Tag: transactions

INE: Q1 2015 – House Sales Up By 9.4%, Prices Up By 1.5%

9 June 2015 – Bloomberg Business

Spanish house prices are failing to keep up with the surge in transactions, as a lingering glut of empty homes takes it toll on the market.

Values rose by 1.5%  during the first quarter from a year earlier, however purchases increased by 9.4%, according to data published today by the National Statistics Institute (INE). Prices fell by 0.6% during the period compared with the last quarter of 2014.

“Challenging supply-demand fundamentals in the sector are likely to weigh down on the pace of recovery in house prices for the remainder of 2015 and 2016,” said Raj Badiani, an economist at IHS Global Insight in London. “The slower rate of increase in house prices during the first quarter of 2015 was disappointing.”

Spanish house prices fell about 40% from peak to trough following the property industry’s implosion in 2007. Though the economy is set grow by 3.1% this year and 2.5% in 2016, an excess of empty homes and lack of first-time buyers will continue to weigh down price growth going forward, Badiani said.

Spain’s housing market faces long-term challenges as the number of people between 25 and 35 years old, a typical source of first-time home buyers, will decline by 35% over the next decade, according to the Statistics Institute. The country has an estimated one million empty homes and also has the second-highest unemployment rate in the euro area at 23%.

“Demand for housing continues to battle against some harsh fundamentals, characterised by households still wary of poor labour market conditions, implying the glut of unsold new properties will continue to linger,” Badiani said.

Original story: Bloomberg Business (by Sharon Smyth)

Edited by: Carmel Drake

Funds And Developers Compete To Buy Land In North Madrid

9 June 2015 – El Confidencial

Land is no longer the most toxic asset in the market, rather it has become one of the most sought after by investors. Although, not all plots or all locations are of interest, it is clear that the number of transactions, especially in Madrid, has reached “cruising speed” during the last few months. But, what are investment funds and property developers looking for exactly?

“Land has to be ready to build on (‘suelo finalista’); it is imperative that we can begin to build on it within a period of six months”, says Roberto Roca, Investment Director, Head of Spain at Orion Capital Managers, a fund that has closed two of the largest shopping centre transactions centres in Spain in the last year: the sale of Puerto Venecia (Zaragoza), the largest shopping centre in Europe, for €451 million and the sale of Plenilunio (Madrid), for a record figure of €375 million.

(…)

The market for land in Madrid is in full swing, to the extent that some experts agree that there is “overheating” in certain specific areas.

“Most activity is concentrated within the M-30 and on buildable land. Also, outside of the M-30, to the North of Madrid, from the A-6 to the A-1, i.e. the area comprising the urban developments of Arroyo del Fresno, Sanchinarro, Montecarmelo and Las Tablas”, says Ernesto Tarazona, Director of Residential Property and Land at Knight Frank.

However, in the South of Madrid, “despite the decreases, prices have not dropped enough…to reflect the real demand in the area”, concludes Tarazona.

(…)

One of the most active players in the market is Neinor Homes – the result of Lone Star’s purchase of the real estate arm of Kutxabank – which has €1,000 million to spend on land in Spain, and which regards Madrid as one of its main targets. The company led by Juan Velayos has just bought four plots in Alcobendas and another one in San Sebastián de los Reyes – both towns to the North of Madrid – for almost €65 million. This has been the largest land transaction so far in 2015, both in terms of square metres acquired, as well as surface area purchased. The plots are completely established and ready for construction, with a total surface area of 70,000 m2 and a buildable area for the construction of almost 600 (unsubsidised) homes. The vendor was a private group, i.e. the land did not used to belong to the Public Administration.

This transaction comes after the recent purchase of three other plots of land, one in Madrid and two in País Vasco for €22 million. According to a statement from BNP Paribas Real Estate, which advised on the deal, the first plot – with a buildable area of 6,400 m2 – is in the Legazpi neighbourhood and has been granted a special plan, approved by Madrid’s Local Council, to build a 20-storey tower block. The other two plots are located in Gexto and Urduliz.

