Tag: slowdown

Signs of a Slowdown Arise in Barcelona

1 July 2019 – Richard D. K. Turner

After years of sequential, significant increases, the residential housing market rose by a mere 1.6% in Barcelona, over a period of twelve 12 months. The same figure for the first two quarters of the year reached -1.7% q-o-q, according to Tinsa, as prices began to fall at the end of last year.  

Residential housing prices fell by 2.6% y-o-y in the Ciutat Vella, the historic centre of Barcelona. Moreover, while not a single district in Barcelona saw growth in excess of 10%, the highest growth came in peripheral areas of the city. A similar tendency was evident in Madrid, where peripheral areas also saw significant growth.

The city of Salamanca, on the other hand, saw growth of 11% last year, bringing the average price of finished housing (new and used) to 5,161 euros per square meter, the only district of the five major Spanish capitals with prices above 5,000 euros. In Valencia, almost half of the districts recorded increases of more than 10%.

Original Story: El Confidencial – E. Sanz

 

Spanish Government Fears a Slowdown in Tourism Due to Fall in Arrivals by Germans and British

31 August 2018

COMPETITION FROM GREECE, EGYPT AND TURKEY / “The symptoms of the slowdown we have observed are beginning to consolidate,” Turespaña expects the year to end with “very moderate, zero or negative growth.”

The Government of Pedro Sanchez has added its voice to the experts forecasting a turbulent year for tourism, believing that the sector could end the year with “very moderate, zero or negative growth.”

Successive falls in the main indicators (e.g. hotel occupancy rates, overnight stays, prices) and comments by representatives of the sector, such as Exceltur, sounded the alarm several months ago, warning that the sector was in the throes of a slowdown.

“The behaviour of our three major emitting markets, and that of Italy, the Netherlands and the US, can tilt the balance between very moderate growth and zero or negative growth,” the Spanish government warned through Turespaña in its Quarterly Prospective Report for International Tourism, published at the end of August.

“We must not forget that 2017 was an absolute record year across the board,” sources at the Ministry for Industry, Trade and Tourism said in statements to this newspaper. In 2017, Spain received almost 82 million tourists, a figure that made Spain a world leader in international arrivals, only behind France.

Even so, the forecast for arrivals for the period from July to October is positive, with an estimated increase of 2.4% in the number of tourists, for a total number of arrivals for this period nearing 38 million.

The report notes that “the symptoms of the slowdown we have observed are beginning to consolidate.” The problem is that Spain’s two principal emitting markets for tourists both began to opt for other destinations. The price of oil, the appreciation of the euro, the effects of Brexit and the insecurity generated by the independence movement in Catalonia are some of the proximate causes. In July, the number of German tourists who visited Spain fell by 11%, and the number of British arrivals fell by 6%. Between July and October, Turespaña expects British tourists to fall by 4.2%, and overnight stays by Germans will fall by 5.1%.

German tourists begin to replace Spain with Greece as a destination. “Although it is less well-known than Spain, it gets higher marks ​​in the minds of German tourists as a unique destination,” says another report by Turespaña. In the case of British tourists, Turkey and Egypt have recovered their shares of the reservations of tour operators, to the detriment of Spain, which registered a fall of 4% in reservations between July and October, losing a 3.6%-share.

Turespaña does expect that tourist spending will continue to increase at a good pace, with an expected increase of 5.3% between July and October. “We are working to attract tourists with greater purchasing power and to lengthen their stays to increase spending,” they explain.

Original Story: ProOrbyt Expansión – I. Benedito

Translation: Richard Turner

 

RE Portals Regard Lower Rate Of House Sales Growth As “Normal”

30 April 2017 – Europa Press

The real estate portals regard the moderation in the growth in house sales in February (which rose by only 1.2%, according to data published in April by INE) as a “symptom of normalisation”. They also believe that this data should not be interpreted as a “step backwards”, given that “very positive”, albeit “less bulky” figures are predicted for 2017.

The Head of Research at Idealista, Fernando Encinar, said that, although the figures are not “spectacular” and the statistics reveal a month-on-month decrease, they are still “positive” since they represent the best month of February since 2011.

Moreover, he said that if we take into account the homes sold during the last twelve months, the figure amounts to more than 410,000, which is 14% higher than during the previous 12 months. Moreover, this figure that “is getting closer to a normalised market”.

In addition, the Head of Research at Fotocasa, Beatriz Toribio, considers that this slowdown in the growth in house sales is a consequence of the trend towards normalisation in the Spanish real estate market.

“2017 will be a very positive year for the sector, in which we expect the recovery to be consolidated, although it is true that the increases in the different statistics that measure the sector’s health may not be as bulky as last year”, she explained.

A “very positive” year, with a “slow and moderate” recovery

According to Toribio, the sector is resuming its activity “in a firm and consolidated way, thanks to the return of credit, the improvement in the economy and interest from investors in homes”, but she states that “we should not forget that we are starting from a very low level, after the significant decreases recorded during the years of the crisis”, which means that the recovery will necessarily be “slow and moderate”.

Andalucía, Cataluña, the Community of Valencia and the Community of Madrid were the autonomous regions that recorded the highest number of operations (during 2016), which shows that “the improvement in the sector is not distributed evenly (across the country)”.

