INE: Foreigners Account For 82% Of Overnight Stays In 5-Star Hotels

29 August 2017 – El Economista

Foreigners who visited Spain in July registered more than 1.9 million overnight stays in five-star hotels, representing 82% of the total number of nights sold in the most luxurious category of hotel accommodation.

According to data extracted by Servimedia from the Tourist Hotel Environment Survey from the National Institute of Statistics (INE), five-star hotels recorded the highest percentage of clients from overseas, exceeding the average for hotel accommodation as a whole, where foreign clients accounted for 67.2% of all rooms, by 15 percentage points.

In fact, 6.5% of the overnight stays by foreigners in Spanish hotels were registered in five-star hotels, a percentage that more than doubles the 2.8% recorded by domestic clients in high-end establishments.

Meanwhile, four-star hotels registered more activity in Spain by both overseas and domestic tourists. The presence of foreign clients amounted to 69.3%, with 14.6 million overnight stays, compared to 6.4 million overnight stays by domestic visitors.

This figure of overnight stays in four-star hotels accounted for 49.7% of all stays registered by overseas tourists in the country, compared to a percentage of 45.2% in the case of domestic tourists.

If we add together the overnight stays registered in the two highest categories, we see that 56.3% of the foreigners that visited Spain in July slept in four and five-star hotels, whilst in the case of Spaniards, that percentage amounted to 48.1%.

After four star hotels, the accommodation most used by foreigners and by local tourists alike were three-star hotels, which hosted 33.2% of overseas tourists and 28.8% of domestic visitors.

Specifically, international tourists registered 9.7 million overnight stays in three-star hotels in July, accounting for 70.2% of the total in that category, compared to 4.1 million domestic overnight stays.

In the remaining categories, 1.4 million overnight stays or 4.7% of the total number of stays by foreigners were in two-star hotels; 0.4 million or 1.5% were in 1-star hotels; 0.5 million or 1.9% were in three- and two-star hostels; and 0.6 million or 2.1% in one-star hostels.

Of these four categories, domestic clients accounted for a higher percentage of total stays than foreigners in the lowest three, whilst overseas tourists accounted for 52.2% of overnight stays in two-star hotels. Specifically, domestic clients accounted for 54.3% of stays in one-star hotels, 58% in three- and two-star hostels and 50.7% in one-star hostels.

Original story: El Economista

Translation: Carmel Drake

Solvia: 71% Of Spaniards Think Now Is A “Good Time” To Buy A Home

19 April 2017 – El Mundo

71% of Spaniards think that now is a “good time” to buy a home, according to a study conducted by Solvia, a subsidiary of Banco Sabadell, and the research institute Kantar TNS, which have prepared a real estate confidence index to quantify the perception and expectations of Spaniards regarding buying a home.

According to the results of the index, which ranges between values of zero (for the most unfavourable perceptions) to 200 (for the most favourable), the situation in terms of real estate confidence amongst Spaniards is “positive”, since the index value currently stands at 112. The index, which has been prepared on the basis of interviews with 1,000 people, reveals that 71% of those surveyed believe that, in general, now is a “good time” to buy a home. The report’s authors highlight the following main arguments as justification for respondents’ answers: “the decrease in prices that the housing market has seen; the notion that buying is a good investment; and the fact that the market is currently offering some genuine opportunities”.

By contrast, the study adds that the interviewees’ perception changes when they are asked about their personal circumstances. In this sense, 61% of Spaniards consider that from their own individual perspective, now is a “bad time” to buy a home.

In this regard, employment conditions and the limited capacity to save, with the consequent difficulties involved in accessing financing, explain the negative perception held by Spaniards when it comes to acquiring a home now. Nevertheless, the people interviewed hope that, within two years, they will be in a better position financially to buy a home, thanks to improvements in their employment conditions.

In terms of the evolution of house prices over the last year, 35% of Spaniards think that prices have risen, compared with 43% who believe that house prices have remained stable and 22% who consider that they have decreased.

Finally, buying a home is the option that the majority of those interviewed (55% of the total) would recommend to family and friends thinking about their primary residence.

Original story: El Mundo

Translation: Carmel Drake

Eurostat: 78.2% Of Spaniards Own Their Homes

21 March 2017 – El Mundo

78.2% of Spaniards own a home, a figure that puts Spain amongst the countries with the highest percentage of home ownership in the whole European Union, according to data from Eurostat corresponding to February 2017, compiled by the Institute of Economic Studies (IES).

The percentage of Spaniards that own a home is almost nine points higher than the EU average, which stands at 69.5%.

Nevertheless, some countries in the EU have an even higher ownership rate than Spain – all of them are recent accession countries.

Romania leads the ranking with 96.4% of people owning homes. It is followed by Croatia (90.5%), Lithuania (89.4%), Slovakia (89.3%), Hungary (86.3%), Poland (83.7%), Bulgaria (82.3%), Estonia (81.5%), Malta (80.8%) and Latvia (80.2%).