Meanwhile, the cooperative manager Ibosa is finalising an agreement with an investment fund, which will allow it to pay €70 million to buy 40,000 m2 of land from the Valdebebas Compensation Board, which will allow the construction of 1,000 homes (of which 100 will be social housing).

Nevertheless, the largest land-related deal in Madrid is undoubtedly the possible future auction – maybe after the summer – of the Ministry of Finance’s plot of land on Calle Padre Damián, which already has 4,000 individuals calling at its door.

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

Notaries: House Sales Decreased By 10.9% In January 2015

17 March 2015 – El Mundo

House sales decreased by 10.9% in January 2015 with respect to January 2014 and prices fell by 6%.

On the up side, the volume of new mortgages increased by 11.4%.

The real estate statistics published by the General Council of Notaries relating to the month of January 2015, have somewhat dampened the euphoria that the housing market has been enjoying in recent weeks. The notaries report a 10% decrease in sales and a 6% year-on-year reduction in prices. Nevertheless, on the up side, the notaries indicate that during the first month of the year, mortgage lending increased by 11.4%.

According to these house purchase figures, there were 21,320 transactions in January, which represented a year-on-year decrease of 10.9%. “Despite this decrease in the monthly figures, the data actually reflects a stabilisation in terms of sales. This decrease may be explained by the end of the ‘base affect’ due to the normalisation of the figures following the conclusion of the period for tax deductions on purchases”, explain the notaries.

By type of property, the sale of flats experienced a year-on-year decrease of 11.5%, similar to the decline observed for unsubsidised flats (-11.4%). This decrease in the volume of transactions was due, primarily, to the significant decline in the sale of new flats (-31.8%). Meanwhile, the sale of second-hand flats shrank by 7.6% year-on-year. Regarding the sale of detached homes (viviendas unifamiliares), the number of transactions decreased by 8.4%.

Price decreases

In terms of average prices, the cost per square metre of homes purchased in January was €1,234, which represented a year-on-year decrease of 6%. This reduction in the price per square metre of homes was driven by both a reduction in the price per square metre of flats (-5.6% year-on-year), as well as a decrease in the price per square metre of detached homes (viviendas unifamiliares) (-6.4%).

In the flat segment, the price per square metre of second-hand properties amounted to €1,347 (-3.2% year-on-year) and of new homes amounted to €1,624 (-12.5% year-on-year). In terms of detached homes (viviendas unifamiliares), the average cost per square metre amounted to €1,001, i.e. 5.4% lower than in January 2014.

Mortgage lending is on the increase

Meanwhile, the number of mortgage loans granted to purchase homes increased by 11.4% year-on-year, and the average amount of capital loaned amounted to €126,989 (up by +9.2% year-on-year). In this sense, the percentage of home purchases financed using a mortgage amounted to 41.5%. Moreover, for this type of purchase, with financing, the mortgage amount represented an average of 76.2% of the appraisal value of the house financed.

Original story: El Mundo

Translation: Carmel Drake

CBRE To Invest €600M In The Spanish Market In 2015

16 March 2015 – Expansión

Real estate assets / The former subsidiary of ING is looking to improve its portfolio through refurbishments and asset purchases.

After more than two decades in the market, the fund manager CBRE Global Investors has become a major player in the Spanish real estate sector thanks to its intense asset rotation policy.

The company, which manages property in this market (primarily shopping centres) worth €2,000 million, closed the sale of various assets last year: Urbil, in Guipúzcoa, which it sold to Axa Reim for €60 million; Alcalá Magna, in Madrid, which it sold to Incus Capital for €85 million; Gran Vía de Vigo, which it sold to the US fund Oaktree for €100 million and Modoo, in Asturias, which it sold for €45 million.