Finally, the Head of Research at Pisos.com, Manuel Gandarias, highlights that the sales figure has now exceeded one continuous year of increases. “The YoY data for the month of February shows a decrease compared to the figure in January, which is not the case if we take into account the fact that the data reflects operations undertaken between the end and beginning of the year when there are typically fewer signings”, he added.

In this sense, Gandarias explained that, although it is true that the YoY increase is “minimal” and is no longer in the double digits, the data “should not be interpreted as a step backwards, in any way”, but rather that it represents a “symptom of normalisation, given that we are no longer making comparisons with negative figures”. “It continues the positive trend, which has now been recorded consecutively for the last 13 months”, he said.

Original story: Europa Press

Translation: Carmel Drake

Sabadell & Bankia Finalise RE Portfolio Sales To Sankaty

29 June 2016 – Expansión

Spanish banks and international funds are negotiating against the clock as they seek to close operations worth hundreds of millions of euros within the next few days. Entities have offers on the table for real estate assets worth almost €4,000 million. And some of them are expected to bear fruit today or tomorrow, so that they can be accounted for in the half-year results.

The negotiations are even more frantic than in previous years due to the slowdown caused by the electoral calendar, which caused opportunistic funds to be prudent with their offers. One of the most influential factors was the fear that Podemos would enjoy electoral success.

Now that the uncertainty (surrounding Podemos) has been resolved, Sabadell and Bankia have been particularly agile in reaching agreements.

Yesterday, the Catalan entity sold a portfolio containing €460 million of problem assets linked to property developers, as part of Project Pirene. The buyer is the fund Sankaty Advisors, a subsidiary of the US giant Bain Capital. Sources in the market estimate that the investor paid Sabadell between €150 and €200 million for these assets.

Dominant investors

Sankaty’s interest in Spain has not been limited to that portfolio, given that it is close to securing another deal that has attracted significant interest from other large international investors: Project Lane, sold by Bankia, comprising 2,500 homes worth €400 million. This is the first portfolio to emerge from the carved up Project Big Bang; the entity had wanted to sell all of its foreclosed assets together, but that plan was suspended at the end of last year. Sources expect to know whether this operation will go ahead within the next few days.

The sale of the other two asset portfolios that Bankia has on the market are proceeding more slowly: one contains non-performing mortgages – Project Tizona – worth €520 million; and the other contains non-performing property developer loans – Project Ocean – amounting to €400 million.

Sankaty expects the recovery of the Spanish real estate sector to go beyond Sabadell and Bankia’s portfolios, as indicated by the fact that it is one of the main favourites to acquire Project Baracoa, from Cajamar. That will be the first sale of bankrupt loans by a Spanish bank. In total, the rural savings bank is looking to get rid of €800 million of these types of loans, which account for 70% of all of its bankrupt assets. 85% of them are secured by real estate collateral.

Another operation that is generating significant interest is Project Carlit, launched by CaixaBank, through which the Catalan group wants to transfer €790 million of doubtful loans to property developers. The bid is in its final phase with two key favourites in the running: Cerberus, which according to sources consulted is “putting all of its eggs into one basket”; and the alliance between Goldman Sachs and TPG, two US investors who have joined forces in the past. The US fund D. E. Shaw is also through to the final round, but it has not participated in any operations in Spain for a long time and the market considers that it is less likely to win the portfolio.

CaixaBank has another major operation underway: Project Sun, through which it wants to sell 155 hotel assets worth almost €1,000 million.

Another one of the most active entities is Abanca, which recently sold €1,400 million in non-performing loans to EOS Spain and which will be negotiating the sale of €400 million property developer loans over the next few weeks.

Original story: Expansión (by J. Zuloaga)

Translation: Carmel Drake

INE: Mortgage Signings Rose By 15.9% In February

28 April 2016 – Expansión

The signing of new mortgages to purchase homes increased by 15.9% in February, up from the 10.6% increase recorded in January, but well below the rises seen in years gone by. In total, 24,887 mortgage contracts were signed, according to the provisional data published yesterday by Spain’s National Institute of Statistics (INE).

Experts in the sector point to a slight slowdown in the recovery, given that although the data is positive and growth remains in the double digits, it is significantly lower than the rate of growth recorded just a year ago, according to Fernando Encinar, Head of Research at the real estate portal idealista.com.

In the same vein, Beatriz Toribio, Head of Research at fotocasa.com, notes that we have seen a moderation in the growth of mortgage lending in Spain in January and February, and that this has come despite the broad and competitive range of mortgage products that the banks are offering. Nevertheless, Toribio points out that we have now seen 21 consecutive months of increases “and that tells us that mortgage lending is now normalising in our country”.

In her opinion, for the real estate sector to recover completely, the lending figure has to be consolidated because without financing, there will be no recovery.

Meanwhile, the Director of Research at pisos.com, Manuel Gandarias is more optimistic. He thinks that “the annual variation will continue to grow in a significant way, and if it does so throughout the next quarter, then we will be talking about continuous growth in mortgage lending for two consecutive years”.

During 2015, and so far in 2016, the number of homes purchased using financing has grown stronger as a percentage of the number of total purchases to account for three out of every four acquisitions.

The value of mortgages constituted over homes in February amounted to €2,699.2 million, up by 14.4% compared with the same month in 2015 and by 9.7% compared with the previous month. This type of loan, for the acquisition of homes, accounted for 54.2% of the total in February. One of the main findings to emerge from INE’s data relates to the interest rates being applied to loans.

Original story: Expansión

Translation: Carmel Drake