Pozuelo, Getxo and Boadilla, the Municipalities with the Highest Income per Capita in Spain

Madrid and Barcelona are home to the 10 neighbourhoods with the highest income per capita in Spain, whilst Pozuelo, Majadahonda, Las Rozas and Sant Cugat are the municipalities with the lowest rates of unemployment.

Eight of the ten municipalities with the highest incomes per capita in Spain are located in the Community of Madrid, according to data released today by the National Institute of Statistics (INE). According to this ranking, which reflects figures from 2017, Pozuelo de Alarcón is the municipality with more than 20,000 inhabitants that has the highest income per capita in the country. It is the only municipality whose citizens have an average income of more than €25,000, specifically, €25,903.

The top 3 ranking is completed by the Basque town of Getxo, with an average income of €20,147 euros per inhabitant, and Boadilla del Monte, also in Madrid, which has a similar income per capita figure (€20,103).

Unemployment Rose by 282,891 People in April to 3.9 Million, with 25,000 More People Out of Work in the Construction Sector

Almost 3.9 million people were unemployed at the end of April, the highest figure on record since May 2016. Moreover, 25% of those in work and registered for Social Security, 3.4 million people in total, are affected by an ERTE.

Coronavirus caused unemployment to soar in April by 282,891, or 8%. That represents the largest increase in the month of April in the entire historical series, according to data from the Ministry of Labour and the Social Economy published on Tuesday. Moreover, 25% of those in work and registered for Social Security, 3.4 million people in total, are affected by an ERTE.

In this way, almost 3.9 million people were unemployed at the end of April, the highest figure on record since May 2016, having increased by 7.97%. The unemployment data for April, like that for March, does not include those workers who have been temporarily suspended from work or whose hours have been reduced as a result of an ERTE, since the definition of ‘registered unemployed’ does not consider them to be unemployed. It should be noted that April saw the destruction of fewer jobs than March.

The Unemployment Rate Rose to 14% in March with a Notable Increase in the Construction Sector

The number of unemployed people rose by 121,000 during the first quarter, which means an increase of 3.79%, taking the total number out of work to 3,313,000.

The unemployment rate stood at 14.4% in the first quarter of the year, which is 63 hundredths more than in the previous quarter. The number of employed people decreased by 285,600 to March with respect to the previous three months, which represents a fall of 1.43% and means that the total number of employed people fell to 19,681,300, according to data from the Active Population Survey (EPA), prepared by the National Institute of Statistics (INE).

The number of unemployed people rose by 121,000 during the quarter, which means an increase of 3.79%, taking the total number out of work to 3,313,000. By sector, in the industrial sector, employment increased by 5,600 people. By contrast, it decreased in services, with 275,900 fewer people employed; in agriculture, by 9,100, and in construction, by 6,200.

Unemployment to Fall to Pre-Crisis Levels in Madrid

3 December 2019 – The Community of Madrid has had a series of years of growth above the average for Spain as a whole. According to the forecasts by BBVA Research, Madrid had the highest regional growth in 2018 and will continue to do so in 2019 ad 2020. Thus, in 2020, unemployment in Madrid is expected to fall to pre-crisis levels, which, until now, had only been done in the Balearic Islands and the Canary Islands.

BBVA Research stated that GDP in the Community of Madrid is expected to grow by 2.6% this year, a significant reduction in the pace of growth compared with last year (3.7%). The regional average for the country as a whole, however, only reached 1.9%. Next year, growth in Madrid is expected to fall to 2.2%, compared to the Spanish economy at 1.6%.

Original Story: Expansión – Pablo Cerezal

Adaptation/Translation: Richard D. K. Turner

Servihabitat: Spain’s Housing Market Continues on its Positive Trajectory

24 July 2018 – Eje Prime

The housing market in Spain is going to continue with positive figures across all areas in 2018. That is according to a report from Servihabitat, which indicates that prices are going to continue to rise this year, up by 5.4%; operations are going to soar, with a leap of 24%; and new build starts are going to rise by 16.6% (all figures compared to last year).

