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

Property Sales Up Slightly in May

Brits made up 14.75% of foreign sales
Andalusia saw 9,100 home sales in May

Andalusia saw 9,100 home sales in May

There were 191,875 property transfers in May, which is 4.4% higher than in the same month last year. This is according to the latest data from the INE.

In the case sales of properties in the property registers, there were 96,186, an annual increase of 3.1%.

85.9% of the sales in May correspond to urban property, and 14.1% to rural. In the case of urban properties, 57.6% were housing sales.

The number of rural property sales increased by 6% in May, on the annual rate, and that of urban properties by 2.6%. Within urban sales, home sales recorded an annual increase of 1.1%.

Results by Autonomous Communities

In May, the total number of property sales in the property registers per 100,000 inhabitants reached its highest values in La Rioja (827), Castilla y León (817) and Aragón (717).

Catalonia (28.2%), Extremadura (19.0%) and the Principality of Asturias (17.5%) registered the highest annual variation rates.

On the other hand, Murcia (-15.2%), La Rioja (-8.5%) and Navarra (-8.3%) saw the lowest annual rates.

Looking at the sale of registered homes, the communities with the highest number of sales per 100,000 inhabitants were Valencia (193), Balearic Islands (161) and La Rioja (141).

The communities that saw the largest annual increases in the number of purchases of homes were Asturias (41.0%), Cantabria (19.6%) and Castilla y León (14.1%).

Navarra (-17.7%), La Rioja (-15.0%) and the Canary Islands (-11.2%) registered the most negative annual variation rates in May.

In Andalusia there was 9,100 home sales in May. This represents a slight fall of -1.7% when compared to May in 2018.

 

Average Mortgage Value Increased in April

Average Mortgages Value Increased in April
Average Mortgages Value Increased in April

Interest rates fell 5.1% in April

The number of new mortgages taken on homes in April was 29,032, which is 0.1% less than in April 2018. The average amount of the loans was 124,655 euros, an annual increase of 0.7%, according to data from the INE.

The total capital loaned on properties in April reached 5,325.6 million euros, a 2.6% fall when compared to the previous April. For housing, the total capital borrowed was 3,619 million euros, a slight increase of 0.6%.

Interest Rates

For all mortgages taken in April, the average interest rate at the start of the loan term was 2.51% (5.1% lower than in April 2018) and the average loan term was 23 years. 58.7% of mortgages began on a variable rate, with 41.3% at a fixed rate.

The average interest rate at the start of the term for variable rate mortgages was 2.23% (6.4% lower than in April 2018). On fixed rate loans the average rate at the start was 3.07% (4.8% lower than last year).

Looking only at mortgages taken for the acquisition of a home, the average interest rate was 2.59% (2.9% lower than last April) and the average loan term was 24 years. 56.8% of new home mortgages taken in April were on a variable rate, and 43.2% on a fixed rate. The number of fixed rate loans increased by 6.7% year-on-year.

The average interest rate at the start of the loan term for home mortgages on a variable rate was 2.3% (a decrease of 5.1%), and 3.09% for fixed rate mortgages (1.8% lower).

Results by Autonomous Community

The community with the largest number of new mortgages taken in April was Andalusia (6,065). Madrid and Catalonia were next with 5,380 and 4,636 new loans, respectively.

The community to see the most capital loaned for a home purchase was Madrid where 936 million euros were borrowed in April. Andalusia and Catalonia were next with 676.2 million and 657 million euros, respectively.

The highest annual variation rates in the total capital loaned was seen in Navarra with a 59.4% increase. Andalusia and Aragon were next with increases of 26.8% and 26%, respectively.

The highest annual increase in the number of new mortgages taken for purchasing a home was seen in Navarra (47.4%), while in Andalusia there was a 16.7% increase and a rise of 15.1% in Rioja.

On the other hand, the communities that saw the largest negative variations were Murcia (-25.8%), the Balearic Islands (-22.4%) and Madrid (-10.3%).

 

Cost of Renting Increased in April

Renting is 0.8% more expensive in Spain since May
Renting is 0.8% more expensive in Spain since May

Renting is 0.8% more expensive since May

In April, the cost of renting a home in Spain registered a monthly increase of 0.8% to put the average cost per square metre at 8.54 euros per month. This price returns us to figures similar to those seen in December 2009, when the price stood at 8.55 euros/m² per month.

