Relevant news on the real estate sector in Spain – July 2018


Selection of relevant news on the real estate sector in Spain

We are pleased to provide you with information released on different media about real estate in Spain. We hope you find it interesting. We are at your disposal to analyze how this news can generate opportunities for your next investment.

The price of second-hand homes goes up 1.6% in July and 9.3% in the last year

Second-hand property in Spain has recorded 1.6% increment in July, reaching 1,690 euros/sq. m., according to the last real estate price index informed by idealista. If compared to data obtained in June 2017 (1,546 euros/sq. m.) the year-on-year increase has been 9.3%.

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New construction work permits rose 26.2% last year

The information about construction work permits furnished by the Official Technical Architects Association and the data gathered by Constructec indicate that new construction work permits were issued for a number of 109,047 homes, the highest figure since 2011, accounting for a 26.2% increase.

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Valencia, Alicante and Mallorca use their land market for construction of homes in the Mediterranean area

Some coastline cities in the Mediterranean area are starting to revive their residential land market where there is still wide availability of land to be developed. The increase in the land market activity always led by Madrid and Barcelona is now happening in cities such as Valencia, Alicante, Benidorm or Palma.

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Cerberus obtains Sabadell´s Property (9,100 M) after winning bid against Blackstone

As informed by the entity through communication sent to the National Securities Market Commission, “the real estate assets purpose of the Operation have a total gross value of approximately 9,100 million euros and a total net value of approximately 3,900 million euros”. These are two out of the four awarded real estate porfolios which had been presented by Sabadell “Challenger” and “Coliseum” which will be delivered to newly established companies where Cerberus will participate, either directly or indirectly, with 80% the capital and the remaining 20% owned by Banco Sabadell.

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Delay in permits for new construction work will exhaust housing stock in Madrid in 9 months

According to research conducted by Instituto Coordenadas de Gobernanza y Economía Aplicada, it has been stated that the Community of Madrid is undergoing an “overwhelming” deficit of new housing units, barely reaching the number of 3,000 new apartments, and the current pace of sales indicates that the “stock” will be exhausted within a 9-10 month period. The main reason for this “collapse” in new housing units, according to information provided by Instituto Coordenadas, involves the “extended” terms for work construction permits processes and approvals by the pertinent authorities.

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Banks “line up” to finance rented homes

One of the challenges that Spain is currently facing in residential market is the organization of the housing rental market because of the atomization and boom being experienced today. At this moment, there is a huge demand but the supply is not enough, and the new Housing Plan approved by the Government is not sufficient to encourage supply, with aids granted to developers to build apartments for rent.

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Consumers confidence rebound due to current and future better perception

The Centro de Investigaciones Sociológicas (CIS) (Sociological Research Center) has published today the Consumer Confidence Index (CCI) which has gone up 107 points, 9.3 above the level recorded in May, and 1.2 points higher than one year ago, so, for the first time since January, it is returning to values exceeding 100 points thus marking the threshold between the positive and negative perception of the economy. Evaluating the current situation, the perception of a general improved economy and labor market has increased.

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Rental prices reach historic peak values in Baleares, Las Palmas, Salamanca, Barcelona and Madrid

Barcelona, with a maximum price of 13.90 euros per square meter reached in January 2018, is the province with the highest rental price, followed by Madrid with 12.36 euros per square meter reached in April this year. These two provinces are followed by Baleares, with 10.60 euros; las Palmas with 7.65 euros and Salamanca with 7.34 euros per square meter. As informed by the Head of Research and Public Affairs at fotocasa, Beatriz Toribio, “the average price of rented homes in Spain has been increasing continuously for the last three years but with more intensity in 2017, especially in big capital cities and touristic destinations such as Madrid or Barcelona”.

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New home price picks up speed with Madrid, Barcelona and Palma de Mallorca leading the way

The recovery of residential real estate market is being very heterogeneous and it is based on second-hand homes. Sociedad de Tasación highlights in its July report that for every new home sold, eleven second-hand units are traded. The report prepared by Sociedad de Tasación reveals that the highest home prices are in Barcelona (4,015 euros/sq. m.), San Sebastián (3,464 euros/sq. m.) and Madrid (3,293 euros/sq. m.) and the lowest values are in Cáceres (1,141 euros/sq. m.), Badajoz (1,169 euros/sq. m.) and Ciudad Real (1,173 euros/sq. m.).

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Madrid’s price increment expands to peripheral locations: housing values grow more than 20% in Vicálvaro, Moratalaz and Fuencarral-El Pardo

During the second quarter of the year, prices in Vicálvaro, Moratalaz and Fuencarral-El Pardo districts have gone up 22%, 21.5% and 20.4% above the increments recorded in districts such as Centro, Retiro, Salamanca and Chamberi, the most expensive zones in the capital city and which were leading the way of price increase, according to data stated in the quarterly report made by Tinsa company. “This general inflation situation has been generated by the fact that demand has moved from centric districts to peripheral areas, and also some price pressure has been transferred to such areas”, as pointed out on the report.

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Housing: rented homes reach peak values while owned homes drop to their lowest figures

Specifically, the percentage of owned homes dropped in 2017 to 76.7%, compared to 77.1% the previous year. This is the minimum historical value starting in 2004 and with peak values of 80.5% in 2005. On the other hand, the number of families living in rented units reached maximum figures since statistics are provided, with 16.9% compared to 16.3% the previous year. In 2004, this percentage was 13.9%, reaching minimum values of 13% in 2005.

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Housing will rise 6% this year, reaching two-digit figures in Madrid, Málaga and Valencia

Specifically, in 2018 prices will go up 6% at national level and, this increment will be stronger in cities such as Madrid, Málaga, Baleares or Valencia, with an increase of approximately 10%, markets experiencing intense demand and where supply – mainly in terms of new construction work- is very limited.

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