Selection of relevant news on Spain real estate sector
We are pleased to send you information published in different media on topics related to real estate investments in Spain.
We hope this is of interest to you. We are at your disposal to analyze how this information can generate opportunities for your next investment.
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In 2017, rental prices close at their highest level in 11 years
The most recent report prepared by Fotocasa on homes for rental in Spain in 2017 reveals that rental prices experienced an average 8.9% revaluation last year, this being the highest increase historically recorded by the portal since its beginning in 2007.
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Real Property is breaking records: the investment by companies and funds climbs 45%
Investments reached 13,889 million euros in 2017 thus achieving a historic record, as informed by the real estate consulting company JLL. “This year there have been large investments in sectors such as residential property or alternative investments where capital did not have access before and there have also been very important land operations. “Money is still cheap in Europe and real estate is a very attractive option”.
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Homes are embarking on another successful cycle without extravagances
One decade after the crisis and after four years since the beginning of the recovery process, analysts agree on the fact that a new successful period is being initiated, not at all related to that one spoilt in 2008. The most optimistic ones even predict up to five years of stable and sustained increments in home values, increase in sales and construction of new property in light of the global economic recovery. Regarding prices, predictions for the year 2018 fluctuate between a moderate 3% and 6% on average for the whole country.
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One third of Spaniards intends to buy a home in 2018
Specifically, 17% of Spaniards is determined to buy a house in 2018 and 18% of them is planning to do so, while 65% discards this option, according to a survey conducted by the financial comparator HelpMyCash.com.
Results involve respondents owning homes (59%) and those who have not acquired one yet (41%).
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The stock of second-hand homes in Madrid plummets over 40% in the last 3 years
The second-hand housing stock available for sale dropped 42.9% in the city of Madrid in the last 3 years, according to a survey conducted by idealista. In December 2014, a total of 30,027 housing units were announced in the portal while in the same month of 2017 the number fell to 17,143 units.
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Projections of an even better 2018 for the real estate market
In Spain, you can feel the sensation that homes are being increasingly sold in less time, at still low rates and at higher prices. This was certified by the National Statistics Institute (INE) when publishing the sales data of last October, when a number of 37,228 homes were sold, 25.7% more than the same month in the previous year. It is mainly surprising that Madrid, together with Cataluña and Balearic Islands are the territories where most of the activity is concentrated month after month, still achieving record figures after more than three years in positive; achieving 50% more of home sales in the year.
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Andalucía leads unemployment reduction in December
The number of unemployed people registered in the National Employment Institute (INEM) in Andalucía dropped to 57,713 throughout the last year, 6.54% less compared to 2016. Andalucía led the unemployment drop in December with absolute figures, both on a monthly basis and on a year-on-year basis, therefore the total number of unemployed people by the end of 2017 was a little over 800,000.
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Málaga is among the most profitable cities for housing rental
The boom of touristic apartments targeted to seasonal visitors, together with the increase in the demand of this market among young people and workers have positioned Málaga in the first place of the cities with less risk for this type of business, together with Madrid, Valencia y Alicante, according to the Real Estate Tendencies Report published by the Appraisal Association (Sociedad de Tasación). Rental income went up 7.29% in the last quarter, compared to 6.91% the year before and even though Malaga is not ranking first in terms of price increase, the report shows that it is among the cities with better performance, considering the “low level of risk, high returns and a remarkable evolution compared to the previous year”.
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02/01/2018
The price of brand-new housing goes up 5% in 2017, the highest climb in one decade
Brand-new houses are returning to the real estate scenario after ten years that homes have barely been constructed and with a clear demand by the second-hand market, situation that is now starting to change.
The price has been set at 2,227 per square meter and is growing 3.3% during the second half of the year, thus doubling the growth experienced in the first six-month period, which was 1.7% according to the analysis conducted by the Appraisal Association, in charge of analyzing 400 Spanish districts.
With this increase, prices in the cities of Madrid and Barcelona are getting nearer to the levels reached before the crisis. Therefore, Barcelona has become the most expensive city in Spain, with 3,865 euros per square meter, compared to 4,500 euros in December 2007. Also in Madrid, ranking third after San Sebastián (3,441 euros), the price has been set at 3,167 euros, compared to 3,971 euros in the same period ten years ago.
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30/12/2017
The real estate market in 2018: more housing units and more expensive
The housing market in Spain is closing the year 2017 with a very good mark and, as estimated, the year 2018 will be even better. Prices, sales, mortgages and authorizations for new construction works, in addition to rentals and returns, have continued to increase this year and they have reflected a clear recovery and state of normality.