In 2013, CBRE Global Investors was involved in the first major sale of a shopping centre following the outbreak of the crisis, when it sold Parque Principado in Asturias for €141.5 million to the British real estate company Intu Properties. “Between 2008 and 2014, we rotated the portfolio we had created during the previous two decades. Thus, we sold Parque Principado, which was a mature asset, but we purchased other assets. In total, we bought and sold assets worth €1,000 million last year”, explains José Antonio Martin-Borregón, CEO at CBRE Global Investors in Spain and Portugal.

The (property) management company made its first investments in Spain between 1992 and 1993 and three years later, it opened its first offices. Through its five funds, it currently manages 19 shopping centres, including Bilbondo in Bilbao; Vallereal in Maliaño (Cantabria) and Parc Central, in Tarragona. “We started out as the investment vehicle for National Nederlanden, which wanted to invest in properties outside of Holland that were not for its own use. We have maintained this philosophy for 20 years. Our traditional clients are institutional investors”. The latest addition to the portfolio was La Zenia in Alicante, which was acquired using money from the Alaska pension fund.

Advantages

The goal of the Head of CBRE Global Investors is to repeat the transaction volume (recorded last year) during 2015 but with a greater focus on purchases. “We would like to close transactions amounting to €1,000 million this year with a 60:40 split in terms of purchases and sales”, he says. “We have a portfolio of mature assets and therefore we are interested in buying properties that we can add value to”.

In total, the (property) manager expects to invest €930 million in Spain and Portugal. “Demand exceeds supply, which means that prices have increased and new rules are in play. It is not going to be as easy (as it once was) to target successful investments”.

Nevertheless, the Head of CBRE GI does not fear competition from the multitude of investors and institutional funds that have arrived in the Spanish market attracted by the decrease in real estate prices and the expected economic recovery. “As a (property) manager, we try to maximise the opportunities that the market offers, leveraging on our competitive advantage, which is our local knowledge”, says Martín-Borregón. “As a (property) manager, we have more access to capital, which allows us to move (more) quickly to close transactions”, he adds.

The (property) manager is also considering investments in premises (shops/stores) on the street and in strengthening its logistics platforms (it already owns 15). “We will buy logistics assets in new areas and we will sell old warehouses”, he explains.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Ministry Of Development: House Sales Grew In Every Province In 2014

13 March 2015 – Expansión

More homes were sold in 2014 than in 2013. That is a fact. The question is: how much did the market grow by? The official statistics do not tally (with each other). The Institute for National Statistics (INE) recorded an increase of 2.2% (in 2014), based on data from the property registers. Yesterday, the Ministry of Development revealed an increase of no less than 21.6%, based on data from notaries, which represents the greatest increase since it began publishing these statistics (in 2004), with a total of 365,594 transactions.

This is also the highest figure since 2010, although, of course, it is still a long way from the peak years of the real estate bubble (2007, when 837,483 transactions were recorded). One of the explanations for the disparity in the Government’s statistics stems from the fact that not all transactions recorded in the public registers are included (in the data). Moreover, there is typically a time lag, of a few months, between notarial information and data in the property registers.

In any case, the trend, which is really the important indicator in the real estate market, is becoming bullish once more. Not surprisingly, according to the data from the Ministry of Development, sales of residential properties increased by 2014 in every autonomous region, something that was unheard of in the years of the crisis.

Sales increased by the most in Madrid (44.7%), followed by Navarra (31.3%), Aragón (31.1%), Asturias (30.8%), País Vasco (29.3%) and the Balearic Islands (29.2%).

But the improvement in the market did not stop there. An annual increase was recorded in every single province in 2014. The largest rises were recorded in Ceuta (57.6%), Burgos (46.8%), Salamanca (39.2%), Zaragoza (38.2%), Guadalajara (37.9%), Vizcaya (34.3%), Melilla (34.1%) y Guipúzcoa (33.0%).

Foreigner buyers

House sales to foreigners resident in Spain also experienced a year-on-year increase in the last quarter of 2014, for the fourteenth consecutive quarter, specifically, by 19.7%, with respect to the fourth quarter of 2013, a total of 16,336 sales. Similarly, purchases by non-resident foreigners increased to 1,315 during the quarter, an increase of 13.4% on the previous year.