Looking at the annual variation, the price of renting a property in Spain increased by 1.2%, one of the softest increases over recent months, except for August 2018 and January 2019 when the year-on-year variations registered slight decreases. Specifically in the month of August 2018 the price fell by -2.2% and in the month of January 2019 by -0.7%.

The average rental price continues to grow, but at a much more moderate pace than we have become used to recently. Additionally, it is recognised that the evolution of prices is very different according to the area. In some autonomous communities there have already been significant falls, while in others such as Madrid or Valencia they continue to see large increases,” exlained Beatriz Toribio, Director of Studies of Fotocasa.

Since reaching the maximum price in May 2007 (€10.12 /m² per month) the price of rental housing has accumulated a fall of -15.6%.

13 Communities See Increases

Looking at the prices by autonomous communities, 13  saw the cost of renting increase in May. The community that saw the largest inrease was Murcia where rental costs increased 5%. La Rioja saw prices rise 4.9%, while both Navarra and the Balearic Islands saw rises of 2.8%. Renting in the Canary Islands grew more expensive by 2.5%.

Three communities saw prices fall in May. The community where rental costs declined the most was Madrid (-1.9%) while the smallest drop was seen in Castilla y León, with a fall of -0.2%.

The price of renting in Andalucia increased by 0.9% in May.

In terms of price ranking, Madrid is the most expensive community in which to rent a second-hand home, with an average price per square metre of 13.43 euros / month. On the opposite side, Extremadura and La Rioja are the two cheapest communities for rental property with average prices of 4.31 euros/m² per month and 4.95 euros/m² per month, respectively.

Looking at the provinces, 31 of them recorded monthly increases in rental costs compared to the previous month. The increases ranged from 6% in Girona to 0.1% in both Badajoz and Cuenca. Meanwhile, rental costs registered negative monthly variations in 14 provinces. Those falls ranged from -0.1% in Cádiz to -3.3% in Lugo.

 

High Net Worth Investors Flocking to Malaga

Beautiful Málaga, popular with buyers and tourists
Beautiful Malaga, popular with buyers and tourists

Malaga – popular with buyers and tourists

Malaga, the capital of the Costa del Sol, has edged its way into the list of the most desirable places to buy a house. Thanks to its climate, museums, culture and accessibility, the city has become a magnet for investors and homeowners.

Home buyers in Malaga are both national and international. British, Scandinavian, Belgian and Germans frequently top the list of buyers. INE data suggests the city accounted for almost 7% of new home sales in Spain in the last five years. In the first quarter of this year it has accounted for 28% of purchases by foreign buyers.

It is primarily the coastal location and proximity to other popular areas like Marbella and Granada that has generated such demand, especially in the center and east of the city. For example, an Israeli group has acquired twelve buildings in recent months in the center of the city. Also, a Swedish investor is launching a residential development project in the Limonar district in the east of the city. Ministry of Development data shows that the number of houses sold to international buyers in Malaga has been on the increase since 2011.

Malaga, much like Marbella, attracts high net worth investors as it offers the infrastructure demanded buy this type of buyer. For example, Malaga airport accepts private jets while Puerto Banús has a berthing dock for yachts.

More Popular Than Monte Carlo

Consultancy firm Wealth-X conducted a survey of around 210,000 investors with a net worth of more than 30 million euros which concluded that around 15% had invested in Spanish properties, mostly in the Marbella area, surpassed only by another Mediterranean paradise for the very wealthy, Saint-Tropez (France). However, it remained ahead of other areas including Monte Carlo (Monaco) and Porto Cervo (Italy).

The luxury property market of homes worth more than 1 million euros is growing 2% above the national average. This is mainly due to Russian and Asian investors. The prices of houses sold in Malaga clearly exceed the national average in some cases by more than 50%. This data from the Ministry of Development confirms that Malaga is attracting more high-end buyers. It even surpassed Barcelona and Madrid at the end of 2018.

The typical profile of new buyers in Malaga is that of a couple over 55 years old. They are looking for a penthouse in the historic center of the city or the eastern district of La Malagueta. The primary reason for the purchase is for use as a holiday home. The fact that Malaga has become fashionable as an urban tourist destination significantly influences the decision to buy there. Malaga now competes with the main European cities such as Paris or London in the second-home market and is gaining popularity.

With many new developments in the areas around Malaga and an abundance of second-hand property for sale, the Costa del Sol is likely to remain popular for both tourists and property buyers alike. Marbella property continues to be popular with luxury urbanisations including El Madroñal and the exclusive La Zagaleta attracting those with extreme wealth from state leaders to A-List actors and musicians.

