Spanish banks may be forced to slash the prices of repossessed homes this autumn.
Spain’s property market has been enjoying a slow but steady recovery in the last year, with prices stabilising and, in some areas, rising, due to demand from foreign investors and local buyers starting to return to the housing ladder. The country, though, still faces a large of backlog of property, with the banks owning homes from struggling developers and other repossessions.
Now, as part of a strategy to reduce banks’ real estate exposure, the Bank of Spain is putting lenders under pressure to cut the price of their homes. From 1st October, banks will be required to increase provisions against their repossessed portfolios and raise their sales, which can mainly be done by lowering prices.
“The troubled real estate exposure of Spanish banks has risen every year since the crisis started, despite huge write-offs each year, rising to a total of €84bn at the end of 2015,” notes .
While the sell-off of discounted bank repos might mean low-priced opportunities for buyers, though, they may not be in the areas investors traditionally look for, with developments in the Costa del Sol and Barcelona already sold.
Spanish house prices up nine quarters in a row
14th September 2016
Spanish house prices have now risen for nine quarters in a row – and the country’s second biggest bank says that prices are only going in one direction.
House prices climbed 3.9 per cent year-on-year in the second quarter of 2016, according to the National Statistics Institute, slower than the 6.3 per cent growth recorded in the first quarter. New homes saw prices rise 8.4 per cent, while existing homes saw prices rose 3.2 per cent. On a quarterly basis, hosue prices rose 1.8 per cent, the second quarter in a row of growth using that measure.
That growth is only forecast to keep going, according to BBVA.
The bank’s latest research shows that the market had a healthy first half of the year, fuelled by low mortgage rates and high tourist figures. The lender predicts that the market will continue to enjoy positive growth in the future.
“Economic moderation expected for the last months of the year suggests slower growth in housing sales compared to those recorded in the first half,” admits the bank, but expects sales, values and construction to increase, which will, in turn, fuel demand. Indeed, with sales currently rising in discounted conditions, those transactions are forecast to help push up prices.
Land shortage set to boost Barcelona house prices
4th August 2016
A land shortage in Barcelona is expected to boost house prices this year.
Research by CBRE show that the Catalan capital is suffering an acute shortage of land, with most new development activity focusing on refurbishing existing buildings, changing them from offices to residential property, for example. Five projects are underway in the Old Town alone, notes Spanish Property Insight. This is, ironically, because the rate of house price growth makes residential real estate more profitable as an investment than office space.
As a result, property values are expected to climb 10 per cent on average in 2016, says CBRE, with values in Catalonia overall predicted to climb 7 per cent.
Low mortgage interest rates, fuelling a rise in lending, is pushing up demand, too, which is driving prices higher.
Spanish house prices enjoy biggest rise in nine years
23rd June 2016
Spanish house prices enjoyed their biggest rise in nine years in the first quarter of 2016, reveals the National Statistics Institute (INE).
The INE’s latest official figures, reported by El Mundo, show that prices climbed 6.3 per cent in the first three months of the year compared to the same period in 2015, their biggest quarterly increase since Q3 2007. The rise marks the eighth quarter of annual growth in a row.
Existing homes led the way, with prices up 6.4 per cent (again, the biggest rise since Q3 2007), while new build homes saw prices rise 6.1 per cent (the biggest rise since Q1 2008).
On a quarter-on-quarter basis, the start of 2016 also shows a reassuring return to positive momentum, following a 0.1 per cent dip in the final three months of 2015.
All of Spain’s regions saw annual price growth year-on-year, with Madrid enjoying the strongest (9.7 per cent), followed by the Balearic Islands (8.8 per cent). The lowest climbs were recorded in Castilla-La Mancha (1.5 per cent), Castilla y León (1.7 per cent) and Extremadura (1.7 per cent).
Spanish house prices up for sixth quarter in a row
7th June 2016
Spanish house prices have increased for a sixth quarter in a row, according to new figures from the Ministry of Public Works.
The Ministry’s data shows that the average price per square metre of residential property in Spain stood at €1,492.4 in the first quarter of 2016, up 0.2 per cent from the previous quarter and 2.4 per cent compared to the same months last year.
In real terms, discounting inflation, house prices have now risen for the sixth quarter in a row, adds the Ministry.
