Tag: VPO

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

The Average Home In 2014: 97m2, Second Hand, With Sea Views

11 February 2015 – Cinco Días

Last year, home ownership was yet another symptom of the start of the recovery of the global economy. In fact, the largest investment made by households over the course of their lives can only be re-actived once the households themselves perceive that their income is going to be stable and steady over the medium term and (in the event that they need financing) when they have access to credit.

And those are, in the opinion of all of the experts, the two variables (employment and financing) that started operating again in 2014 after years of very tough crisis and apathy from scarce solvent demand. According to the figures published this morning by the National Institute of Statistics (Instituto Nacional de Estadísticas or INE), prepared using information from regional property records, last year, 319,389 homes were sold, i.e. 2.2% more than in 2013 and the first increase since 2010.

89.7% of the homes that were purchased were unsubsidised (free), compared with the remaining 10.3% that were subsidised (VPO). Sales of unsubsidised homes increased by 3.2%, whereas sales of subsidised homes continued their decline, dropping by 6.2% in 2014.

Another key finding to come out of the information is that sales of second hand homes increased their prominence gradually and at an unstoppable rate during the crisis. Thus, whilst the norm during the boom was to sell almost as many new homes as second hand homes, last year only 37.4% of the homes sold were new builds, compared with 62.6% that were “used”. And again, whilst sales of the former decreased by 16.9% in 2014, the volume of second hand homes sold last year increased by 18.4% over the previous year.

Size and type

In terms of the regions where the most house sales were recorded, INE quantifies it in two ways. Firstly, it extracts the data from the property registers of each autonomous region and then it measures the volume of transactions per 100,000 inhabitants.

Thus, the regions with the greatest activity were Valencia, with 1,182 house sales per 100,000 inhabitants, followed by the Balearic Islands, with 1,043 and the Canary Islands with 1,015. In absolute terms, the Balearic Islands, Navarra, the Canary Islands, the País Vasco and Madrid were the five autonomous regions that experienced the greatest increases in real estate sales.

With all of these statistics, plus those provided to Cinco Días by Tinsa, about the type and size of homes sold last year, we can conclude that the profile of the typical house would be: an unsubsidised, second hand apartment or multi-family home (which accounted for 67% of the market), with an average surface area of 97 square metres and, in many cases, with sea views; since the typical home would likely be located in one of the territories that recorded the highest transaction volumes.

The information provided by the appraiser also shows that this best selling home would have been sold for an average price of €136,212, which represents a cumulative depreciation of 38% with respect to the average prices paid for a typical home in 2007, the year in which property prices reached their peak. Tinsa estimates that the average mortgage taken out last year amounted to €100,782, which was 32.3% lower than the average amount borrowed during the boom years.

Original story: Cinco Días (by Raquel Díaz Guijarro)

Translation: Carmel Drake