 

6.4 Years Salary to Buy a Home in Spain

The cost of living in Spain grew 1% in 2018
6.4 years of monthly salary to buy a home in Spain

The cost of living in Spain grew 1% in 2018

The cost of living in Spain continues to grow as seen in the change in the annual CPI which, in 2018, grew by 1%. And when it comes to housing, the variation followed the same trend. According to a report from Fotocasa and InfoJobs, in December 2018 the average cost of rental housing in Spain was 8.30 euros/m², up from 8.15 euros/m² in December 2017. Taking into account the average gross salary in Spain registered on InfoJobs, which was 23,478 euros in 2018 (1,965.5 euros monthly), workers in Spain require 33.9% of their monthly payroll to pay their rent (on a property of 80m²).

In the last two years, the proportion of monthly salary allocated for rent has grown 2.9 points. Thus, in 2016 people had to allocate 31% of their monthly salary for rent, while in 2017 this had risen to 33.5%. This is because over the last 2 years, the average price per square metre of rental property has increased 11%, while wages have grown only 1%.

The study from Fotocasa reveals year after year that in Spain we have an important problem of access to the housing market, both in buying and renting, for the bulk of the population. And one of the main factors is that the price of housing has risen much more sharply than the purchasing power of workers in Spain,” explained Beatriz Toribio, director of studies at Fotocasa.

Judith Monmany, head of communications at InfoJobs, added that “despite the fact that employment levels are recovering, wages are barely moving. According to the data recorded by InfoJobs, the average salary in 2018 increased only 0.6% with respect to the previous year, very similar to the increase in 2017 (+0.7%). This increase is not enough to increase purchasing power since the CPI has grown by more.

Madrileños and Catalans Pay More of their Salary for rent

As always, the data shows large differences between the autonomous communities. Madrid (13.16 euros/m²) and Catalonia (12.16 euros/m²) pay the most for rental property. The people of Madrid therefore allocate on average 51.1% of their gross monthly income to pay rent. This figure takes into account the average gross salary in the Community of Madrid in 2018 was (24,713 euros per year), and the average price of an 80m² property (1,052.7 euros/month). This community has also seen the largest increase in rental prices; up 14.9% since December 2017, while salaries have not moved.

In Catalonia, falling to second position in 2018, the average rental price is 972.9 euros per month for a property of 80m². With an average salary in the community of 23,727 euros, the population of Catalonia requires 49.2% of their monthly salary to pay their rent.

Average rental costs in Catalonia are followed by The Basque Country (10.22 euros/m²) Balearic Islands (9.78 euros/m²). In both, residents must allocate more than 40% of their gross monthly salary for rental payments.

In Andalucia, with an average rental cost of 6.73 euros/m², and an average monthly salary of 1,869.05 euros, residents require 28.8% of their monthly salary to pay for rental property.

Cheaper regions include Extremadura with an average monthly rent of 341.35 euros per month (for 80m²), and an average salary of 1,873.12 euros per month, meaning 18.2% of salary is required for rent. Castilla-La Mancha and La Rioja are next, both with an average rental cost of 4.87 euros/m². In these communities the proportion of monthly salary required for rent is 21.5% and 21.2%, respectively, more than 10 points below the average.

6.4 Years’ Salary to buy a home

The average price of a second-hand home in Spain in December 2018 was 1,869 euros/m², an increase of 7.8% when compared to December 2017. This means that, taking into account the average gross salary in 2018 (23,478 euros per year), people in Spain would take 6.4 years to pay for a home, when using their full annual gross salary.

In the last two years this has grown from 5.7. Again, the increase is due to higher growth in prices (13%) than in wages (1%).

The price of rental housing in Spain has experienced a positive increase recently. But greater still is the growth in the price of housing for sale, which has increased by 7.8% over 2017. However, when looking at the gross salary of Spanish workers in 2018, we see that it only grew 0.6% compared to the previous year,” explained Beatriz Toribio.

As such, we see the effort required to either rent or buy a home is even greater than at the end of 2017. The fact that both the price of purchasing or renting has become more expensive at a faster rate than purchasing power has increased make entering the housing market tougher in Spain.

On the other hand, people in Extremadura, where the average price of property for sale is 1,111 euros/m², require only 4 years to pay for a house of 80m². In Murcia (1,136 euros/m²), it takes 4.2 years’ salary to pay for a house.