According to the report, these increases respond to a residential market that “is progressing with clear signs of consolidation”, which is explained by factors such as an improvement in consumer confidence, the containment of unemployment and the positive evolution of companies’ turnover.

These elements “are encouraging the start of housing projects and configuring an expansive cycle”. With a special focus on the largest populations in Spain, such as Madrid, Barcelona, Málaga, Valencia and Sevilla, in the case of homes for regular use, and on regions such as Galicia, La Rioja, the Community of Valencia and the Canary Islands, the number of new home starts will rise by 16.6% this year to 93,895 units.

Meanwhile, the number of finished homes will rise by 15.5% during the course of this year, according to Servihabitat’s forecasts, with a total of 63,744 homes delivered. Despite that, the pull of demand will reduce the new build stock by 4% to 454,939 homes, with a greater reserve in the communities of Cataluña, the Community of Valencia and Andalucía (the three account for 49% of the total stock).

The second major increase will be seen in the number of transactions, in other words, the sale of homes signed at the notaries’ offices. According to the report, the year will close with a total of 669,739 transactions subscribed, up by 24.3% compared to 2017.

Macroeconomic conditions, together with opening up of the financial sector to the granting of mortgages and demand for property investment (thanks to the returns that the rental market is offering) are the three main drivers of demand, which have reduced the average sales period for a normal home to 6.6 months.

Finally, the evolution of supply and demand will lead to a rise in house prices once again this year, up by 5.4%, compared with an increase of 6.2% with respect to the previous year.

Prices are expected to grow by the most in the Community of Madrid, with a forecast increase of 11.5%; followed by Cataluña, 9.6%; the Balearic Islands, 8%; and País Vasco, with an expected increase of 5.2%. By contrast, prices are forecast to rise by less than 1% in the autonomous regions of Extremadura and Castilla-La Mancha in 2018.

The report also reflects the opinions of the real estate agents who form part of Servihabitat’s own network of branches and its collaborating agents. In particular, 64.2% of that sample believes that the price of regular homes (primary residences) will remain stable in 2018, compared with 33.2% who think that they will rise and just 2.6% who consider that prices will fall. In the case of holiday homes, the dispersion is somewhat greater: 34% forecast that prices will rise this year; 62.6% think they will remain stable and 3.4% believe that they will fall.

Original story: Eje Prime (by C. de Angelis)

Translation: Carmel Drake

INE: House Sales Soared by 23% in January

15 March 2018 – Expansión

The real estate sector is aiming high in 2018 off the back of the economic recovery. Having surpassed the barrier of half a million homes sold in 2017 and whereby made a return to pre-crisis levels, in January, house sales soared by 23% YoY, to reach 47,289 units. It is the best data for a decade, since May 2008, according to the latest data published by INE. That, combined with the 4.5% recovery in prices in February, as estimated by Tinsa’s price index, indicates that the time is ripe for consolidation in the sector. “The consolidation of credit, the improvement in the economic context and the strong outlook for the sector and the economy, in general, explain this reactivation in demand for housing”, explains the Head of Research at Fotocasa, Beatriz Toribio. With respect to December, sales in January soared by 46.8%.

Forecasts for the real estate sector point to increases of 5% in terms of prices and 10% in terms of sales, in line with the forecast evolution of the Spanish economy. Even so, the number of operations recorded is still well below the more than 100,000 homes sold per month in the years prior to 2008, when the real estate bubble burst. Prices have also continued to recover, and whilst in the centre of some cities, they have now recouped their losses, there are still many areas of the country where house prices today are 65% lower than they were in 2007.

On the one hand, the large capitals and coastal areas are leading the increases in prices, boosted by interest from investors, the tourist boom and a shortage of stock and of new homes. In fact, the overheating of prices in many areas is leading to a displacement of demand towards less central areas of those cities.

