Downgrade on Energy Efficiency Rating for 43% of Dwellings in Spain

5/01/2015 – Cinco Dias

A year and a half ago (June 2013), a legal requirement on carrying out an assessment of energy performance of existing buildings came into force. The goal was clear: establishing a reliable parameter for property comparison, essential at the moment of marketing a housing unit in Spain.

Undoubtedly, experts criticized this Energy Performance Certificate (EPC) regulation as according to them the mandatory evaluation would restrict to homes for sale and let and would not apply to all the buildings with no exception.

As the domestic energy assessors said, the nuance, together with short validity time and little public disclosure about the law made ‘citizens assimilate the implications of energy efficiency grades (ranging from A to G) and therefore its impact on property values is not perceivable yet’, explains Marta Garcia Hernandez, chief of Tinsa Certify.

The assessor, leading in the sector, has produced around 36.500 energy certificates during the year and a half, of which 35.000 corresponded to dwellings. The result is heartbreaking.

As much as 43.07% was classified as G, the worst grade of all, and 36.9% was given an E, third-to-worst. Only the three least efficient grades (i. e. E, F and G) represent 95% of the stock. Approaching the data from the other side, mere 1.29% of the evaluations were closed with one of the best grades (A, B or C).

Another discouraging fact is that the number of issued document makes a tiny part of the total. It is estimated that they represent an energy performance of 6% of the buildings and 2.5% of all dwellings. The subterfuge about the assessment prices should also fall under the adjustment hammer of the sector if citizens are expected to respect the requirement.

Poor classification, Greater Consumption & Higher Costs

Some autonomous communities of Spain have commenced to impose first sanctions on individuals and companies who had dodged the obligation. Fines oscillate between 1.200 and 6.000 euros.

Tinsa defends that many citizens are unconscious of the mandatory nature of the law as it has not been made public widely enough. Moreover, private owners do not know how much they could save on an energy-efficient home.

Tinsa elaborated a table specifying requirements to be met for each grade. As an example, the assessor takes an average Madrid dwelling which, if having an A-grade, should consume energy for 200 euros annually, and if it had a G-grade, the cost would soar to 2.500 euros per year.

Final grade shall have an influence on the property price, pulling it down in case of poor performance and adding to value when it is efficient.

 

Original story: Cinco Días (by Raquel Díaz Guijarro)

Translation: AURA REE

Tinsa: Home Prices Will Hit the Bottom in 2015

11/12/2014 – Expansion

According to Spanish appraisal firm Tinsa, home values could bottom out during the next year, depending on the economic development and employment. Moreover, the company portends a considerable recovery for the industry in 2015.

Tinsa’s head of the Product and Diversification department Pedro Soria said that although the outlook for growth and employment are optimistic and since 2013 housing prices have been stabilizing, new jobs give lower salaries, they are usually temporal and part-time, resulting in poor buyers’ solvency and weak demand.

After floor-level year 2013 with sales reaching barely 300.000 properties, Tinsa estimates that an improvement in expectations observed since the beginning of 2014 will be translated to an increase of between 15 per cent and 20 per cent in terms of sold homes.

Referring to the stock and its absorption, the appraiser calculates it will show 340.000 dwelling units.

Mr Soria believes the volume may be digested significantly in 2017. However, this does not mean that a certain surplus located badly and demonstrating doubtful quality will disappear as well.

Also, Tinsa predicts that in 2015 there will be a notable reactivation in housing development, above all because the ongoing year has already seen positive numbers of new building permits.

Thus, 2014 may close with 40.000 permits but 2015 will probably double that, reaching 80.000, which will allow to avoid supply deficit in 2017.

In regard to the main players in the industry next year, Tinsa’s executive reckons the principal role will belong to the Socimis (Spanish REITs), vehicles that mostly target properties other than residential but this asset class also starts to appear in their strategies.

Foreign demand will continue to monopolize coastal areas and the islands. In fact, the litoral zones registering pricing stabilization or even first rises are dominated by international investors.

 

Original story: Expasión

Translation: AURA REE

Tinsa: October Home Prices Down 4.2%

14/11/2014 – El Economista

As per the latest update by appraiser Tinsa, average house pricing in Spain weakened 4.2% in October in comparison with the same month 2013. From the 2007 peaks, the slump accumulates a 41.4% depreciation.

