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Marbella Sees Boost in Hotel Investment

The iconic hotel will reopen next year
The iconic hotel will reopen next year

The iconic hotel will reopen next year

The economic recovery that, according to multiple indicators, is being seen in Marbella is noticeable in the increase of hotel projects in the area.

Marbella closed 2017 with a net increase of 924 new companies. In January, more than 28,000 tourists visited the town, an increase of 18.5% over the same month in the previous year, according to the city council.

The economic recovery is also noticeable in the real estate market. The demand for housing in the most exclusive areas of the town already exceeds supply, which has caused some prices to double compared to those of 2011, when the market hit bottom. Also significant is the increase in rental costs which grew around 21% over 2017.

Now, renewed interest in hotel projects is also on the increase. The French chain Club Med plans to lay the first brick on Thursday in their project to reform the hotel Don Miguel, a hotel designed and built by the Malaga architect José María Santos Rein, which closed its doors in 2004.

The French operator, and the owner of the property, Magna Hotels and Resorts, plan to reopen the hotel in the summer of 2019 after investing some 65 million euros in the project. The project has the go-ahead having obtained the project licences in September; permission for partial demolition since December; and since February, authorisation for works.

The hotel will be characterised by its sports facilities, among which will be pools, tennis courts, golf greens and a large sports area.

The hotel, which sits on a plot of 49,000m² will have 550 rooms, of which 485 will be commercially available. “This is one of the most important projects for the town in recent years. The opening will be a boost for tourism, the economy and local employment”, said Marbella Mayor, Ángeles Muñoz.

New 5-Star Hotel

The reformation of the Don Miguel coincides with the start of work to prepare the area for the W Marbella Resort, a new five-star luxury hotel to be built on the coast in the district of Las Chapas, with an investment of 300 million euros.

The regeneration of the area will last for seven months with an estimated cost of 1.4 million euros, provided by the investment group Platinum Estates. The conditioning work of the dune environment, which is supervised by the association Pro Dunas de Marbella, consists of eliminating invasive species and planting of more native species, demolishing the paved areas and installing a perimeter fence to protect the sand.

After the summer work will begin on the construction of footbridges that allow access to the coast without damaging the dunes. The plan is for the hotel to open its doors in 2021.

 

Average Rental Prices Increased During Q1

Rents increased 1.3% compared to February
Rental prices up 1.3% compared to February

Rents increased 1.3% compared to February

At the close of the first quarter, rental prices had increased by 3.72%, when compared to the close of the previous quarter. This brought the average price to 780 euros. When compared to February, the increase is 1.3%. Compared to the same period in 2017, the increase is 15.56%, according to the latest data from pisos.com.

According to Ferran Font, director of studis at pisos.com, “there is some concern about how this market is currently behaving and its possible consequences in the near future.” Font also admits that “the discussion about whether or not a bubble is being generated is alive at the moment, since there have been strong and rapid increases in the monthly costs, while the profitability generated by rental housing has been reduced.”

Font went on to explain that this situation is reinforcing the “clash of interests” between landlords and tenants: “Many tenants have been displaced from their preferred area by the tourist rental boom. On the other hand, both private investors and large funds continue to focus on an increasingly beneficial business,”

Autonomous Communities

Six autonomous communities have average monthly rental prices of more than €1,000, the highest being in Madrid (€1,325). Next was the Basque Country (€1,096), and the Balearic Islands (€1,030).

The cheapest rental property can be found in Extremadura (€439 p/month), Castilla-La Mancha (€464 p/month) and Galicia (€545 p/month).

During the first quarter, the most significant increase was seen in the Canary Islands where prices went up by 11.19%. The most significant fall was seen in Castilla-La Mancha where prices dropped by 4.67%.

Year-on-year, the biggest increases were in Catalonia (22.19%), Madrid (21.56%) and Navarra (21.24%). Only Castilla-La Mancha saw a negative annual variation with a fall of -0.39%.

Provinces

The most expensive province for rental property was Madrid with an average monthly rental cost of 1,325 euros. They were followed by Guipúzcoa (€1,283 p/month) and Barcelona (€1,076 p/month).

The cheapest province for rental prices was Cuenca with an average price of €383 p/month. Other “cheap” provinces include Teruel (€392 p/month) and Ciudad Real (€392 p/month).

The province with the most significant first quarter increase was Valencia (13.87%), while the one with the largest fall was Cuenca (-9.79%). The largest interannual increase was in Castellón (23.96%). Meanwhile, the largest annual fall was that of Soria (-9.09%).