In terms of sales, the 23% increase is backed by double-digit growth in 13 autonomous regions. Asturias, the Community of Valencia and Murcia lead the rises, with increases of 56%, 40% and 39%, respectively. Nevertheless, only Valencia remained in the top 3 in absolute terms. That community was, after Andalucía, the one where most house sales were recorded in January (7,409 units). Andalucía was the area where most homes were sold, 8,988 units, up by 31% compared to January 2017. The third region on the podium was Cataluña, which recorded 7,334 sales, although at a rate that was well below the average, of 8%. In this regard, Toribio said that although “the political situation may have slowed down activity in the Catalan real estate market, it has not paralysed it completely”.

Meanwhile, in Madrid, 6,526 homes were sold, up by 14%. Together with Cataluña, La Rioja, Aragón and Extremadura recorded the lowest increases in transaction numbers, up by 8%, 5% and 1%, respectively. The geographical differences expand further as you zoom out of the photo. By province, Álava grew by the most (56.5%) and several provinces saw their sales figures fall. Specifically, in Ciudad Real sales decreased by -19.4%, in Zamora by -10.3% and in Badajoz by -7.4%.

The composition of that growth was also uneven by segment, with a clear predominance in terms of second-hand housing. Of the total number of transactions, just 8,272 were new homes, compared to 42,745 second-hand properties, in other words, 17.5% of the assets sold were new and 82.5% were second-hand. Nevertheless, both segments are evolving in parallel, with growth of 23.5% for new homes and of 23% in the case of second-hand dwellings.

Original story: Expansión (by I. Benedito)

Translation: Carmel Drake

Deloitte: Residential Property Developers Set Their Sights on Consolidation

1 March 2018 – Expansión

The residential sector is on a roll. After years of significant declines in property development activity in Spain, the housing industry recorded its best year since the crisis in 2017, with a total of 500,000 transactions, of which almost 85,000 involved new homes, although the evolution of house sales is still light years away from the levels seen in 2007.

In this context, prices also recovered, recording an increase of 6.6% between 2014 and the third quarter of 2017, albeit with significant differences by province. This recovery in prices came after a cumulative decrease of 27.3% between 2008 and 2014, according to data reflected by Deloitte in its report The Residential Development Handbook. According to that analysis, there are currently 2,150 developments underway, with 114,000 homes being built. Of the total new developments, almost 80% are located in just 10 provinces.

This recovery is happening in the context of a favourable macroeconomic evolution with GDP growth of 3.1% in 2017, a reduction in unemployment and a favourable demographic makeup: Spain has 21 million citizens aged between 25 and 55 years, who may become potential buyers.

Moreover, financing is working in favour of house sales as the banks have opened the credit tap once again, although with greater demands on borrowers and more rigorous controls.

Alberto Valls, Partner responsible for Real Estate at Deloitte, explains that there is “growing unmet demand, which extends beyond the 10 main provinces”. In this sense, sources at the Deloitte have identified 272 hotspots where both demand and prices are growing, unemployment is decreasing and the market dynamics are favourable. “One third of those hotspots are not being covered by any property developers”, explains Gonzalo Gallego, Partner at Deloitte in the Financial Advisory Real Estate team.

These hotspots are located in 158 areas of the country. Specifically, Madrid and Barcelona account for more than 35% of them. In this context, funds such as Castlelake, Cerberus, Blackstone and Värde saw an opportunity in the wake of the recovery and have set up shop in the country. Others, such as Lone Star, have already completed their cycles, and with the sale of its entire stake in Neinor, which has been listed for less than a year, has collected its gains.

For Valls, the Spanish market continues to offer opportunities for investors to create value. “They are continuing to invest through alternative structures: alliances in projects, purchases of property developers and development of platforms for their subsequent debuts on the stock market”, he says.

The Partner responsible for Real Estate at Deloitte also recalls that, despite the creation of new players, the residential market in Spain is “highly fragmented”. And he predicts: “The market for real estate property developers is going to become more concentrated”.

Specifically, the five largest property developers in Spain account for just 6% of the market in terms of units handed over and 12% of the units under development. If we compare those figures with other more mature markets, the Top 5 British property developers account for 39% of the total units handed over, whilst the top five French developers account for 42%, according to data from Deloitte.

