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

Sales of New Homes Increased in January

Sales of New Homes Increased in January
Sales of New Homes Increased in January

Sales of new homes increased by 11.2%

The total number of property sales/purchases in the property registers in January was 198,298, 10.6% more than in the same month of 2018, according to data from the INE.

85.7% of purchases registered in January correspond to urban property, and 14.3% rural. In the case of urban properties, 56.5% were home sales.

The number of rural property sales increased by 2% in January, while urban property sales increased 3.8%. Within urban, home sales recorded a decrease of 0.2%.

19.4% of homes purchased in January were new, with the remaining 80.6% being second-hand properties.

The number of new homes sold increased by 11.2%. Meanwhile, the number of used properties sold decreased by 2.6%, when compared to January 2018.

Results by Autonomous Community

In January, the total number of transferred properties in the registers per 100,000 inhabitants reached its highest values in La Rioja (1,083), Castilla-La Mancha (747) and Castilla y León (703).

La Rioja (30.2%), Murcia (27.2%) and Cataluña (26.6%) recorded the highest annual variation rates.

At the other end of the table, Cantabria (-11.8%), Asturias (-10.1%) and Aragón (-4.8%) have the lowest annual variations.

Looking only at the sale of housing, the communities with the highest number of transmissions per 100,000 inhabitants are Valencia (185), La Rioja (154) and the Balearic Islands (151).

The communities with the highest annual variations in the number of home sales in January are Extremadura (36.9%), Galicia (17.5%) and Aragón (16.9%).

Meanwhile, the Canary Islands (-22.4%), Asturias (-18.0%) and the Balearic Islands (-13.7%) registered the lowest annual variation rates in January.

In Andalucia, there were 8,939 home sales in January, representing a fall of -1,6%.

 

Property Prices Up 2.6% in January

The average home loan in January was €135,616
The average home loan in January was €135,616

The average home loan in January was €135,616

Purchases and sales of homes reached 40,388 transactions in January, a slight year-on-year increase of 0.3%, according to the General Council of Notaries.

By type of housing, the sale of apartments showed a year-on-year fall of 1.3%. Meanwhile, transactions for second-hand homes fell by 1.5%, while sales of new property increased by 0.1%. The sale of single-family homes showed an increase of 6.6% year-on-year.

Looking at prices, the average price of a square metre sold in January was €1,424, reflecting a slight increase of 2.6% year-on-year. This increase was due to both the increase in the prices of single-family homes (4.1%) and also that of flats (2.7%).

Of all the sales in January 36.3% corresponded to land or plots. The average price for these transactions was €221 p/m².

Mortgages

The number of new mortgage loans taken in January was 26,922, representing an increase of 3.7% year-on-year. The average amount of those loans was €171,047, reflecting a slight fall of 0.6% year-on-year.

New mortgage loans taken for the acquisition of property increased in January by 5.6% year-on-year (20,730 loans). This was due in part to the increase in loans for the purchase of a home (6.1%), and the decrease in the number of loans taken for the acquisition of other types of property (-1.5%). The average amount borrowed for all new loans was €141,772 (-0.3% year-on-year).

In the case of housing, the average capital borrowed was €135,616, a slight annual increase of 0.9%. For loans taken for the purchase of other types of property, the average loan was €230,028 (-7.1% year-on-year).

New mortgage loans taken for the purpose of construction showed an annual drop of 9.1% in January, to 464 operations. The average amount of those loans was €565,334, reflecting an annual increase of 22.3%. Meanwhile, the average amount of loans taken for the construction of a home increased by 99.6% to €438,598 (371 operations).

Finally, in the case of home purchases, 48% of transactions in January required financing. In those cases, the average mortgage-to-value rate was 74.7%.

 

2018 Home Sales Figures Highest in 11 Years

Home sales increased 9.3% in 2018
Home sales increased 9.3% in 2018

Home sales increased 9.3% in 2018

The number of home sales seen in 2018 was the highest number since 2007.

