Mitula: Rental Prices Soar In Spain’s Large Cities

25 January 2017 – El Mundo

The residential rental market is riding high at the moment and this good situation is reflected in rental prices, which are soaring in most of Spain’s major cities, according to a study by the home finder Mitula. Specifically, rental prices have increased by more than 60% in Barcelona over the last five years, whilst in Madrid, they have risen by almost 20% during the same period.

In this way, average rental prices in the Spanish capital amounted to around €1,048 per month in 2012, a figure that has grown in a sustained way over the last five years. By January 2017, the average rent in Madrid stood at €1,256, which represents an increase of 19.85%.

Other cities such as Barcelona and Palma have also seen their residential rental prices soar, but to an even greater extent. In the case of the Catalan capital, for example, the average rent has risen from €892 in January 2012 to €1,478 in January 2017, which represents an increase of 65.70%.

Palma has also seen its rental prices move upwards. A rental home in the capital of the Balearic Islands used to cost around €700 per month on average in 2012. Nowadays, the same property costs around €1,000 (€986), up by 40%, according to Mitula.

This upwards trend is being repeated in most of Spain’s major capitals, but there is one exception: Santander. The capital of Cantabria is one of the few cities where rental prices have remained practically frozen. At the moment, a rental home costs €649 per month, on average, which is 2.84% less than five years ago, when the figure stood at around €668/per month.

Original story: El Mundo

Translation: Carmel Drake

Fotocasa: Rental Prices Rose By 4.8% YoY In June

18 July 2016 – Expansión

Over the last three years, the prices of most goods and services have remained stable, to the extent that many economists have come to fear that Spain will enter into a period of deflation. Nevertheless, in the midst of these “doldrums”, there is a market where prices have already started to pick up pace: the residential rental sector. According to the latest data from Fotocasa, residential rental prices rose at a rate of 4.8% YoY in June, just two tenths below the historical maximum, recorded in 2006, when the index was first compiled. (…).

As with everything, this market also reflects the two speeds that are being seen in other segments. In this way, prices grew by 15.7% in the Balearic Islands, but remained stable and even decreased in La Rioja, Extremadura and Castilla-La Mancha, reflecting the demographic and tourist pressures in one of the areas and the lack of strength in the others. After the islands, comes Murcia, where rental prices rose by 11.3%, followed by Cataluña (10.7%), Comunidad Valenciana (10.5%) and Madrid (9.9%). All of the other regions fall a long way behind, well below the average.

Something is changing in the rental market. “There is no longer a single market, but rather areas that vary significantly by district and even by street. For example, in Barcelona, rental prices have risen by more than 20% in several neighbourhoods: Gràcia, Sants and Ciutat Vella”, says Beatriz Toribio, Head of Research at Fotocasa. In addition, whilst before the highest rental price increases were seen in those cities with the highest economic growth, now prices are rising by the most in the most popular tourist destinations. That is because tourists are increasingly opting to stay in private accommodation instead of hotels, and increasingly more owners are putting their homes up for rent for this purpose, given that they offer higher returns.

Although this type of housing does not enter into Fotocasa’s calculations, the use of residential properties for this purpose significantly limits the supply of homes, which drives prices up. For example: rental prices rose by 7.1% in the capital of Valencia with respect to last year, but soared by 19.6% in Peñíscola, 21.6% in Gandía, 25.6% in Benidorm and 49% in Santa Pola. (…).

The major exception to this changing pattern in the Canary Islands, where rental prices grew by 3.8%, below the average. That rate of growth was in line with Andalucía (where prices rose by 4.3%, also driven by many towns along the coast), Navarra (where prices also rose by 3.8%), Cantabria and Galicia (3.5% in both cases). There were also significant price increases in Asturias (3.2%), Aragón (3%) and Castilla y León (2.4%).

Finally, prices remained stable or decreased in just four autonomous regions: País Vasco (where rental prices rose by 0.8%), Castilla-La Mancha (0.6%), Extremadura (where they remained stable) and La Rioja –where they decreased by -0.2%.

As a result of the price increases in the last year, Madrid and Cataluña have joined the league of autonomous communities where rents now cost more than €10/sqm, following the path set by País Vasco. These regions are followed by the Balearic Islands (€9.16/sqm) and then Navarra (€7.11/sqm). The cheapest rents are found in Castilla-La Mancha and Extremadura, at less than €5/sqm, followed by La Rioja, Murcia and Valencia (between €5/sqm and €6/sqm).

Original story: Expansión (by P. Cerezal)

Translation: Carmel Drake

Fotocasa: Rental Prices Record Highest QoQ Rise For 9 Years

22 April 2016 – El Economista

Average residential rental prices in Spain rose by 3.1% during the first quarter of the year, which took the price as at March 2016 to €7.24/m2/month, according to the latest data from fotocasa’s Real Estate Index.