Large listed companies

Placing the focus on the large listed property developers, Metrovacesa, Aedas and Neinor, which have a combined stock market capitalisation of €5.2 billion, together, they own a portfolio of land with capacity for the development of 61,500 homes. Their French counterparts Nexity and Kaufman Broad, which have a combined market value of €3.3 billion, own land for the development of 72,100 homes. Meanwhile, the eight largest property developers in the UK, including Persimmon, Taylor Wimpey and Barratt, which have a combined market capitalisation of €37 billion, have potential land for around 300,000 homes.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Employment In The Real Estate Sector Rose By 6.4% In October

3 November 2017 – Eje Prime

The real estate sector is continuing its role as a driver of the growth of employment in Spain. According to data from the Social Security office, in October, real estate activity registered a total of 130,850 affiliated workers, 63 more than in September. That figure represents a YoY increase of 6.4%, with 7,921 more professionals now active in the sector.

Including October, real estate activity has now recorded four consecutive months above the threshold of 130,000 jobs. This hopeful figure for growth contrasts with the just over 118,000 workers that were registered in the segment less than two years ago, in January 2016. Last year, during one month, March, the figure actually fell below that threshold, to an annual minimum of 117,986.

Nevertheless, the sector has been recovering its strength, month after month, and the real estate business made its debut in 2017 with 124,053 affiliated workers registered for Social Security purposes. Since January, the MoM growth rate has stood at around 1%, with around 1,000 new jobs being created each month, until the summer, when the rate of increase stagnated.

The strong performance in terms of employment in the real estate sector goes hand in hand with the recovery of the job market in general right across the country. In October, the Social Security office registered 17 million affiliated workers, which represents an improvement of 3.9% on the total employment figures recorded in the same month in 2016. The growth rate of employment in the real estate sector (6.4%) clearly shows that it is moving at a faster pace than the economy in general.

If we add employment in real estate activity with employment in the construction sector (the construction of buildings, specialist construction work and civil engineering), then the sector recorded an average of 1.27 million affiliated workers in October, up by 6.7% compared to the same month last year.

Unemployment rose by 56,884 people in October

The number of registered unemployed people at the Public Employment Services’ offices rose by 56,884 in October compared to the previous month. Nevertheless, the increase was well below the average rise in the unemployment figure in October over the last eight years, which amounts to 90,000 people.

In YoY terms, unemployment in Spain fell by 7.9% in the tenth month of the year, bringing the total number of unemployed people to 3.46 million. By economic sector, registered unemployment decreased above all in the construction sector, whilst it increased in the agriculture, industry and services sectors.

Original story: Eje Prime

Translation: Carmel Drake

Solvia Puts 3 Hospitals Up For Sale

13 October 2017 – Solvia.es

Solvia, the nationwide leader in real estate services, has put three hospitals in Spain owned by Banco Sabadell, up for sale through an orderly process. The assets are currently leased to the hospital group Quironsalud, a high-profile company in the healthcare sector in Spain, which is in turn, owned by the German healthcare group Fresenius, which acquired 100% of Quironsalud in 2016.

This operation, which is expected to be closed before the end of the year, will be one of the largest to take place in 2017; moreover, this year is forecast to see record levels of investment in Spain. The operation is expected to spark interest amongst investors and Solvia had already received several offers from domestic and international groups, even before the hospitals had been put up for sale.

Hospital Quirón Barcelona, regarded as one of the iconic hospitals in the city, was constructed in 2006 in a privileged location (Plaza Alfonso Comín 7), just 5km from the city centre; it comprises a total surface area of 58,000 m2.

Hospital Quirón Vizcaya is located in the town of Erandio (Carretera Leioa-Unbe, 33 bis), 10km from the centre of Bilbao, and comprises a surface area of 19,000 m2 spread over two buildings.

Meanwhile, Hospital Quirón San Sebastián acquired a former palace in 1990, just 2km from the city centre (Parque Alcolea 7), which was subsequently converted into a hospital, comprising a complex of three buildings with a surface area of 7,000 m2.

Currently, the healthcare market is experiencing a significant shortage of supply in the face of rising demand, and so investors are very interested in identifying more opportunities beyond the traditional markets (France, Germany and United Kingdom) (…).