Countries that fall below the average include the Netherlands (67.8%), France (64.1%) and the UK (63.5). Those countries with the lowest home ownership rates include Germany (51.9%), Austria (55.7%) and Denmark (62.7%).

Original story: El Mundo

Translation: Carmel Drake

Spain’s Rental Market Is Thriving, Boosted By Buy-To-Let

9 January 2016 – Expansión

Thanks to strong investor appetite / The high profitability of residential investments has increased expectations in the rental market, given that it is the option now chosen by 21% of Spaniards. Experts forecast rental price rises of more than 5%.

The rental market closed 2016 with price rises of 6.7%, but in many large cities, the increases were in the double digits. The difficulties facing young people when it comes to affording a home, the emergence onto the market of hundreds of thousands of homes that were empty and the high returns of real estate investments have increased expectations for this residential option, once forgotten in Spain and which is now the alternative chosen by 21% of Spaniards.

This year, “given that interest rates are not expected to rise in Europe over the medium term, housing will remain attractive as an investment asset”, said Jorge Ripoll, Director of Research at Tinsa. “Speculative demand will push more and more savers towards the sector”, predicts Miguel Cardoso, Chief Economist for Spain at BBVA Research.

In this context, the consensus of the panel of real estate experts consulted by Expansión is that the rental boom will not only continue during 2017, but that the rises may even be larger, especially in the large cities. Julián Cabanillas, CEO at Servihabitat, highlighted that his forecasts indicate an average YoY growth in rental prices “of more than 10%”.

The increase in prices will be “particularly noteworthy in the large cities, whose weight over the national average is also more significant”, added Cabanillas, who warned that: “If prices continue to rise in the double digits, many households will be priced out of the market, particularly those formed by young people”.

The President of Tecnitasa

José María Basañez points out that “during the last few months of 2016, the rental market in Spain was more robust than the market for house sales”, a trend that will continue into 2017, in his opinion. “Therefore, we may well see price rises of more than 5%, on average”. (…).

Other analysts, such as Julio Gil, Chairman of the Foundation of Real Estate Studies, and José García Montalvo, Professor of Economics at the Pompeu Fabra University, think that the rental price rises will be more moderate. Nevertheless, like in the case of house prices, “there will be areas where rental prices will grow more quickly (such as in Madrid, Barcelona, the Canary Islands and the Balearic Islands)”, said Montalvo.

“The rental market is here to stay in Spain. We are seeing a change in mentality, with more and more people convinced that it is the way forward”, says Beatriz Toribio, Director of Research at Fotocasa.

House prices are also rising

Finally, it is worth noting that two new phenomena are being seen in the rental market. On the one hand, rental prices are rising and the volume of house sales are increasing, as Jaime Cabrero, President of the Real Estate Agents’ Association in Madrid, explains. On the other hand, the rise in rentals is making house purchases more expensive, according to Juan Fernández Aceytuno, Director General at Sociedad de Tasación: “The rental market is causing house prices to rise because there are increasingly more investors who are buying properties to rent”. “The high returns offered on buy to let properties are behind the tensions in terms of prices that we have been seeing and will continue to see in 2017”, adds Toribio.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

Housing Crash Turns Spain’s Young Into Generation Rent

30 November 2016 – Bloomberg

Having witnessed the meltdown in the country’s property market at the height of the European financial crisis, more young Spaniards are turning their backs on their parents’ dream of owning a home. The emerging trend is leading Merlin Properties Socimi SA to bet it can overtake Goldman Sachs Group Inc. and Blackstone Group LP in the rental market. Spain’s biggest real estate investment trust is planning to almost double the units it has for rent by the end of the year, Chief Executive Officer Ismael Clemente said in an interview.

“Young Spaniards today don’t have a culture of ownership — they no longer see renting as a bad thing,’’ he said.

The real estate crash and resultant bank bailout spurred many millennials to question the received wisdom that a Spaniard’s house is not just a home but also a haven for savings. The crisis sent unemployment soaring, stripping away the economic certainties of a safe job and income and the relentless rise in property prices that had underpinned the country’s passion for home ownership.

“The concept of owning a home in Spain was almost religious, but that’s changed for an entire generation of young people who have seen people losing their homes, prices dropping and losing access to credit,” said Fernando Encinar, co-founder and head of research at Idealista SA, which operates an online platform to buy and rent homes. “That has made renting a more attractive option, especially in big cities such as Madrid and Barcelona.”

Credit Explosion

Spain’s adoption of the euro in 2002 drove down long-term interest rates to power a surge in mortgage lending that jumped more than fourfold from 2000 to its 2010 apex. The top of its property boom saw Spain building more houses than Germany, France and the U.K. combined, and house prices soared in tandem with the credit explosion. After rising 71 percent between 2003 and 2008, when home prices peaked, they then plunged 31 percent before starting a slow recovery in late 2014.

The number of homes listed for rent has risen from 9 percent of the total number of available homes in big cities in 2000 to as much as 25 percent in 2015, according to Idealista. The proportion of Spaniards renting a home has risen to 22 percent from 19 percent in 2007, according to data from Eurostat, the European Union’s statistics office.