Provincial Capitals

As for provincial capitals, Barcelona was the most expensive for tenants, with an average rent of 1,701 euros per month. They were followed by Madrid (€1,652 p/month) and Donostia-San Sebastián (€1,352 p/month). Teruel was the cheapest, with an average 387 euros per month. Other economic capitals were Cuenca (€404 p/month) and Ciudad Real (€434 p/month). Ávila showed the biggest quarterly increase (+12.47%), while the the falls were led by Cuenca (-8.21%).

Interannually, Palma de Mallorca led the increases with a rise of 25.29%. Once again, Cuenca was at the foot of the table with an annual fall of -6.96%.

Average Price by No. Bedrooms

The average prices for renting a property in Spain, according to number of bedrooms, are:

  • National Average: 780 €/month
  • 4 Bedrooms: 1,387 €/month
  • 3 Bedrooms: 934 €/month
  • 2 Bedrooms: 850 €/month
  • 1 Bedroom: 748 €/month

 

Housing Sales Up 2.7% in February

Sales of new property increased 2.4%
New housing sales increased 2.4%

Sales of new property increased 2.4%

There were 39,945 housing sales in February, representing an annual increase of 2.7%, according to the latest report from the Council of Notaries.

By type of property, the sale of apartments increased by 6.2%, while sales of single-family homes showed a notable fall of 11.6%, year-on-year.

The increase in sales of apartments was due to both growth in second-hand housing sales (+8.2%) and also for sales of new property (+2.4%).

In terms of average price, a square metre purchased in February cost €1,349, the same cost as in the same period last year. This was due to the increase in the cost of a square metre in apartments (+1.1%) and the fall in the price of single-family homes (-2.6% year-on-year).

The purchase and sale of other types of property stood at 8,575 operations in February, -7.9% year-on-year. Of those, 37.4% correspond to land or plot sales. The average price per square metre of land stood at €233 (+4.7% year-on-year).

Mortgages

The number of new mortgages approved in February was 25,708, which represents an increase of 1.6% year-on-year. This was due to the increase in loans for the purchase of homes (+13%) and the sharp decrease in mortgages for other property types (-22.7%).

The average amount of a new mortgage was €136,898 (+0.4% year-on-year). In the case of housing, the average capital was €129,922, a slight increase of 0.1% year-on-year. For other types of property, the average loan reached €230,469 (+7.6% year-on-year).

New loans for the purpose of construction showed an annual decrease of 13.8% in February, up to 400 operations. The average amount of those loans was €396,296, representing a strong year-on-year decrease of 20.3%. On the other hand, the average amount of a loan for the construction of a house fell by 24.8% to €262,076.

Mortgages to finance business activities experienced a short year-on-year fall of 23.9%, to 240 operations. Furthermore, the average amount of these loans fell by 33.1% year-on-year to €574,459.

Finally, the percentage of home purchases financed by a mortgage in February stood at 47.2%. Additionally, in this type of purchase with financing, the loan amount averaged 76.1% of the property value.

 

4.2 Million Tourists Visited Spain in February

4.2 million tourists visit Spain in February
4.2 million tourists visited Spain in February

The sights of Spain continue to attract millions

4.2 million international tourists visited Spain in February, 2.6% more than in the same month in 2017.

The UK was, as usual, the main source of visitors with 865,316 people heading to Spain from the British Isles. This accounts for 20.5% of the total visitors but also represents 5.9% fewer Brits when compared to February last year.

France and Germany also sent a significant number of visitors to our shores in February. However, we saw a reduction of 8.4% in the number of French visitors, while German visitor numbers increased by 2.8%, when compared to February 2017.

Other emitting countries to show annual growth include Portugal (17.5%), Italy (11.1%) and Ireland (9.9%), according to the latest figures from the INE.

Over the course of the first two months of the year more than 8.3 million tourists visited Spain, an increase of 3.9%.

The main emitting countries over the first two months were the UK (with over 1.7 million tourists, a decrease of 3.1% compared to the same period last year), France (with more than one million tourists, a decrease of 2.2%), and Germany (also more than one million tourists, an increase of 3.5%).

Autonomous Communities

The Canary Islands were the main destination for tourists in February, with 28.2% of the total. They were followed by Catalonia (24.1%) and Andalusia (13.8%).

The Canaries reached close to 1.2 million visitors, 0.7% more than in the previous February. The main emitting countries for those tourists were the UK (with 33% of the total), and Nordic countries (Denmark, Finland, Sweden, Norway, Iceland) with 21.2% of the total.

The number of tourists visiting Catalonia in February increased by 2.8% to exceed one million. Of those, 21.2% came from France.

Andalusia attracted over half a million tourists in February, an annual decrease of 0.3%. The UK was the main source of visitors with 26.7% of the total, followed by France, with 12.1% of the total.