So far in 2017, investment in tertiary real estate assets in Spain has recorded a significant increase with respect to the previous year, favoured by an improvement in domestic demand, a reduction in unemployment and the favourable performance of tourism, whilst returns have continued to be compressed due to the strong investor pressure.

Proof of this is that more than €7,000 million has been invested in non-residential assets during the 8 months to August 2017, which represents an increase of more than 60% with respect to the same period last year. This year is expected to close with higher real estate investment figures than in 2016, with a volume of around €10,000 million.

Solvia has become the market leader in the real estate services sector in Spain, maintaining a portfolio of 148,000 real estate assets under management, whose value exceeds €31,000 million and of which more than €4,300 million are financial assets. Similarly, the firm manages €1,200 million of assets comprising land under development.

Original story: Solvia.es

Translation: Carmel Drake

The Perils Of The “Shared Flat Generation”

2 October 2017 – El Periódico

Sharing a flat is no longer the exclusive domain of students. First, the economic crisis and now, soaring rental prices, with Barcelona leading the way, are forcing more and more citizens to rent a room (rather than an entire home). According to the recent annual shared flat report from Idealista.com, demand for rooms for rent in Spain rose by 78.1% during the first six months of this year. The queues of the “shared flat generation” are continuing to grow.

The profile of people sharing flats has changed. “Traditionally, they were students, but now there are increasingly more qualified professionals”, says Beatriz Toribio, Head of Research at Fotocasa. Renting a home, not to mention buying one, falls outside of the economic reach of many citizens in the context of the exit from the crisis and the accelerated genesis of a new real estate bubble.

“There has been a change in mentality. Before the crisis, renting was not an option. But now it is the most flexible alternative in a changing world”, adds Toribio. In Spain, the average age of the “shared flat generation” is 29 years. They are young people, who essentially come from middle and middle-upper social classes, living in regional capitals and large cities. 81% of flat sharers are aged between 18 and 34 years and they tend to share with 2 people on average.

Such is the case, for example, of Nelson Bisbal (pictured above, left), a 31-year old engineer who lives in El Eixample, Barcelona. “I share a flat with two other people. Living by yourself is not feasible nowadays”, he says. Nelson and his flatmates pay just over €800 (per month) between the three of them. “If I had a flat to myself, I would have to give up other things. Very few of my friends live by themselves”. Nelson spends 25% of his salary on his monthly rental payments (…).

According to Sergio Nasarre, Professor of Civil Law and Director of the UNESCO Housing Project at the Universitat Rovira i Virgili (URV) (…), one of the parties responsible for this “cohousing” phenomenon are the tourist home platforms. “Airbnb, for example, has made it more profitable to rent a home to a foreign visitor than to a resident of the city. People now have no choice but to go and live in rooms rather than rent out entire homes”, he adds.

Although most of the people who share homes are in their 20s and 30s, there is also another reality: that of middle-aged people who are forced to share a home. Contributing factors include, to a large extent, the high level of unemployment and the loss of purchasing power as a result of price rises and salary decreases.

Black market rents

(…). Obtaining figures about how many people share homes is difficult given that many renters sublet rooms. According to the group of Technicians at the Ministry of Finance (Gestha), 41.4% of rents in Spain are black market arrangements (…).

Paying for a room, rather than for a flat, excludes tenants from the protections offered by the Urban Letting Law (LAU). Many people sublet so that they can afford to live or pay the rent, but many others do it to make a profit (…).

“During the real estate boom, a phenomenon emerged involving the overcrowding of homes with immigrants. They rented rooms in shifts”, says Nasarre. The situation in Barcelona at the moment (which is the city with the highest rental prices in Spain) is not unique; cities like Paris and London are suffering from even more extreme situations, he says.

This housing expert proposes, amongst other measures, administrative controls and the strengthening of tenants’ rights. He also opts for “decentralisation”. “All of the major universities, hospitals, are in Barcelona. Decentralising certain services would strengthen territorial cohesion”.

Original story: El Periódico (by Beatriz Pérez)

Translation: Carmel Drake