The October decline equals to the September figure and both confirm the stabilization trend which sprouted out in mid-2013.

Specifically, home prices have been showing an around 4% year-on-year falls over the last months, less than half of what they pictured a year earlier (down 8.5%).

According to Tinsa, general ratio reduced only by 3.4% from January to October 2014, while the same time period in 2013 resulted in an 8.4% drop-off.

Down 2.2% in Main Cities

The October pricing levels in capital and other large cities of Spain have tipped the balance 2.2% downwards on year-on-year basis. All the five areas scrutinized in the study showed positive changes over time.

Furthermore, metropolitan areas (towns surrounding big cities) suffered a 3.4% y-o-y decrease in the tenth month, and in the Mediterranean coast zones houses cheapened by 4.5%.

They did most acutely in the Balearic Islands and the Canaries regions where the year-on-year rate showed a 5% depreciation. The remaining group, called ‘the rest of the municipalities’, saw prices dipping down 7.1% over October 2013.

On the other hand, the Mediterranean coast displays the deepest slump in prices since the 2007 cap, namely 48.6%. Similarly, capital and main cities post a 44.8% decline, and the metropolitan zones 44.1%.

Below-40% scores are found only in the rest of the municipalities (down 36.5%) and the Balearic and the Canary Islands (down 32.1%).

 

Original article: El Economista

Translation: AURA REE

Tinsa: Six Main Cities See House Values Rising

5/11/2014 – Expansion

Spanish housing market is at a turning point. Prices have already gone up in six regional capitals, nine provinces and three regions, in the third quarter of 2014, appraiser Tinsa informs. On  year-on-year basis, homes depreciated 4.3%.

Precisely, a House Price Index (HPI) for local markets elaborated by the firm called ‘Tinsa IMIE Mercados Locales’, has been reflecting pricing stabilization since the second half of 2013. ‘The 9.3% adjustment registered in the third quarter of 2013 has shrunk to 4.3% year-on-year’, the report states.

In accordace with the company’s estimates, the indice has dipped down by 40.3% since its Q4 2007 peak.

Price development varied in each city, province and region. For example, in six provincial capitals values jumped up in Q3 2014 when compared to the same period of time a year earlier. Namely, house prices rose in Teruel (3.8%), Zaragoza (up 2.1%), Malaga (1.7%), Pontevedra (1.6%), Caceres (0.6%) and Barcelona (0.1%). On the other side of the ranking position Salamanca with further, 15.9% depreciation and Segovia with a 15.1% slump.

While analyzing provincial data, one may easily notice a wide pricing gap. Thus, Segovia, the Autonomous Region of Navarre and Jaen lead in the top y-o-y decline ranking with 14.1%, 13.9% and 13.5%, respectively. In others, values increased by more than 5%, most in La Coruña (up 8.4%), Huesca (5.7%) and Badajoz (5.3%).

Finally, regional scores were even more divergent. In some, like Navarre or Asturias, prices are still heading down, while in others they have already bottomed-out. The two regions show falls of 13.9% and 9.6% respectively, followed by Castille and Leon (down 9.1%), the Canary Islands (7.4%), the Valencian Community (6.8%) and Andalusia (6.2%). Year-on-year rebounds are found only in Extremadura (5.6%), Galicia (up 1.9%) and La Rioja (0.4%).

 

Original article: Expansión (by M. G. M.)

Translation: AURA REE

Banks Reduce Number of Appraisers From 12 to 3

24/09/2014 – Cinco Dias

Strong ties between financial entities and appraisal firms, many owned by banks anyway, made Spain’s Central Bank take an action few years ago. The fact, that an arm of a bank was responsible for valuation of a property for which the bank granted a loan – widely practised during the real estate boom – or that they could dictate the discount applied on a delinquent mortgage after the bubble burst has been a clear conflict of interest for years.

However, the pressure from the side of the central authority led to reduction in the banks’ appraisers number from twelve (controlling 46.8% of the market) to a shy 4.9% share.

This is how the latest Economic Bulletin by the Bank of Spain puts the matter, basing on data gathered at the end of 2013. According to them, presently, there are three appraisal companies in the hands of banks: Sociedad Integral de Valoraciones Automatizadas (Sivasa) belonging to Banco Santander, Tasaciones Andaluzas of Unicaja and LKS Tasaciones (tasación = appraisal, translator’s note), owned by Caja Laboral.