Of the other communities, the number of tourists increased by 7.8% in Comunidad de Madrid, and by 4.6% in Comunitat Valenciana. However, the Balearic Islands saw the number of visitors fall by 6.4%.

The communities that the most tourists visited during the first two months of the year were the Canary Islands (with 2.4 million visitors, similar to February 2017), Catalonia (with 1.9 million visitors, an increase of 2.4%), and Andalusia (with more than 1.1 million and growth of 1.4%).

“Leisure, recreation and holidays” was the main reason for coming to Spain for about 3.5 million tourists in February, which represents annual growth of 2.2%.

“For Business, professional reasons” was the next most popular reason for visiting with 436,771 travellers (26.2% more), while 327,337 cited “Other reasons” (15.1% less) for their visit.

The duration of stay for the more than 2 million of February’s tourists was four to seven nights, an annual increase of 2.1%.

 

Used Housing Prices Up 2.2% in First Quarter

Used property prices increased 2.2% in Q1
Used housing prices increased 2.2% in Q1

Used property prices increased 2.2% in Q1

The price of used housing in Spain increased by 2.2% in the first quarter of the year. This brings the average price of a square metre to 1,621 euros, according to the latest idealista price index. When compared to the same period in 2017, the variation is +7.1%.

Head of idealista studies, Fernando Encinar, says “data seems to confirm the good status of the Spanish real estate market. More than ten years have passed since the bursting of the bubble, and the increase in the number of purchases, the increase in mortgages granted and the sustained growth in prices speak of a recovery that, although at different speeds, is widespread throughout the country.

“There are several factors that, at the moment, do not make us think of a bubble. On the one hand, from the mortgage perspective, the conditions of access to credit have been toughened, the concession of loans at a fixed rate has multiplied and, in addition, the number of mortgages granted is far below the number of purchases. This lack of exposure to risk is one of the main scales when talking about a real estate bubble.

“In terms of sales, the level of operations is still far below that reached at the peak of the bubble and is more related to the creation of new homes and the return of immigration than with speculative operations. And finally, although it is true that prices are growing steadily and generally, they do so at different speeds, which shows that, contrary to what happened during the bubble, not all products or all regions are behaving the same way.”

Autonomous Communities

15 communities saw used housing prices rise during the first quarter. The largest increase was seen in the Balearic Islands, where owners are now asking 5.5% more than they were three months ago. Madrid saw prices rise by 5.1%, while in La Rioja the increase was 3.3%. Also showing positive variations were the Canary Islands (3.1%), Catalonia (3.1%), and Andalucía (2%).

Communities to see prices fall include Euskadi (-0.4%), and Extremadura (-0.1%).

After increases in Q1, Madrid is now the most expensive community, with an average cost of 2,673 euros/m². The Balearic Islands have a similar average with 2,609 euros/m². In Catalonia an average square metre will cost 2,146 euros.

The cheapest communities include Castilla La Mancha (913 euros/m²), Extremadura (931 euros/m²) and Murcia (1,023 euros/m²).

Provinces

43 provinces saw used housing prices rise in Q1. The increases are also led by the Balearic Islands (5.5%), followed by Lleida (5.3%), Madrid (5.1%), Santa Cruz de Tenerife (4.4%) and Barcelona (4.2%).

We see price falls in Lugo (-1.1%), Guipúzcoa (-0.9%) and Vizcaya (-0.7%).

The ranking of the most expensive used housing by province is still headed by Guipúzcoa, with 2,734 euros/m², followed by Madrid (2,673 euros/m²). Following them are Barcelona (2,650 euros/m²) and the Balearic Islands (2,609 euros/m²). Toledo is the most economical province (793 euros/m²), followed by Ávila (822 euros/m²) and Ciudad Real (856 euros/m²).

Capitals

Madrid leads the increases among Spanish capitals, with an increase of 7.8%. They are followed by Granada, where prices increased by 5.6%. In Logroño prices increased 5.2%. Prices in Malaga increased by 5%, while in Palma prices increased by 4.8%, and 4.5% in Valencia.

The biggest fall was in Oviedo (-0.5%). It was followed by the decreases of Badajoz (-0.4%), Córdoba (-0.3%), Bilbao (-0.3%) and Lugo (-0.1%). In the cities of Castellón and Huelva prices did not move.

Barcelona is the most expensive Spanish capital (4,334 euros/m²), followed by San Sebastián (4,144 euros/m²), Madrid (3,540 euros/m²) and Bilbao (2,863 euros/m²). At the opposite end of the table we find Ávila, the cheapest capital, with an average price of 954 euros/m².