According to Fomento, 581,793 homes were sold, a 9.3% increase compared to 2017. However, despite the most positive data in 11 years, the increase was the lowest since the end of the crisis confirming a slowdown in the residential market. The number of transactions only increased in 15 provinces, with the Canary Islands and the Balearic Islands both suffering a drop in sales.

The market for second-hand homes returned to the top, with 90.3% of the total sales. This reflects an increase of more than 9% on the previous year. There were 525,379 second-hand property sales, the highest number since 2006, when there were 545,000 sales.

The sale of new housing increased for the second consecutive year, to see 56,414 transactions, an increase of 11.9% year-on-year. However, new property sales are still 86% lower than in the boom years.

Results by Province

As mentioned, the Spanish archipelagos were the ones to suffer losses in 2018. The largest falls registered were the Balearic Islands (-5.1%), Las Palmas (-2.8%) and Santa Cruz de Tenerife (-2.1%). The largest increases in home sales were seen in Huelva (28.1%), La Rioja (24.4%), Segovia (23.2%), Seville (21.1%) and Guadalajara (20.4%).

Transactions in Madrid rose by 5.7% year-on-year, while in Barcelona they grew with a slight increase of 2.6%. Valencia (13.4%) also saw a double-digit increase.

Looking at sales volume, Madrid accounted for 14.6% of sales, while Barcelona took 10.4%. Meanwhile, Alicante accounted for 7.6% of total sales. These represent sales figures of 85,169 in Madrid, 60,602 in Barcelona and 44,050 in Alicante.

“The national data shows moderate growth that shows the health of the Spanish property market. It seems that the normalisation process has already reached most of the country and that those communities where rates have been growing slowly are now seeing double-digit increases. Meanwhile, the islands have begun to show signs of stabilising prices or have fallen during 2018. In the case of Madrid and Catalonia, the increase in population is pushing prices upwards. While local politicians continue to ignore this migration, the prices of home in those markets will continue to grow given the scarce replenishment of the supply.”, says Fernadno Encinar, head of studies at idealista.

 

New Rental Decree Good For Tenants

Contracts will now default to 5 years
New rental decree introduced in Spain

Contracts now have a minimum term of 5 years

The Spanish Government have approved the new rental decree, following the failed attempt which was overturned by Congress in December.

The decree went into effect on Wednesday, five days after receiving cabinet approval. At a time when affordable rental properties are becoming scarce, the decree from Pedro Sánchez’s government aims to add protection for tenants and to limit down payments and rent increases.

Furthermore, the new rules extend the default duration of a rental contract from three to five years (in cases when the landlord is a business this is extended to seven years) and ties annual rental increases to the consumer price index (CPI). Although it was previously discussed, there will not be a limit on how much monthly rent a landlord can demand.

The decree was described as an “action plan for an unacceptable situation“, by Deputy Prime Minister Carmen Calvo, who also said it will be especially good for younger people.

As is always the case with new decrees, this one will need to be ratified by congress within a month. However, because an election has been called for April 28th, parliament has been dissolved so the ratification will fall to a permanent congressional committee. It is not likely to suffer the fate of the previous decree having already received support from Podemos and the Catalan nationalist party (PdeCAT) and the Basque Nationalist Party (PNV).

Here is a summary of the main points of the decree:

Contract Length

The minimum length of a new contract has been extended from three to five years. Also, to grant more stability to tenants, the silent renewal has been extended from one to three years. Notice of contract termination has also changed in the tenants’ favour. Landlords must now give four months notice to end a contract while tenants only need to provide two months notice.

Rent Tied to CPI

Previously there was no limit on how much a landlord could increase the rent annually. The new decree will now limit annual increases to the consumer price index (CPI) within the contract period.

Price Benchmark

Although not limiting rental costs, the decree includes the provision of a new rental index. This will be used to follow changes in the market and help advise tenants whether the monthly rental is in line with current rates. This index will show the average price in any part of the country and will be reviewed annually. The first figures are expected to take around eight months to prepare.