Overall, sales to foreigners (both resident and non-resident) accounted for 15.8% of all sales. By province, the greatest increases in the number of purchases by foreign residents were recorded in Alicante (3,852), Málaga (2,226), Barcelona (1,536), Madrid (1,285) and Baleares (1,126).

Finally, it is worth noting the healthy level of activity in the housing market in the fourth quarter of 2014, when 111,921 homes were sold in Spain. Not since 2010 have more transactions been recorded during the fourth quarter (150,494). This figure represents a year-on-year increase of 19.5%.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

INE: House Sales Accelerate Overall And Fall In 4 Regions Only

9 March 2015 – Cinco Días

The recovery in house sales is strengthening slowly, month after month, according to the statistics prepared by the National Institute for Statistics (INE) – refer to article published on Friday for high level data. (….).

(….). The sale of second-hand homes accounted for 73.1% of all sales recorded in January, whilst the sale of new homes accounted for 26.9% of transactions, heavily influenced by the scarce construction of developments that still afflicts the market. During the first month of the year, just 9,003 new homes were sold, 37.1% fewer than 12 months earlier.

Unsubsidised housing

As INE highlights in its notes, the data released on Friday relates to sales recorded in property registries for transactions closed in the months leading up to the month of January. In any case, even through there is a certain timelag, the statistics prepared by the notaries and the Ministry of Development (using the figures of the former), which lack this mismatch in terms of dates, show exactly the same trend towards a clear increase in the volume of sales. The recovery of employment and the re-opening of the funding tap, together with significantly lower prices, explain the increased volume of transactions.

By type of home, the majority of the homes sold during the first month of the year, specifically 88.8%, were unsubsidised. The sale of this type of home increased by 10.4% in year-on-year terms, to amount to 29,667 transactions. By contrast, 3,749 subsidised (VPO) homes were sold during the month, an increase of 3.3% with respect to January 2014. Another way of assessing whether this recovery is sustainable or not is to look at how this trend is evolving across the country. Although at first, only a minority of autonomous regions recorded positive annual rates in terms of house sales (those with a higher income per capita and with a higher percentage of tourist homes), now the situation has turned around (with only a minority of autonomous regions recording negative annual rates). In absolute terms, Andalucía continued to lead the ranking in terms of house sales in January, with 6,114 transactions, followed by Madrid (5,282), Cataluña (5,219) and Valencia (4,630).

Nevertheless, in relative terms, the regions that saw the highest increases in house sales were the Canary Islands (+56.7%), La Rioja (+48.3%) and Extremadura (+30%). Only four regions recorded annual decreases: Cantabria (-17.3%), Navarra (-17.2%), Galicia (-7.3%) and Castilla-La Mancha (-3.9%)

Original story: Cinco Días (by Raquel Díaz Guijarro)

Translation: Carmel Drake

Office Rents In Barcelona To Grow By 30% In Three Years

18 February 2015 – Misoficinas.es

Barcelona is one of the cities with the greatest potential for real estate growth in Europe. At least, it is according to the 2015 Trend report, prepared by CBRE.

The international consultancy firm’s 2015 Trend Report says that the office segment is the main driver of Barcelona’s (real estate) market, and it estimates that rents will grow by between 25% and 30% between now and 2018.

Significant investment was made in offices in Barcelona in 2014, amounting to €844 million in total, i.e. 139% more than in 2013. In total, 19 transactions were closed (an increase of 31%) and more than 340,000 m2 of properties changed hands (112% more than in the previous year). This data clearly shows that investors’ appetite for this type of asset has returned to its pre-crisis levels.

In terms of occupancy rates, tenants leased 258,000 m2 of office space in 2014, the highest figure since the start of the crisis, and very close to the annual average for the past 10 years, with new business areas (Plaza Europa, 22@) accounting for 45% of the total, recovering their domination over the city centre.