For the first time since 2006, brand-new home sales have been incremented and the financial entities are establishing less strict conditions to grant mortgages, as verified by the Bank of Spain recently. In addition, mortgages are cheap: the average interest rate was 2.67% in October, the lowest figure historically recorded by INE from 2009.
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28/12/2017
Sabadell is searching for investors to promote two million meters of land
The entity has decided to split and create a new company called Solvia Desarrollos Inmobiliarios, which is engaged in land development activities. The company shall manage a total of 2.22 million square meters, equivalent to almost 300 football fields. A number of 4000 housing units are under way and they belong to more than 84 developers. Their asset management portfolio involves more than 600 million euros, approximately 15% of the income run by Solvia and, therefore, it is positioned in a second league within the sector following the well-known property developers headed by Metrovacesa, Neinor, Aedas and Vía Célere. Sareb is the main owner of lands in Spain.
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Bankia gets back to the real estate development and capital market business
Bankia will be released from the restrictions imposed by Brussels in exchange for bailout funds. The bank has already announced its intention to grant credits again for housing development purposes, taking advantage of the growth that is currently being experienced by this business and in view of the change of cycle. Bankia has decided to create a Management Office for Developers as they estimate that in the “next three and four years, a number of new 150,000 housing units will be built in Spain”.
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All experts agree on this. The year that is about to end has been fantastic for the Spanish residential property market, the best year since the burst of real estate bubble one decade ago and, furthermore, the tendency will be maintained at least in 2018 in terms of housing unit construction, house sales, granting of mortgages and price increments. In addition, even though the market will continue to move at different speeds with Madrid, Barcelona, Balearic Islands, and the coastline areas as the top ones, the recovery will be gradually reaching other zones.
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The best quarter registered in home sales since 2008 with 12l,561 operations
The number of transactions went up 16.7% in the third quarter and reached 121,561 housing units, the best third quarter since 2008 when a number of 122,949 operations were closed, according to data provided by the Ministry of Public Works. Buyers opted for second-hand housing units with more affordable prices. Thus, this type of operations recorded a number of 110,126 transactions (90.6%). In turn, 11,435 operations involved brand-new homes, accounting for 9.4% of the total.
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Rajoy ensures Spain will grow at least 2.5% on average until 2020
The head of Government, Mariano Rajoy, has anticipated on Monday that the Spanish economy will grow on average 2.5% until 2020 and indicated that this growth will be “intensely” transferred to jobs, as Spain may reach the number of 20 million employees in 2019 and reduce the unemployment rate by 11%.
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The largest funds opt for residential land acquisition
The top ten real estate developers of the country are willing to start the construction of 20,000 housing units during 2018. This situation is possible thanks to the availability of urban lands for construction purposes which have been accumulated in the last year. The largest Spanish developers, and also foreign funds, with an almost frenetic level of activity, are competing for the control of lands where construction can be conducted without modifying their qualification.
Blackstone, Cerberus, Kennedy Wilson, TPG, Värde Partners and Apollo started to acquire the commercial and management platforms which had been created by banks, the “services”, when the real estate sector started to take off in 2013. Simultaneously, foreign funds such as Lonestar, Centerbridge, HMC, Eurostone, Aquila, Oaktree, Castlelake, Varde or Pimco are strongly betting on the development of residential property, thus becoming the new constructors of housing units. There is no possibility of developments if no lands are available. The scarcity of lands ready for construction pushes raw material prices up.
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The number of landlords which are also tenants is increasing (and this is not due to the crisis)
With the economic recovery, the real estate market is showing its best side again: sales are going up, real estate prices are rising, more units are under construction process and, mainly, there is a boom in rental supply and demand. Those homes which have not been affected by unemployment or income problems are now buying houses again, the so called replacement homes: bigger, better equipped and, especially, situated in a better location. Many are conducting operations in cash but a quite large segment is moving to homes that they used to rent while renting their residence unit. They are simultaneously landlords and tenants, and this is not because of money problems but a personal decision.
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The real estate activity is still 29.7% under peak values in 2007
The head of the Property Registrars Association has submitted the new Real Estate Activity Registry Index (IRAI) which, for the first time, is trying to analyze the real estate progress by evaluating common indicators at the same time. If analyzed historically, it is possible to prove how figures show that the current activity would be 29.7% slightly under the first three-month period of 2007, when the IRAI reached its maximum level of 139.90 points. That level started to decline as of that date and, except for the moderate recovery experienced in 2010 as a consequence of the controversial Plan E of investments, it reached the minimum figure in the series in the fourth quarter of 2013 at only 67.98 points, which accounts for an accumulated 7-year contraction of 51.4%.
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