The real estate portal explained that this quarterly increase in residential rental prices represents a continuation of the predominant trend seen in 2015, the year in which rental prices started to rise again after eight years of widespread decreases.

“The rental market has been experiencing strong growth in recent years and that is manifesting itself in the form of rental prices. According to recent studies by, 60% of the landlords that rented out a home last year did not have to reduce the asking price in order to let the property and 90% found a tenant within six months”, explained the Head of Research at fotocasa, Beatriz Toribio.

In fact, the increase recorded during Q1 2016 is the highest in the history of fotocasa’s Real Estate Index, which began in Q1 2007, when rental prices rose by 4.9%. Since then, rental prices have decreased every quarter, with just a few exceptions, in 2011 and 2014. Quarterly rental prices started their recovery in 2015, with increases of 2.8% and 1.5% in the first and second quarter, respectively.

Increases in 11 autonomous regions

During the first quarter of the year, rental prices increased in 11 autonomous regions on a quarterly basis and in all regions on an annual basis. In fact, the YoY variation in Q1 2016 was 4%, the second highest increase in the history of fotocasa’s Real Estate Index, which dates back to 2006. (…).

Since reaching the maximum price in May 2007 (€10.12/m2/month), rental prices have recorded a cumulated decrease of 28.5%. In this sense, five autonomous regions recorded decreases of more than 30% since their peaks five years ago. Thus, Aragón is the autonomous region that has seen the sharpest decreases in rental prices (-40%), followed by Castilla-La Mancha (-35.6%), Cantabria (-35.3%) and Valencia (-31.9%).

Until March, rental prices increased in 11 autonomous regions, with rises ranging from 6% in the Balearic Islands to 0.8% in Andalucía. At the other extreme, rental prices decreased in six autonomous regions during Q1. The reductions ranged from 3% in La Rioja to 0.1% in the Canary Islands.

In terms of rental price rankings, for the first time in recent years, Cataluña displaced País Vasco as the most expensive autonomous region in which to rent a home. Specifically, the price in Cataluña amounted to €10.19/m2/month in March, followed by País Vasco (€10.18/m2/month) and Madrid (€10.08/m2/month). At the other end of the scale, Extremadura (€4.46/m2/month) and Castilla-La Mancha (€4.66/m2/month) were the two regions where residential rental prices are most affordable.

In terms of the evolution of prices by province, 32 provinces recorded rental price increases with respect to December, with the price rises ranging from 9.2% in Huelva to 0.1% in Las Palmas. By contrast, rental prices fell in 17 provinces, with decreases ranging from -0.2% in Córdona to -3.4% in Teruel. Meanwhile, prices remained stable in Lleida. (…).

Original story: El Economista

Translation: Carmel Drake

Idealista: Rental Prices Rose By 4.3% In Q1 2016

12 April 2016 – Idealista

The price of rental housing increased by 4.3% during the first quarter of 2016, taking the price per m2 to €7.40/m2/month, according to a report published by Idealista. In YoY terms, the increase amounted to 5.2%.

For Fernando Encinar, Head of Research at Idealista, “on the basis of the data in the report, it is clear that there is a huge demand for rental housing and that the supply is rising strongly. Unlike in the market for house sales, monthly rental prices are increasing in a general and uniform way across the whole country, which means that the segment is growing in a robust and stable way”.

“Moreover, at Idealista we have found that in certain markets, primarily, major capitals, the pressure of demand is so great that adverts are appearing on our database for just a few hours…(…)”.

By autonomous region

All of the autonomous regions recorded higher rental prices than three months ago, with the exception of Euskadi (where they decreased by 4%). The greatest increase was recorded in the Balearic Islands, where prices rose by 11.2%. That was followed by increases in Madrid (5.2%), Valencia (5%) and Cataluña (4.7%). By contrast, the smallest increases were observed in Extremadura (0.3%), Cantabria (1%), Canarias (1%) and Castilla La Mancha (1.2%).

Madrid (at €11.5/m2/month) is still the most expensive autonomous region. It is followed by Cataluña (€11/m2/month), the Balearic Islands (€10/m2/month) and Euskadi (€9.6/m2/month). At the other end of the table, the most affordable autonomous regions are: Extremadura (€4.1/m2/month), Castilla La Mancha (€4.4/m2/month) and La Rioja (€4.9/m2/month).

