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Here you will find news, views, events and information relating to real-estate in Spain.

COVID-19 Hits Sales Figures in March

Empty beaches, empty real estate offices!
Empty beaches, empty real estate offices with fall in home sales

Empty beaches, empty real estate offices!

Figures released by the INE this week reflect the predicted decline of property sales in March with an 18.6% fall. This followed the return to positive monthly variations in February after six consecutive months of falls. Of course, the fall in March is a direct result of the declaration of a state of alarm by the Government which essentially put a hold on the property market as a whole.

Many operations that were already underway at the start of March had to be stopped and those that were not yet started and not urgent were postponed altogether until normal activity is resumed.

The figure of 34,806 operations which were closed during March takes us back to figures similar to those recorded in March 2016, when 31,877 transactions were closed. However, this year’s March data is not too far from monthly figures we saw in 2019 following the introduction of the new mortgage law which caused the delay of many sales and purchases.

Fotocasa Director of Communications, Anaïs López, said “It is possible that many home sales that have been postponed or cancelled during the month of March, due to the state of alarm, will resume once the situation has returned to normal, meaning the data for the coming months may reflect these operations along with new interest.

It is very possible that the fall we expect to see during April will be larger than that seen in March, since the first 15 days of March were not subject to the nationwide lockdown. In April, the registrars only attended to essential cases and very few transactions were closed.

Quick recovery?

However, Fotocasa suggest the recovery may be quicker than expected. “The interest for housing is currently very high and figures from the portal indicate that the Spanish have every intention of looking for new housing in the coming months. We are going to see demand for housing from those who were looking before the pandemic joined by demand from new buyers resulting from the confinement as many people realised that their homes did not adapt well to their needs. This demand will be very important for the recovery of the sector,” said López.

INE figures

The data from the INE showed home sales in March were 18.6% lower than in March 2019.

The autonomous communities to see the most sales were Andalucia (7,054. A fall of 20.7% from March 2019) Catalonia (5,949. A fall of 13.7% from March 2019) and Valencia (4,974. A fall of 15.8% from March 2019).

All of the communities showed a fall in sales when compared to March last year but this is of course understandable given the precautions implemented to prevent the spread of the COVID-19. Madrid was the worst affected seeing a fall of 30.8% in home sales, while the least affected was Murcia which experienced only a 4.2% fall.

As the restrictions are slowly and cautiously lifted we hope to see some level or normality returned to the property market. We at Marbella For Sale have reopened our office but currently we are seeing clients by appointment only. Furthermore, we have taken the necessary steps to ensure the safety of our clients by installing screens on all of our desks and providing facemasks and hand sanitiser for our clients and staff.

To make an appointment call +34 952 907 386 and we will be happy to see you.

 

Cost of Renting Rises Despite Lockdown

Madrid: most expensive for renting
Madrid: most expensive for rental property

Madrid: most expensive for renting in Spain

During the first quarter of 2020, the cost of renting a home in Spain has increased by 6.5%, a trend that is expected to continue despite the situation with corona virus.

The increase is the largest recorded in a first quarter in over 14 years of data, according to the fotocasa real estate index.

The average monthly rental cost nationally has increased 9.9% over the last 12 months, putting the average cost at €10.82 per square metre, per month. However, this is still a long way from the average in some communities with Barcelona and Madrid having average prices 40% and 35% higher, respectively.

In general, the price of rental property continues to register quarterly and annual increases in price, although they are more moderate increases than were registered just a year ago, when increases were often in double digits. It is likely that the situation we are currently experiencing with the coronavirus will not cause prices to drop and the upward trend in rental costs will continue in the coming months. The increases will be smoother than those registered in 2018 and 2019 but the rental boom will continue throughout 2020.

Autonomous Communities

88% of the autonomous communities presented positive quarterly figures in March 2020, the same figure as in March 2019. Navarra, with an increase of 16.7%, saw the most significant price increase in this period. Following this were the communities of Murcia (8.5%), Extremadura (8.1%), Catalonia (6.9%), Valencia (6.8%), the Balearic Islands (6.5%), Castilla and León (6%), Andalusia (4.4%), Castilla-La Mancha (4.4%), Cantabria (3.6%), Galicia (2.8%), the Canary Islands (2.7%), Madrid (2.3%), Aragon (0.5%) and the Basque Country (0.3%). Meanwhile, La Rioja (-1.7%) and Asturias (-0.3%), are the only communities that recorded price falls in March.