Last year, also Global Gestión de Tasaciones (Ibercaja), Compañía de Medios y Servicios de Tasación (Cajasol later absorbed by CaixaBank) were operating on the market and closed their activity at the end of 2013.

A year earlier, Bankia had sold Tasamadrid to private equity fund Advent, since 2010 the owner of Tinsa, a huge appraisal firm held by 35 savings banks. Then, CaixaBank transferred Valoraciones y Tasaciones Hipotecarias (VTH) to Gecopinsa Tasaciones, while Banco Sabadell (that had inherited CAM Tasaciones from Bienes Mediterraneo) and Novagalicia (owning Tasaciones y Valoraciones e Galicia) decided to close their appraisal affiliates.

The objective of the Bank of Spain is to ensure maximum independence to the country’s appraising firms. Minister Luis Maria Linde forbids the directors of the firms to maintain direct contact with salesmen of the banks which hold a share in their capital.

In 2013, financial entites accounted for 71% of clients of the companies. Thus, practically one third of the total gains of 42 appraisers not held by banks proceeded from their ‘significant clients’.

Speaking of conglomeration in the sector, the Bank of Spain reports that ‘37% of all appraisals and the earnings corresponded to two major firms’ and the top five controlled 57% of the total.

 

Original article: Cinco Días (by Juande Portillo)

Translation: AURA REE

Tinsa: Property Value Down 4.3% in August

10/09/2014 – Expansion

The Tinsa Local Market Index states that in the month of August, housing prices slowed down their drop-off and fell by 4.3%. However, since the 2007 peaks, the adjustment has marked -41.8%.

In fact, the decline registered in August is by 1% slighter than it was in July, following the restrictive suit initiated in 2013.

Thus, although the values continue to shrink, they do it much less harshly than they used to a year before. Tinsa adds that year-to-date, the real estate prices went down by 3.2%, compared to the 8.1% slump registered in the same period 2013.

The Balearic and the Canary Islands and the Mediterranean Coast, all saw housing prices adjusting acutely year-on-year in August, showing 8.3% and 7.1% falls respectively. Since the pre-recession caps, homes in these popular Spanish regions have cheapened by 34.5% and 48.4% accordingly.

In turn, in big cities of Spain and their metropolitan areas the values dipped down 4.4% and 2.1% year-on-year in August, whereas in the rest of the municipalities the decrease post 3.5% on the same basis.

Taking into consideration the maximum levels, regional capitals and other large cities already cumulate a 45.3% depreciation, while their surrounding areas average at 43.4%.

Tinsa informs its appraisals yet do not detect any overall rise in prices and the firm´s outlook for the upcoming months depends on the economic growth and the unemployment rate.

Thus, some micro-markets still have a way down ahead, whereas the other might be already showing signs of recovery. As a result, the appraiser portends deeper falls unless the improvement arrives firm.

National Statistics Insititute reports that the home values noted down in the second quarter of 2014 indicate a 0.8% increase year-on-year , representing the first positive development since the first quarter of 2008.

What is more, last week the Registrars Association assured of a rebound of 1.5%.

 

Original article: Expansión (after: Efe)

Translation: AURA REE

The Price Of Housing Falls By 4,4% Year On Year In July And 40,3% During The Financial Crisis

13/08/2014 – El Economista

The drop in prices is softened by the improved economic outlook

The average price of housing fell by 4,4% last July compared with the same month in 2013 and has accumulated a drop of 40,3% since the maximum reached in 2007 before the crisis began, according to the valuation firm Tinsa.

The fall in the seventh month of the year is more pronounced than that of 3% recorded at the end of June, primarily due to the one-offrise which the index experienced between June and July 2013, a trend which has not been repeated this year.

However, the July’s reduction was much more moderate than the 9,2% decline which 2013 ended on. Whether or not this trend will continue, according to Tinsa, will depend on the favourable forecasts for economic growth, financing and stabilising of jobs in Spain being proven right.

The areas of the Mediterranean coast were those that suffered the most notable fall in July compared with a year earlier (7,7%), followed by the largest cities and their metropolitan areas, which recorded inter-annual price reductions of 5,4% and 5,2%, respectively.

Prices rise in the Balearic and Canary Islands

The remaining areas not included in other categories were the other group which registered a decline in their values versus July 2013, albeit a more moderate one (-4,3%).