By province

Rental prices also increased in 38 provinces over the winter. The highest increase was recorded in the Balearic Islands, where prices rose by 11.2%. Significant price increases were also recorded in Valencia (6.7%), Pontevedra (5.9%), Huelva (5.5%) and Madrid (5.2%). Meanwhile, the largest decreases were registered in Tarragona (-8.6%), followed by Vizcaya (-6.1%) and Cáceres (-1.8%).

The ranking of the most expensive provinces is led by Barcelona (€12.6/m2/month), Madrid (€11.5/m2/month) and Guipúzcoa (€10.2/m2/month). Jaén is the most affordable province for renting a home, at €3.7/m2/month. It is followed by Cáceres and Ávila (€3.8/m2/month in both cases).

By capital city

Valencia is the capital city where rental prices rose by the most in Q1, with growth of 8.8%. Significant rental price increases were also recorded in Santa Cruz de Tenerife (7.5%) and Palma de Mallorca (6.5%). At the other end of the spectrum is Bilbao, where owners are now asking 5.8% less to lease their homes than they were 3 months ago. That was followed by decreases in Ávila (-3%), Tarragona and Jaén (-2.8% in both cases).

Barcelona strengthened its position as the most expensive capital (€15.2/m2/month), followed by Madrid (€12.9/m2/month) and San Sebastián (€11.7/m2/month). Meanwhile, the most affordable capitals were Lugo and Ourense, with prices of €4/m2/month and €4.3/m2/month, respectively.

Original story: Idealista

Translation: Carmel Drake

Slim Submits His Takeover Bid For Realia With A €257M Aval

29 February 2016 – Expansión

On Friday, the businessman Carlos Slim took another step forward in the process to acquire Realia through his holding company Inversora Carso, by requesting authorisation from Spain’s National Securities Market Commission (CNMV) to launch a takeover bid for 100% of the company.

Slim, who currently owns a 30.3% stake in Realia, announced his commitment to submit a bank guarantee within the next seven days, issued by CaixaBank for €257 million, to cover all of the payment obligations that may result from the offer.

The Mexican magnate announced his intention to launch a takeover of Realia at the end of January, at a price of €0.80 per share, which values the company at €369 million. Slim plans to clean up its debt and turn it into a company with “a stable level of recurring revenues, in line with its level of indebtedness”. FCC – the largest shareholder of Realia, with a 36.9% stake – is not expected participate in the takeover bid.

With respect to the shareholder loan acquired from Sareb in 2015, Inversora Carso said that, in the event that the option to capitalise the convertible tranche of that loan was exercised, then a maximum number of 14,077,669 new shares could be subscribed, whereby increasing the company’s stake in Realia’s share capital by up to 2.96%.

A return to profits

Realia, which published its accounts on Friday, managed to reverse its losses in 2015 to generate profits of €17.2 million, compared with a loss of €77.5 million the previous year, thanks to the revaluation of its asset portfolio and a decrease in financial expenses resulting from a reduction in its debt balance.

The real estate company generated total revenues of €94.93 million in 2015, down by 17.7%, due to a decrease in the sale of properties and land, meanwhile the property business remained stable.

According to the financial plan, Realia reduced its gross financial bank debt by €457 million in 2015, to €1,254million, i.e. by 26.7% compared with the previous year.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

S&P Increases Spain’s Rating To BBB+ With “Stable” Outlook

5 October 2015 – Expansión

On Friday, the credit rating agency Standard & Poor’s (S&P), one of the world’s three main players in this sector, together with Fitch and Moody’s, announced an increase in its rating for Spain’s long term sovereign debt from BBB to BBB+, with a “stable” outlook. In this way, the agency rewarded Spain for the impact that the structural reforms approved in recent years have had on the economy.

In a statement, S&P said that “the increase in the rating reflects our view of the behaviour of the Spanish economy over the last four years – we consider that it has been strong and balanced, and that it is gradually benefitting the public finances”. The agency has been particularly encouraged by the two employment law reforms that have been approved since 2010 (under the governments of Zapatero and Rajoy), which have, in its opinion, improved the competitiveness of Spain’s exports and its service sector.

“The rating from S&P is a sign of confidence in the future of the Spanish economy and an acknowledgement that the political uncertainties do not carry significant weight”, said the Minister for the Economy, Luis de Guindos, yesterday, after S&P made its statement. In reality, the agency is not quite so optimistic – it says that there is still “considerable uncertainty” over whether the next government to emerge, following the elections on 20 December, will continue or even increase the pace of reforms that are still required to improve the economy and fulfil the growth and deficit targets in the medium term. “It is unclear just what a potential change in government would mean for the Spanish economy’s primary weakness, its unemployment rate”, it said.

S&P does not see much danger in the secessionist challenge and believes that Cataluña will continue to form part of Spain; furthermore, it expects that the tension between the central Government and the regional authorities will gradually dilute. However, it warns that a hypothetical independence would hit the Spanish economy hard, including its GDP per capita, its foreign trade balance and the public finances.