Ranking the communities by price gives us Madrid in first place, one of only two that exceed the barrier of 15.00 euros per square metre per month, specifically, 15.20 euros. Following Madrid are the communities of Catalonia (€15.11 p/m² per month), the Basque Country (€13.10 p/m² per month), the Balearic Islands (€12.98 p/m² per month), the Canary Islands (€10.00 p/m²) per month), Navarra (€9.83 p/m² per month), Andalusia (€8.70 p/m² per month), Cantabria (€8.59 p/m² per month), Valencian Community (€8.58 p/m² per month), Aragon (€8.22 p/m² per month), Asturias (€7.27 p/m² per month), Castilla y León (€7.02 p/m² per month), Galicia (€6.94 p/m² per month), Region of Murcia (€6.77 p/m² per month), La Rioja (€6.43 p/m² per month), Castilla-La Mancha (€5.70 p/m² per month) and Extremadura (€5.32 p/m² per month).

Price by Province

In the first quarter of 2020 the cost of renting a home increased in 87% of the 47 provinces of Spain, while in the same period of 2019 there were increases in 77%.

In March, five provinces saw rental property prices increase above 10%, while of the six that saw decreases, only one exceeded -1%.

The ten provinces with the highest quarterly increase in Spain are: Navarra (16.7%), Huelva (16.5%), Lugo (14.6%), Ávila (12.5%), Albacete (10.4% ), Guadalajara (9.6%), Badajoz (9.5%), Zamora (8.7%), Murcia (8.5%) and Cádiz (7.8%). On the other hand, the provinces with decrease are: La Rioja (-1.7%), Bizkaia (-0.9%), A Coruña (-0.7%), Segovia (-0.7%), Toledo (-0.3%) and Asturias (-0.3%).

In terms of rental property prices by province, Barcelona and Madrid have both exceeded €15.00 p/m² per month. Barcelona stands at €16.27 p/m² per month and Madrid at €15.20 p/m² per month. These provinces are followed by Gipuzkoa with €14.93 p/m² per month, the Balearic Islands with €12.98 p/m² per month, Bizkaia with €12.51 p/m² per month, Malaga with €10.33 p/m² per month, Álava with €10.15 p/m² per month and Las Palmas with €10.12 p/m² per month. The two cheapest provinces are Cáceres with €4.78 p/m² per month and Jaén with €5.08 p/m² per month.

 

Home Sales in Spain Slow in February

Andalusia saw 8,882 home sales in February
Andalusia saw 8,882 home sales in February

Andalusia saw 8,882 home sales in February

In February 2020 there were 89,710 property sales registered in the public records. This represents a fall of 1.1% when compared to February 2019. When compared to the previous month the variation is -0.5%, according to figures released by the INE.

In terms of home sales, there was 44,104 registered sales recorded in the registers. This represents an increase of 0.1% when compared to a year ago. However, when compared to the previous month the variation in property sales was negative at -6%.

Results by autonomous communities

In February, the total number of transferred properties recorded in the property registers per 100,000 inhabitants reached its highest values in La Rioja (890), Valencia (733) and Murcia (726).

Meanwhile, Murcia (59.9%), Valencia (22.7%) and Galicia (15.5%) registered the highest annual variation rates. In turn, Comunidad Foral de Navarra (–29.7%), Castilla – La Mancha (–26.7%) and the Basque Country (–21.5%) presented the lowest annual rates.

In terms of registered home sales, the communities with the highest number of transfers per 100,000 inhabitants are Valencia (165), Andalusia (134) and Cantabria (133).

The communities with the largest annual increases in the number of sales of homes in February are Aragón (12.7%), the Balearic Islands (8.2%) and Andalusia (8%). In Andalusia, there were 8,882 home sales in February.

For their part, La Rioja (–36.4%), the Basque Country (–20.7%) and Extremadura (–6.6%) registered the greatest decreases.

These results represent the most accurate figures we will likely see for a few months. Given that March and April have been spent on total lockdown due to COVID-19, it is unlikely that any sales will be registered at all throughout those months and therefore there will be little point in looking at, let alone comparing, figures from those months.

Let us just hope that once lockdown is lifted we see life return to the property market!

 

Property Buyers Looking Beyond Cities

Not much space available in Spanish cities
Not much space available in Spanish cities

Not much space available in Spanish cities

Over three weeks of being confined to your home can make you wonder if it really is your home. According to a study carried out by Idealista, since the state of alarm was declared in Spain, the number of property buyers searching for a home within the provincial capitals has dropped from 44.1% to 38.8%.

According to Fernando Encinar, from Idealista, this could be because many people have realised that they live in a house that does not provide enough space and they would perhaps prefer to live in a less central area in exchange for more square metres, more light, or a garden or terrace.