An important factor to take into account is the progressive decrease in stock in the city centre, which resulted in 90,000 m2 less (available) office space in 2014. The main reason for this change was the conversion of offices into hotels, such as in the cases of Torre Agbar and the former headquarters of Cuatrecasas, as well as demand by tenants for higher quality, efficient spaces.

The report includes a Real Estate Barometer, which has been calculated for more than 10 years, based on a survey conducted with almost 200 industry executives. According to the majority of these executives, the most interesting development is that the role of vulture funds in Spain will decrease in 2015 with respect to last year. In fact, 64% confirm that this year will be dominated by ‘core’ funds and investors, i.e. those that invest on a long-term basis and are looking for greater security.

In terms of investment, the main players in the sector consider that the office and retail outlet segments will account for the majority of investment in Spain, whereby continuing the trend observed in previous years.

Original story: Misoficina.es

Translation: Carmel Drake

Student Halls In Spain: A Wise Alternative Investment?

17 February 2015 – Idealista

When we talk about real estate investment in Spain, we tend to mean the purchase of offices, hotels and shopping centres. Nevertheless, there is another type of property that may also generate high returns: student halls of residences. However, unlike in other European countries, this accommodation does not totally convince investors looking for assets in Spain. The lack of companies that know how to optimise them, and the shortage of the ideal product are some of the reasons why no transactions are being closed in this segment, despite considerable interest.

Spain had around 1.41 million students enrolled in universities during the academic year 2013-2014, according to the Ministry for Education, Culture and Sport. That is, a little over 3% of the Spanish population were university students. This percentage places Spain ahead of other countries such as Germany and France. The majority of these students (77%) studied courses in their home province, but 20% moved to another province to study and around 3% were from overseas.

Delving more deeply into their lifestyle: approximately 64% of university students live at home with their parents or other family members. At the other extreme, those who live away from home only have two options: rent (either in a shared house or on their own) or live in halls of residence. Specifically, only 2.8% choose to stay there.

In the opinion of the experts consulted, these figures are justified by the “very low” availability of public university halls. “Although there are significant cultural differences, certain aspects indicate that the market for university halls of residence in Spain will have to converge with that of the rest of Europe”, says a report published by JLL.

The consultancy firm is convinced by its analysis that the implementation of the Bologna education reforms will promote cross-border studying between European universities, “which tend to have much high percentages of students living in halls”. In Spain, it is normal for students to opt for this type of accommodation during the first and second years only.

“The flow of students travelling to study in other countries will increase over the coming years and not only in relation to Erasmus placements”, says Patricio Palomar, Director of Office Advisory and Alternative Investment at CBRE. In his opinion, issues such as the language (Spanish), the lifestyle and the affordable prices in comparison with neighbouring countries, are just a few of the attractions that draw many foreign students to choose Spain as their destination.

The main drawbacks

Unnim, the entity created from the merger of Cajas de Manlleu, Sabadell and Terrassa, is active in this market. The bank, which was acquired by BBVA in 2011, inherited this line of business from Caixa Terrassa. The former caja constructed its first hall of residence on the Avenida Parallel, 101, in the Poble Sec neighbourhood of Barcelona back in 2007.

According to the latest data available for Unnim, this business line generated a return of 7%. Sources in the sector explain that the net return on these types of assets can reach 10%, well above the rates offered by offices, hotels and shopping centres. In countries such as the UK and USA, this business generates returns of between 11% and 15%.

Juan Manuel Ortega, Director of Investment Offices at JLL, recognises that British firms are over-valuing these types of assets in Spain. These investors are looking for halls of residences that are larger than 5,000 m2 and that have between 60 and 150 rooms. Palomar also acknowledges this trend “the same funds that operate in the UK for example are looking (for opportunities) in Spain. The problem is that the same product is not available in other countries”.

Palomar maintains that student halls in Spain are obsolete and that many of them are stuck in the 1960s. That does not happen in cities such as Amsterdam where student accommodation is modern, hotel-like and less than 10 years old.

Another one of the pitfalls that affects this business is the ownership of these spaces. Most belong to the public universities, many of which have serious financial problems and cannot afford to finance the investment needed to optimise the assets. At the same time, they cannot sell the land and allow private companies to enter the sector.