In contrast, the Balearic and Canary Islands made a comeback, with their positive trend translating into a year on year rise of 4,2%, consolidating the change of direction that was already noted in June.

The Mediterranean coast, for its part, was the area with the greatest cumulative reductions since reaching their maximum values, with a 49,1% decline in July. Next were the regional capitals and large cities with 44,1%, metropolitan areas with 42,8% and the remaining areas with 35,2%. The Balearic and Canary Islands are last on the list, with the lowest accumulated reduction (-27%).

Original article: El Economista
Translation: Aura REE

Adjustment in Housing Prices Slows Down to 3.9% in Q2

23/07/2014 – Expansión

Tinsa´s Local Markets Index shows that in the second quarter of 2014, housing prices fell by 3.9% on year-on-year basis. To compare, the values went down by 6.7% in the first quarter of the year and by 8.3% in the last three months of 2013.

Taking into account these figures, the property price adjustment reaches -39.6% since Q4 2007 peak and right now the values equal to those from the end of 2003.

Positive price development was registered  in Extremadura (+2.8% YOY) and Galicia (+0.1% YOY), proving to be the first since Q3 2008.

Further pricing correction is not ruled out. According to Tinsa, general tendency points at moderately negative development.

In comparison with the second quarter of 2013, the Community of Madrid´s home values dipped down most (-9.9%), followed by the falls in La Rioja (-8.2%), Castille-La Mancha (-7.8%) and the Valencian Community (-7.6%).

In turn, regions like Catalonia (-4%) or Cantabria (-4.2%) stayed very near to the national average. In Aragon, houses depreciated by 2%, in the Balearic Islands by 3.1%, while in Melilla by 3.3%.

If the analysis extended over the past seven years, Tinsa´s index shows that the sharpest slumps in property values were witnessed in Castille-La Mancha (-51.5%) and Catalonia (-50.6%) which are the only regions where they crossed 50%.

On the other hand, prices in Melilla declined by “mere” 15.3% during the recession, while the rest of the Spanish regions saw over 25% price slashes. Just over this cap we find Extremadura (-27%) and Galicia (-29,7%), while (aside from Castille-La Mancha and  Catalonia) Madrid´s Community (-47.6%), La Rioja (-47.4%), Aragon (-46.1%) and the Valencian Community (-45.6%) are closer to the opposite extreme.

 

Original article: Expansión

Translation: AURA REE

Six Indicators in Favour of Recovery of the Spanish RE Market

16/07/2014 – Expansion

Below, we list the six indicators proving rise in sales, stabilization of prices and growth in construction. Also, tendency on the market becomes more and more clear: first the demand goes up, then the price slump slows down and finally, the supply starts to increase.

However, experts call for cautiousness and remark the process will progress at a snail´s pace due to economical and labour instability still haunting the country.

Indicator 1: Pretty Optimistic Figures Published by the National Institute of Statistics (INE): Housing sales climb a 5.4% YOY in May

Purchase of homes jumped up by 5.4% in May (compared to the same month in 2013) and it was the third consecutive month of upwards inclination (in March it grew by 22% and in April by 5%) after ten months of an abrupt drop-off. The improvement should be mostly assigned to resales.

Namely, 28.124 transactions took place in May. 90% of the units were free and 10% subsidized. New homes made 38.7% of the total, whereas 61.3% corresponded to the exisiting stock.

In opinion of Beatriz Toribio leading the Research department at Fotocasa.es, the data confirms that “the market went stable and regains the pulse“.

The May year-on-year rebound was felt in all Spanish regions except for Castille-La Mancha (–15.2%), Galicia (–6.0%) and Madrid (–5.5%). The biggest jumps marked the Balearic Islands (+33.1%), Navarre (+32.9%) and Cantabria (+30.4%).

Indicator 2: The Ministry of Public Works: 48.4% More Houses Purchased in Q1

The latest information concerning sales and published by the authority shows a robust upsurge in sales (+48.4%, 81.358 transactions) in the first quarter of the year juxtaposed with Q1 2013. However, one must remember that the Q4 2012 and the Q1 2013 were exceptions due to cancellation of the property purchase relief and rise in VAT.

Indicator 3: Foreign Investors Buy by 27.2% More in Q1

The interest of foreign purchasers in the Spanish property market shot up over the past years. Specifically, they acquired by 27.2% more homes than in Q1 2013 and in total accounted for 19.4% of all sales.