Additionally, the work-from-home situation seems to have shown many employees that they don’t necessarily need to live in the city close to their employer, pushing many to consider moving from the large urban centres.

This phenomenon seems to be occurring in all Spanish provinces, including in the larger cities. During January, for example, searches in 51.3% of cases in Barcelona were concentrated in the city, but this has now fallen to 49.1%. Similarly, in Madrid, 63.2% of property buyers searches in January were in and around the city. This has now fallen to 60.8%. And in Seville, the numbers have dropped from 56.7% in January and 53.7% now. In the province of Malaga the capital accounted for 27.6% of the searches, while now it has been reduced to 24.1%.

Not Just the Tourist Traps

In Zaragoza those searching for property for sale in the capital has gone from 82% in January to 77.1%, while in Bilbao the change is from 41% to 35.5%.

Valencia is also seeing a change with searches in the city dropping from 43.8% to 37.7%. Palma (from 34.8% to 27.9%) and Valladolid (from 69% to 59.6%) are also following the trend of the larger markets.

La Rioja is where the change in demand is most noticeable: in January 57.2% of property buyers searches were concentrated in the capital, while during confinement it has slumped to 43%. They are followed by the provinces of Albacete (67% in the capital in January, to 53% now), Soria (45.8% in January and 32% now) and A Coruña (37.1% in January and 23.7% now).

The Catalan provinces, with the exception of Barcelona, are the places where this phenomenon is least noticeable. Lleida is the province in which the capital has lost the least weight, since it saw 29.5% of searches in January, compared to 28.8% now. They are followed by Girona (8.5% in January and 6.8% now) and Tarragona (13.4% in January and 11.6% now).

 

House Prices Down in First Quarter

House prices in Malaga fell 2.57% in Q1
Average house price in Malaga fell 2.57% in Q1

House prices in Malaga fell 2.57% in Q1

According to a quarterly report from pisos.com, the average price of second-hand housing in Spain in March was 1,690 euros per square metre. This represents a decrease of 1.25% when compared to December 2019. Year-on-year, the fall is slightly smaller at -0.61%. When comparing March to February, the contraction is -0.89%.

The trend towards a slowdown in house price increases has been seen for a few months but this could now be compounded by the health crisis we are experiencing,” says Ferran Font, director of studies at pisos.com. “It is still too early to make forecasts, but it is clear that the state of lockdown the country is currently going through has paralysed the real estate industry, since the confinement means potential buyers are not able to visit properties. This will undoubtedly affect the transaction figures and, therefore, the mortgage market too. It could also have an impact of prices dependent on how long the situation continues.

Font said that “although the symptoms of economic slowdown began to be noticed at the end of 2019, an unexpected crisis like that of COVID-19 could further damage the housing market in Spain. However, we must be cautious and not start making negative predictions which could further discourage the market.” Font suggests that now more than ever it is vital that all real estate professionals collaborate and join efforts in order to return to normality as soon as possible.

One possible outcome from this is that while many more people are spending time at home, potential buyers may take the opportunity to peruse property websites and express an interest in buying a property in Spain once the restrictions are lifted.

Autonomous Communities

In the first quarter of this year, the highest increases in the price of second-hand homes for sale were seen in the Balearic Islands (1.68%), Aragon (0.98%) and Extremadura (0.71%). The largest decreases were located in Andalusia (-3.19%), Castilla-La Mancha (-2.37%) and Madrid (-2.28%).

Year-on-year, the most significant increases came from the Balearic Islands (8.32%), the Canary Islands (4.33%) and Madrid (3.60%). The largest annual falls occurred in La Rioja (-5.40%), Castilla-La Mancha (-4.72%) and Catalonia (-3.89%).

The most expensive region at the close of the first quarter was the Balearic Islands with an average price per square metre of €3,165. Meanwhile, the cheapest was Castilla-La Mancha (€870 p/m²).

Provinces

The largest quarterly house price increases by province were seen in Cuenca (5.02%), Teruel (3.10%) and Álava (2.54%), while the most notable falls were seen in Lugo (-4.94%), Seville (-2.74%) and Malaga (-2.57%).

Year-on-year, the Balearic Islands (8.32%), Álava (8.31%) and Cuenca (5.92%) showed the largest price increases. However, the largest falls in the price of houses in Spain were seen in Ciudad Real (-6.98%), Zamora (-6.91%) and Lleida (-6.42%).

The most expensive province was Balearic Islands where owners are asking an average of €3,165 p/m², while the cheapest province was Cuenca (€747 p/m²).