Limit on Initial Costs

In addition to a one-month deposit, landlords can only ask the tenant for additional guarantees equivalent to two months rent. The landlord must also now cover all real estate agency expenses. This is a good point and one I have always thought was missing. Why would I pay an agent a months rent just to open a door for me? They work for the landlord, not for me.

Evictions

Evictions will have to go through the social services first to be sure the tenant is not a vulnerable person. If they are found to be, the eviction will be suspended for one month (three months when the landlord is a business) to help the tenant make arrangements for alternative housing. Judges must also now divulge the exact date and time that an eviction is to take place.

Holiday Rentals

Owners of property within a community may now collectively agree to limit the number of units which can be used for tourist rentals with only three fifths of the vote. Previously, votes needed to be unanimous among owners.

ITP Eliminated

The payment of the ITP tax by the tenant has been eliminated. Nobody paid it anyway as very few people had even heard of it!

Rental costs have increased rapidly over the last three years only slowing down in the last 3 to 6 months. Prices were beginning to get a bit silly and many people were simply priced out of the market. The new decree will hopefully bring some sense back into a market on which many hundreds of thousands of people rely being unable to afford to buy a property.

However, Fernadno Encinar, head of studies at idealista, is more cautious saying “the Government’s new attempt to regulate the rental market makes the same basic error as the decree approved in December that was overthrown by Congress a month later. Instead of approving effective measures that seek to moderate prices, it instead regulates what owners have to do. Many of them may now be tempted to take their homes off the market and this is the opposite of what the decree was meant to do. Discrimination of owners can reduce supply and further increase prices.”

 

Number of Tourists Increase in January

Tourism increased again in January
Catalonia attracted 21.7% of international tourists

Catalonia attracted 21.7% of foreign visitors

Spain received 4.2 million international tourists in January, 2.2% more than in the same month of the previous year.

The UK was the main source of tourists, with 807,347 travellers visiting Spain in January. This represents 19.2% of the total tourists and is an annual increase of 1%, according to data from the INE.

German and French tourists were the next largest groups. Germans accounted for 515,989 visitors (2.7% more year-on-year), while French tourists amounted to 446,307 (8.7% less than last year).

Among other notable countries of residence, it is worth mentioning the annual growth of tourists from the USA (25.5%), Portugal (21.7%) and Ireland (10.8%).

Destination by Autonomous Community

The Canary Islands were the most popular destination for international tourists in January, taking 27.6% of the total. This is followed by Catalonia (21.7%) and Madrid (13.9%).

Around 1.2 million tourists visited the Canary Islands in January, 2.1% less than in the previous year. The main country of residence for those visitors was the UK (with 32.3% of the total), followed by Germany (20.4%).

The number of tourists visiting Catalonia increased by 5.3% to stand at 910,779. 19.4% came from France and 17.3% from the rest of the world.

Madrid saw 584,387 international tourists in January, an annual increase of 9%.

In other communities, the number of international visitors increased by 18.8% in the Balearic Islands and by 6.6% in Andalucía. On the other hand, numbers dropped by 8% in Valencia.

Tourist Spend

January’s international visitors spent a total of 4,689 million euros, an increase of 3.6% when compared to the same month in the previous year.

The average expenditure per tourist reached 1,117 euros, an annual increase of 1.4%. Average daily expenditure reached 138 euros, an increase of 5%, the INE says.

The average duration of stay for international visitors in January was 8.1 days, which represents an annual fall of 0.3 days.

The main emitting countries, in terms of expenditure levels, were the UK (with 17.3% of the total spend), followed by Germany (11.7%), and the Nordic countries (Denmark, Finland, Norway and Sweden) with 10.1%.

The spend from UK tourists increased by 7.9%, while that of German visitors grew by 1.2%. On the other hand, spending by Nordic tourists decreased by 13.1%.

Autonomous Community Destinations by Spend

The main destinations with the greatest weight in tourist spending in January were the Canary Islands (with 31.2% of the total), Catalonia (20.1%) and Madrid (16.5%).

Tourist spending increased by 1.3% on the annual rate in the Canary Islands, 4.5% in Catalonia and 19.8% in Madrid.