That compares with a European Union average of 30 percent. Even so, home ownership continues to dominate with 78 percent of Spaniards describing themselves as owners. That’s slightly down from 81 percent in 2007 but above the EU average of about 70 percent.

No-Brainer

For Guillermo Garcia, a 26-year-old restaurant entrepreneur, the decision to rent instead of buying a three-bedroom apartment in central Madrid was a no-brainer.

“Owning a house is not a sign of success,” he said. “I don’t have to live like my parents did. I don’t want to sign away my life like that.”

For Merlin, the rising popularity of rentals represents a business opportunity.

“Until now, there has been no professional landlord in Spain and the quality of the rental sector has been very poor,” Clemente said in the interview.

As part of Merlin’s business combination with Metrovacesa SA announced in June, the two will also merge their portfolios of rental apartments. Merlin and the former shareholders of Metrovacesa will combine the properties and add more apartments to create a landlord with 10,000 rented homes, dwarfing the 6,000 units owned by Blackstone in Madrid and the close to 5,000 homes owned by Goldman Sachs.

Clemente, who wants to list or sell its residential unit — Testa Residencial — within three years, sees the switch to renting as part of a wider generational change that’s also underway in his own home.

“My children don’t have a culture of ownership,” he said. “They rent their mobile handsets from Telefonica, they listen to music on Spotify and they simply no longer see renting as a bad thing.’’

Original story: Bloomberg (by Maria Tadeo and Sharon R Smyth)

Edited by: Carmel Drake

Tinsa: House Prices Rise By Most In Madrid & Barcelona

18 July 2016 – Expansión

The Balearic and Canary Islands are featuring in the housing recovery, but Madrid and Barcelona are leading the way; there, the number of transactions has picked up pace and prices are growing strongly once again. Most of these increases are due to the economic recovery, but the savings factor is also playing a major part.

In fact, the influence of private investors is still playing a crucial role in the strengthening of the two major real estate regions, whose central districts are the most sought-after by companies and individuals, both Spanish and foreign.

It is precisely the influence of these investors that boosted property prices in both capitals in the first place, firing the starting gun for the reactivation of the sector, as they committed to the prime areas before anyone else. These central districts, which are well-connected and offer good services, used to offer a certain degree of security for investors, and a great deal of potential for appreciation, even when everyone in the market was still searching for land.

Both cities were amongst the leaders of the increase in house prices during the second quarter of the year, according to data from the appraisal company Tinsa, published recently. Nevertheless, these increases were concentrated in some of the most expensive areas, as shown by the analysis by district of the local markets. Specifically, many of the neighbourhoods where prices stand at around €3,000/sqm in Madrid and Barcelona are also those where prices have risen by the most in the last year, whereas prices in those neighbourhoods that fall below the average have grown more moderately.

For example, prices in the Madrilenian neighbourhood of Salamanca have risen by 9.8% in the last year, whilst in Chamberí they have increased by 8.9%. Meanwhile, in Barcelona, the following districts stand out: Gràcia (where prices have risen by 12.7%), El Eixample (10.9%) and Les Corts (8.1%). These statistics show that the prime areas are recovering better than the rest. They are central, well-connected areas with very solvent demand, where returns are high and there is significant retail activity, which means they have significant potential for appreciation both for those buying to invest as well as those looking to put their properties up for rent. As with everything, there are notable exceptions, such as the Retiro area in Madrid and Sarrià-Sant Gervasi in Barcelona, which are increasing by below the average.

Other areas

Nevertheless, the real estate expert José Luis Ruiz Bartolomé indicates that the real estate market has now entered a new phase, in which the recovery is spreading to more and more areas. “Before, properties were only being sold in the best districts, but now the increases have spread to the most popular areas, as supply is limited and there are increasingly more buyers looking for homes to live in, rather than to buy as investments”, he explains.

For this reason, the most popular neighbourhoods have become more attractive with the recovery of the labour market and the opening of the bank financing tap. In this way, house prices in the Madrilenian neighbourhood of San Blas have risen by 9.9%, making it the second highest price rise district in the capital; meanwhile, Sant Andreu is also boosting prices in Cataluña, with an increase of 8.2%. Similarly, prices in all of the districts of Madrid that cost less than €2,000/sqm have increased by more than the average, with the exception of Villaverde, the cheapest of all, where prices have remained stable. Something similar is happening in Barcelona where the most popular areas, such as Nou Barris and Sants-Montjuïc, also grew by more than average. (…).

Moreover, Tasaciones CBRE indicates that the profile of investments funds “has evolved rapidly from being opportunistic to value-added, choosing instead to back development, the renovation of properties and, given that they have perceived the potential for refurbishments, they will gradually start managing plots of land in urban areas, with the aim of obtaining higher returns”. With this, the increase in demand and prices will increasingly move to more remote areas. (…).

Original story: Expansión (by Pablo Cerezal)

Translation: Carmel Drake