Risks still remain

Nevertheless, there are also some purely macroeconomic factors that could divert the country from its positive path…”We would consider reducing the rating if economic growth does not reach our projections; if the monetary policy does not manage to stop the deflationary pressures from eroding the fiscal performance and growth in Spain; and if, contrary to our expectations, net debt exceeds 100% of GDP”. The agency expects this ratio to decrease as the economy improves, and forecasts that it will peak at 98.4% this year and drop to 98% in 2016.

Similarly, the agency says that it is important to remember that certain exogenous factors have favoured the (recent) economic recovery, such as for example, the price of oil and the euro exchange rate.

For the time being, Standard & Poor’s expects nominal GDP to grow by around 4% over the next three years. Last Wednesday, the agency improved its growth forecast for Spain in 2015 by 2 p.p., from 3% to 3.2%, and by 1 p.p. in 2016, to 2.7%. Its estimation for 2017 is 2.4%. (…).

Original story: Expansión (by Yago González)

Translation: Carmel Drake

Tinsa: House Prices Fell By 0.8% In Q3 2015

1 October 2015 – Expansión

Since their peak at the height of the real estate boom in 2007, average house prices have recorded a cumulative decline of 41.2%.

The statistics from the appraisal company Tinsa for the third quarter of 2015, published today in its IMIE Local Markets report, reveal that the downwards trend in average house prices in Spain is coming to an end, evidenced by the fact that average prices recorded a YoY decrease of 0.8% during Q3 2015, compared with a decrease of 2.9% in Q2 2015.

According to this study, since the peaks of 2007, average house prices have recorded a cumulative decrease of 41.2%.

The statistics, which are based on Tinsa’s appraisals of finished homes (new and second hand) performed all over the country, reveal a range of variations, since even in the areas that were first to anticipate the changing trend, such as the cities of Madrid and Barcelona, differences are now being seen in the evolution of prices.

Specifically, average prices in the Catalan capital rose by 7.4% in Q3 2015 with respect to the same period a year before, whereas in the city of Madrid, prices remained stable, increasing by just 0.2% YoY.

Variations by regions

Moreover, the markets showing the first signs of recovery are coexisting alongside others that have been slower to adjust and where the downwards trend will continue for a while. The latter are weighed down by a significant over-supply (of homes) and depend heavily on very local demand, where the recovery in the employment market still needs to be established.

In the third quarter of the year, the islands joined the select group of regions with positive YoY growth; during the second quarter, only Cataluña and Madrid recorded price increases. However, in the third quarter, average house prices also increased in the Canary Islands (by 2.3% YoY) and the Balearic Islands (by 0.9%). In Cataluña, prices increased by 1.4% and in Madrid by 0.7%.

At the other end of the spectrum, prices continued to decrease in Murcia (-5.1%), País Vasco (-5.6%), Extremadura (-6%) and Galicia (-6.4%), which recorded the largest YoY reductions out of all of Spain’s provinces.

Nevertheless, Castilla-La Mancha is still the autonomous region that has recorded the greatest cumulative decrease in house prices since the peaks of 2007, with a -52.1% average reduction, followed by Cataluña (-49.6%) and Aragón (-49.3%).

Original story: Expansión

Translation: Carmel Drake

Rental Prices Fall Again In January By 0.6%

16 February 2015 – Cinco Días

Navarra, Murcia and La Rioja recorded the most significant decreases.

Rental prices decreased again in January by 0.6%, i.e. by a tenth of a point less than in the previous month, representing almost half of the general index (-1.3%) and almost two consecutive years of cumulative decline, according to data published today by the National Institute of Statistics (el Instituto Nacional de Estadística or INE).

By autonomous region, the main decreases were recorded in Navarra (-1.9%), Murcia (-1.8%), La Rioja (-1.8%), Valencia (-1.4%), Madrid (-1.4%), Pais Vasco (-1%), Andalucía (-0.8%) and Castilla-La Mancha (-0.8%). Reductions were also observed in the Canary Islands (-0.3%), Cantabria (-0.3%), Aragon (-0.3%), Asturias (-0.2%), Extremadura (-0.3%), Galicia (-0.3%), Ceuta (-0.3%) and Castilla y León (-0.2%), although these were below the average recorded. Rental prices remained stable in the Balearic Islands and increased only in Melilla (+0.9%) and Cataluña (+0.1%).

On the other hand, house maintenance costs increased by 0.7% year-on-year, i.e. by two percentage points more than the overall rate and were virtually unchanged with respect to the end of 2014.

Original story: Cinco Días

Translation: Carmel Drake