When it comes to nationalities, the British led with (13.8%), followed by the French (10.5%), Russians (8.4%), Germans (7.5%) and Belgians (6.9%).

Indicator 4: The Second Major Growth in Construction in Eurozone

Another datum provided by Eurostat referes to new construction in Spain which advanced by 4.8% in April and thereby linked 6 months of uninterrupted way up. This was the second best score both in the European Union and in the euro-zone (average of 0.8% monthly).

The highest monthly increases were registered in Slovenia (+6.7%), Spain (+4.8%) and Portugal (+4.5%), while the sharpest declines were seen in Poland (-5.4%), Romania (-4.7%) and Slovakia (-2%).

In comparison to the previous year, Spain leads in the ranking with a 53.4% appreciation, then goes Slovenia (+48.8%), Hungary (+27.2%) and Poland (+13.3%). On the other side there position: Portugal (-9%), Romania (-6.8%), Slovakia (-5.1%) and Italy (-5%).

Indicator 5: Tinsa: Slump in Prices Screeches to 3% in June

Housing values continued to slow down over the month of June until stopping at 3% YOY (in May it showed 4%).

Specifically, Tinsa-designed IMIE General indicator says the correction post 39.7% since the 2007 peak and settled at 1.378 bps (August 2003 level). The agency claims the fall will halt near to zero at the end of the year.

Indicator 6: Sociedad de Tasación: Houses Cheapen by 2.3% in Q2

New and existing home prices averaged at 1.328 Euros per square meter in the second quarter of 2014, meaning a 2.3% depreciation in regard to Q2 2013. Although the values keep sliding down YOY, they do it in a much smoother manner.

Moreover, compared with the first quarter of 2014, dwellings got more expensive by 4.5%.

Beatriz Toribio, head of Research department at Fotocasa.es claims it is too soon to portend any change in tendency or the end of adjustment. For her, lending and job market improvement are the key. “Banks do not relax lending and as we have seen, the new mortgage approvals went back again in April. This happens because large majority of the buyers are foreigners or small-medium size investors with equity”. “Without financing, the property market won´t recover”, she concludes.

Manuel Gandarias says “these are good news but we should watch the future sales performace which will firmly prove the stabilization and sustainable growth”.

Original article: Expansión (by B. Amigot)

Translation: AURA REE

Tinsa: Housing Stock to Disappear in 2017

28/01/2014 – Expansion

The real estate valuation company predicts that the accumulated property stock posts the number of 400.000 units at the beginning of the year. Such real estate surplus could diminish by the second half of 2017, so long as the economical conditions (creation of work places and evolution of credit) are met.

According to Tinsa, it is expected that the new housing starts will have revived by the second half of 2015. In fact, the demand for them will be set for years 2014 and 2015 at 100.000 units annually. If it persists, the dwellings being presently in exceed could dwindle by 2017, as Íñigo Valenzuela, the general commercial director of Tinsa, points out.

Along with the company´s predictions, the stock will have shrunk by January 2016 to 300.000 units. Moreover, taking into account the property acquired as a long-term investment, the houses in exceed will decline to 195.000 properties at the beginning of 2016.

In geographical terms, a large part of the houses in exceed has been already absorbed on the Balearic and the Canary Islands, while in the consolidated hub of the big cities the stock is scarce if compared to demand.

Talking about the coast, the latest developments will performance badly on the market, however in Marbella price rebound has been observed.

Drop in Prices

According to the data from the last quarter of 2013, the sharpest drop-offs have been registered in Madrid (13,1%); Castilla la Mancha (12,3%) and Asturias (11,8%), whereas the least abrupt on the Balearic Islands (2,3%); in Navarra (3,1%) and on the Canary Islands (3,5%).

If it comes to the maximum values, the most significant adjustments have been noted down in Castilla la Mancha (50,2%) and Catalonia (49,1%).

In accordance with the tertiary use markets, Tinsa foresees that the new construction property developments will restart in medium-term, (…).

In case of offices, the rental prices begin to be attractive and they are expected to stabilize within several quarters with an increase in transactions. In the retail sector, the sales loss will carry on throughout 2014, with a stabilizing tendency, especially in rent. Perspectives are more pesimistic for the industrial and logistic market, that is deemed to poor building demand.

Source: Expansión