This has a very direct effect on competition; it is low, which does not lead to an improvement in the facilities either. Similarly, experts recognise that the administration of these complexes is not simple, they require professional management.

Nevertheless, Palomar states that new student halls of residence are appearing in the outskirts of cities and near private business schools. “I think Spain should focus on other kinds of tourism, beyond the holiday market; educational and health tourism (have significant potential)”.

A trickle of transactions

The lethargy in this market is such that transactions are very scarce. The last known deal involved the purchase of the Galdós halls of residence in Madrid in 2012. The British firm, Knightsbridge Student Housing paid €20 million for the property, it was the first acquisition made by the company outside of the UK. Knightsbridge Student Housing was created in 2010 with the backing of Oaktree Capital Management.

Another of the most talked about transactions involved Lazora (Concha Osácar) when it acquired the Resa Group in 2011. Resa was created in 1994 and currently manages more than 8,000 beds in 32 halls of residence. The construction company Acciona also has give halls of residence (in Albacete, Cádiz, Castellón, Lleida and Murcia), which it has tried to sell in the past.

Further proof that this branch of real estate activity in Spain is still light years away from what is happening in other countries, is that Socimis dedicated to student accommodation already exist overseas. In 2013, GCP Student Living constituted the first REIT (Real Estate Investment Trust) in the UK.

Original story: Idealista (by Estefania Fonseca)

Housing: 319,389 Homes Were Sold In 2014, Up By 2.2%

11 February 2015 – Expansión

After three years in decline, INE confirms that the residential sector is on the road to recovery. The greater increases in the number of transactions were recorded in the Balearic Islands (18.5%), Navarra (13.9%) and the Canary Islands (12%).

The National Institute of Statistics (el Instituto Nacional de Estadística or INE) confirmed yesterday that house sales have turned the corner around Cape Horn. The crisis is not behind us yet, by any means, but the sector has begun its long road to recovery, and that is the best news to come out of the property sector in over six years. Residential property transactions increased by 2.2% in 2014.

Last year, 319,389 homes were sold, compared with 312,600 in 2013 and 318,534 in 2012. This represented the first annual statistical increase since 2010, although that year was clearly affected by the termination of the tax relief for first home purchases for individuals earning more than €24,107, which caused numerous families to bring forward their house purchases so as not to miss out on the tax incentive of up to €1,350 per year.

“The year-end figure reflects a rise that, although timid, is a symptom of a significant change in the pace of operations. It is an encouraging piece of data that emphasises the stabilisation of the sector and it is based on the return of financial institutions to the field of finance and on the price adjustments undergone in the market”, said Manuel Gandarias, Head of Research at pisos.com.

In reality, 2014 was the first year since 2007 in which demand grew by itself, without tax incentives or other decisive policies. The worst years of the crisis for the property sector were 2008 and 2009, when residential sales decreased by -28.8% and -25.1%, respectively. In 2010, sales increased by 6.3%. The decline then slowed down gradually in 2011 (-18.1%), 2012 (-11.5%) and 2013 (-1.9%, when tax relief ended completely).

The expected upturn in purchases in due solely and exclusively to the strong sentiment in the second hand market, the real thermometer of the residential sector at a time when new homes are still somewhat mummified, in an over-inflated stock.

Sales of used homes increased to 199,943 in 2014, i.e. 18.4% more than a year earlier. Second hand homes now account for two out of every three transactions (62.6% of the total). These sales had increased by 3.8% in 2013.

Meanwhile, sales of new homes in 2014 amounted to 119,446 (down -6.9% with respect to 2013) and now accumulate four consecutive years of decline.

“This superiority of used homes over new builds is not only based on the larger volume and leeway afforded by the prices of such homes, it is also due to the scarcity of new developments and the effect caused when the banks dumped the new developments they held on their balance sheets, which effectively converted these properties into second hand homes for tax purposes”, said Gandarias.