The Balearics continue to lead the way, with a price rise of 9.6 per cent year-on-year, followed by Catalonia (4.9 per cent), Madrid (4.2 per cent), Extremadura (3.7 per cent), Galicia (2.6 per cent), Valencia (2.4 per cent) and the Canary Islands (2.4 per cent). 12 of the autonomous communities saw price rises annually, with five seeing prices decline, including La Rioja (down 2.2 per cent)), the Basque Country (1.9 per cent), Cantabria (1.3 per cent), Aragorn (0.1 per cent) and Melilla (0.3 per cent).
In total, prices are now 29 per cent lower than the market peak in the first quarter of 2008, with values recovering 2.5 per cent from the trough in the third quarter of 2014.
Spanish house prices edged up in April
24th May 2016
Spanish house prices edged upwards in April.
The average price of new and existing homes rose 0.1 per cent year-on-year last month, according to appraisals firm Tinsa. The increase is lower than the 0.8 per cent and 2.1 per cent annual growth recorded in March and February 2016, but the first four month show an average increase of 1.9 per cent – higher than the 1.4 per cent recorded on average over the first four months.
Prices are now ranked at around the 2003 mark, having fallen 41.1 per cent since the 2007 peak, but the signs of bottoming out show a promising indication of a turnaround.
Indeed, the Mediterranean Coast saw prices rise 4.4 per cent year-on-year in April 2016, although the Metropolitan Areas saw prices remain flat from April a year ago. While Capitals and Larges Cities (0.2 per cent) and the Balearics and Canaries (0.4 per cent) both saw prices dip, the average price in each group is higher than at the end of 2015.
Spanish house prices up for second quarter in a row
15th April 2016
Spanish house prices have risen for the second quarter in a row at the start of 2016.
According to the latest report from Tinsa, the average price of houses in Spain rose by 1.4 per cent year-on-year in the first three months of the year, the second quarter of annual growth in a row.
In a promising sign of the recovery’s building momentum, the number of regions showing year-on-year growth outnumbered those suffering declines for the first time since the crisis began.
Catalonia and Madrid are leading the way, with price rises of 8.2 per cent and 7 per cent respectively, followed by the Balearics (3.8 per cent), Castilla-La Mancha (3.5 per cent), the Canaries (2.3 per cent), Asturias (2.2 per cent), La Rioja (2.2 per cent) and the Basque Country (0.4 per cent). Aragon and Galicia led declines, with prices dipping 3.5 per cent and 3.1 per cent respectively.
Spanish house prices forecast to climb 6pc/h3>
4th March 2016
Spanish house prices are forecast to climb 6 per cent in the coming 12 months, as the market continues to recover.
A new report from CBRE predicts that values will rise 5.95 per cent in 2016, as price growth strengthens across the country and optimism spreads.
Madrid, Barcelona, Valencia and the Balearic Islands are highlighted as the areas set for strongest growth, based on their relative strong performances in 2015. In Q3 of last year, according to the INE, Madrid (6.9 per cent), Catalonia (6.1 per cent), Valencia (6.1 per cent) and the Balearics (8.4 per cent) were the most sought-after parts of the country.
The same three months are expected to enjoy the strongest performance in 2016, with the quarter’s growth forecast at 6.3 per cent year-on-year.
CBRE also notes a 40 per cent rise in resales and 35 per cent in new home sales, as new-build supply dries up in the most popular hotpots, which they suggest puts 2016 on course for both more investment and more construction. Indeed, in Marid alone, planning approvals rose 63 per cent in the first 10 months of 2015, ahead of national increase of 18 per cent.
Investment has been a key driver in the recovery of the country’s real estate in the years since the global financial crisis, with last year, in particular, seeing demand from overseas soar on the back of favourable exchange rates between the pound, dollar and euro. CBRE also attributes the recovery to low interest rates, which have made lending more affordable property more attractive to investors.
Rental investment could also become a growing factor in the market’s recovery in the future, as CBRE highlights the growth of the sector among those unable to afford to purchase a home.
“The rental market is expected to continue to expand in 2016 and the ratio of rented housing (14.9 per cent in 2014) will continue to converge towards the Eurozone average,” says CBRE.Google+