 200 m2 and worth between €1 million and €1.5 million.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

Why Did Foreigners Buy 72,000 Homes In Spain In 2014?

8 May 2015 – Expansión

When it comes to buying homes in Spain, foreigners are primarily motivated by the quality of life, the sun and good flight connections to their home countries.

The volume of house sales increased by 21.6% in 2014. In total, 365,594 transactions were closed, according to the Ministry of Development. It is clear that the real estate market has begun its recovery and, to a large extent, that is due to the interest that the real estate market is sparking amongst investors from overseas. Purchases by foreign residents in Spain have grown in recent months, partly due to the incentives that the Government has introduced – mainly the residence visa – but above all due to the opportunities offered by the real estate market here. Foreigners purchased more than 72,000 homes in Spain last year and the average transaction value was €152,000.

But, who are these foreigners that are purchasing homes in Spain and what is it that draws them to our country? “Many of these overseas investors are tourists who come to Spain on holiday and after spending time here, decide to invest in a second home”, says a study performed by TM Grupo Inmobiliario, which has a stand at the SIMA (Salón Inmobiliario de Madrid or Madrid Real Estate Fair) being held until 10 May. “They are primarily motivated by the quality of life, the sun and good flight connections to their home countries”, says the report, which concludes that the profile of the average purchaser is a man, aged 53 years-old, with children. On average, these purchasers have an annual income of €66,000. There is also a significant percentage of resident buyers in our country who are making Spain their new home given the improvement in the economic environment.

Britons are the nationality most interested in purchasing homes in our country; they accounted for 18.62% of all transactions closed by foreigners (in 2014). They are followed by the French (9.39%), Germans (7.25%), Belgians (6.90%), Italians (6.13%), Russians (5.83%), Swiss (5.83%), Chinese (4.14%) and Norwegians (3.74%). In recent years, interest from Russian nationals in Spain had increased significantly, but the decline in the Ruble and in the price of petrol (last year) reduced their desire to purchase. There is also a great deal of interest from Mexicans and Colombians in buying a home in our country, but in absolute terms the numbers are not yet significant. The vast majority of them have a high purchasing power and are buying second homes here.

The decrease in house prices has not affected all areas equally, but overseas investors are primarily interested in three main areas: the Mediterranean Coast (Barcelona, Alicante, Girona and Málaga), the Islands (above all Mallorca, Ibiza and Tenerife) and Madrid.

Original story: Expansión (by E.V.)

Translation: Carmel Drake