The number of unsubsidised homes sold increased by 3.2% with respect to 2013, whilst the number of subsidised house sales decreased by 6.2%.

By autonomous region

The autonomous communities that experienced the greatest increases in the number of house sales in 2014 were the Balearic Islands (18.5%), Navarra (13.9%) and the Canary Islands (12%). The largest decreases were recorded in La Rioja (-25.1%), Castilla-La Mancha (-12.6%) and Murcia (-6.3%).

The regions that recorded the most transactions per 100,000 inhabitants in 2014 were Valencia (1,182), the Balearic Islands (1,043) and the Canary Islands (1,015).

83.0% of the sales recorded in 2014 related to urban properties and 17% to rural properties. In the case of urban properties, 55% corresponded to homes. Sales of rural properties increased by 7.3% and sales of urban properties rose by 0.9%. Within this second group, housing was the property type that experienced the highest growth.

The experts expect the improvement in house sales to extend into 2015. The 21st Edition of the Real Estate Heart Rate Monitor (la XXI edición del Pulsímetro Inmobiliario) published by the Institute of Business Practices (el Instituto de Práctica Empresarial or IPE) last week, forecasts that sales will grow by 7.5% this year.

According to the IPE, house prices will grow by 2.5% in 2015. In addition, mortgage lending will increase by 2.5% and the construction of new builds will grow by 7.5%.

Sales have already increased. Will prices rise too? We will know on 9 March, when INE publishes data abour the average house price at the end of 2014.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

INE: House Sales Increased By 15.7% In December

10 February 2015 – Expansión

Sales of second hand homes drove overall house sales to increase by 2.2% in 2014, with respect to the previous year, to reach 319,389 transactions, resulting in a return to positive growth after three years of decline.

House sales rose by 2.2% in 2014 after three years of decline, thanks to a boost from second hand properties, according to the provisional data published today by the National Institute of Statistics (Instituto Nacional de Estadística or INE) regarding the Statistics on the Transfer of Property Rights (Estadística de Transmisiones de Derechoes de la Propiedad or ETDP).

The second hand market was the driver behind this annual growth, the first positive trend since 2010, when house sales grew by just over 6%. That year represented a respite for the real estate market, which had been hit hard by the economic downturn.

The increase in the sale of second hand homes was notable last year with a rise of 18.4%, to reach 199,943 transactions. By contrast, the number of new homes sold decreased by 16.9%, to amount to 119,446.

25,998 houses were sold in total in December, an increase of 15.7% on the same month last year – the fourth consecutive monthly increase – and 3.2% more than in November.

After three years of decline, house sales have returned to positive territory in the context of a strong price correction. In fact, since their peak in 2007, house prices in Spain have decreased by more than 40%.

During the crisis, the worst years for house sales were 2008 and 2009, when the number of transactions plummeted by 28.8% and 25.1%, respectively. Double-digit decreases were also recorded in 2011 and 2012 (-18.1% and -11.5%, respectively), however, the decline eased in 2013 to 1.9% as the tax relief for house purchases ended.

89.7% of homes sold last year were unsubsidised (free housing) and 10.3% were subsidised (protected). In total, sales of unsubsidised homes increased by 3.2% in 2014, whilst sales of subsidised homes decreased by 6.2%, a smaller decline than in previous periods.

Andalucía leads the ranking

By autonomous region, Andalucía recorded the highest number of house sales last year (64,349 transactions were closed there), followed by Cataluña (47,113), Valencia (46,678) and Madrid (44,231).

The autonomous regions that recorded the fewest number of transactions were La Rioja (2,263), Cantabria (3,917) and Navarra (4,403).

In relative terms, the number of house sales rose in eleven autonomous communities in 2014 and decreased in six. The regions that experienced the highest increases in terms of the number of transactions were the Balearic Islands (+18.5%) and Navarra (+13.9%), whilst the ones with the largest decreases were La Rioja (-25.1%) and Castilla-La Mancha (-12.6%).

Original story: Expansión (by )

Translation: Carmel Drake