Residential market in Spain

Transcription

1 Residential market in Spain SERVIHABITAT TRENDS Executive Summary Second half of 2017

2 The Spanish residential market has experienced a clear consolidation in 2017, as proven by the variables of the sector. This trend towards recovery will be maintained in 2018, with a greater increase of the main indicators. Even so, the different micro-markets should be analyzed to determine the trend of the entire market, according to the evolution of each of its areas. 2 COMMITMENT, TEAMWORK AND LEADERSHIP

3 1/ PRODUCTION Housing starts E 2018F +17.1% +22% 65,592 76,804 93,676 Completed housing E 2018F GALICIA 33.3% COMMUNITY OF MADRID 18.3% HOUSING STARTS E year-on-year variation rate ASTURIAS -15.4% CANTABRIA 26.7% CASTILLA Y LEÓN 22.4% BASQUE COUNTRY 6.0% ARAGON 7.1% LA RIOJA 10.3% NAVARRE 24.7% CATALONIA 16.5% BALEARIC ISLANDS 0.6% CASTILLA-LA MANCHA 40,384 51,284 61,363 Note: E (estimate), F (forecast) +27% +19.7% The following trends can be discerned from this development setting: EXTREMADURA 41.3% 17.0% ANDALUSIA 31.6% COMMUNITY OF VALENCIA 6.6% REGION OF MURCIA 10.3% > The most vibrant markets are population centers with more than 150, ,000 inhabitants and their metropolitan areas, especially Madrid and Barcelona. The holiday homes market continues growing in the most traditional areas, such as Costa del Sol, the Balearic and Canary Islands and certain localities on the coast of Alicante and the Catalonian coast. > An increase has been detected in traditional private developer activity and large investors. > Absorption of stock in locations with the highest housing accumulations continues slowly, resulting in nearly non-existent developing activity in these areas. CANARY ISLANDS 25.6% CEUTA AND MELILLA Data not available Source: Servihabitat and Real Estate Chair of the IPE Note: E (estimate) Communities with a year-on-year variation rate higher than the Spanish average Communities with a year-on-year variation rate lower than the Spanish average 3 COMMITMENT, TEAMWORK AND LEADERSHIP

4 2/ STOCK New construction stock E 2018F NEW CONSTRUCTION STOCK Stock in 2017 per 10,000 inhabitants 394,000 Note: E (estimate), F (forecast) -26.3% -16.3% 290, ,106 The Spanish average of new construction stock is 62.4 homes per 10,000 people Technical stock has been detected in the Balearic Islands, Madrid, large areas of Catalonia and the main provincial capitals. COMMUNITY OF MADRID 3.1 GALICIA 85.7 EXTREMADURA 8.1 ASTURIAS 90.1 CASTILLA Y LEÓN CANTABRIA 77.3 CASTILLA-LA MANCHA ANDALUSIA BASQUE COUNTRY 21.6 ARAGON 87.2 LA RIOJA NAVARRE BALEARIC ISLANDS COMMUNITY OF VALENCIA REGION OF MURCIA CATALONIA 12.4 CANARY ISLANDS 14.6 CEUTA AND MELILLA Data not available Communities with a stock per 10,000 inhabitants higher than the Spanish average Source: Spanish National Institute of Statistics, Servihabitat and Real Estate Chair of the IPE 4 COMMITMENT, TEAMWORK AND LEADERSHIP

5 3/ RESIDENTIAL TRANSACTIONS AND OPERATIONS Homes sold ,430 Note: E (estimate), F (forecast) Factors that contribute to boosting demand: > Lower unemployment rates that are generating greater solvent demand that can cover access to home purchases. > Financial entities, which continue their policies of granting larger numbers of mortgages. > Investment demand, in which large and small investors remain very active, and a very dynamic rental market that generates higher profit than other alternative investments. > New construction development that continues its upward trend. Although not yet perceptible in sales figures (projects started in the last 18 or 24 months are still pending notarization), the volume of housing starts continues growing, meeting a stagnated demand in search of this type of product. Time to sell +16.9% FIRST HOMES Stable around 7 months 2017E +18.3% 2018F 472, ,287 HOLIDAY HOMES Has decreased down to 8 months GALICIA 16.4% COMMUNITY OF MADRID 21.8% EXTREMADURA 13.1% CANARY ISLANDS 12.5% ASTURIAS 21.4% CASTILLA Y LEÓN 15.0% CEUTA AND MELILLA 6.7% Source: Servihabitat and Real Estate Chair of the IPE Note: E (estimate) RESIDENTIAL TRANSACTIONS E year-on-year variation rate CANTABRIA 13.0% CASTILLA-LA MANCHA 23.8% ANDALUSIA 13.1% BASQUE COUNTRY 14.9% ARAGON 15.8% LA RIOJA 23.1% NAVARRE 17.4% CATALONIA 18.9% BALEARIC ISLANDS 19.4% COMMUNITY OF VALENCIA 18.1% REGION OF MURCIA 10.9% Communities with a higher variation rate than the Spanish average Communities with a lower variation rate than the Spanish average 5 COMMITMENT, TEAMWORK AND LEADERSHIP

6 4/ PRICES Housing prices will increase by 4.5% in 2017 and 4.7% in 2018 GALICIA 2.1% EVOLUTION OF PRICES BY COMMUNITIES E year-on-year variation rate ASTURIAS 1.1% CANTABRIA 3.0% BASQUE COUNTRY 5.2% LA RIOJA 2.4% NAVARRE 3.3% The Community of Madrid and Catalonia are the two markets that drive the increase in prices and lead construction recovery. CASTILLA Y LEÓN 1.4% ARAGON CATALONIA 7.0% In the Balearic Islands, prices are also higher than average, although the percentages of production year-on-year growth are lower than the average in Spain. COMMUNITY OF MADRID 7.5% 3.1% BALEARIC ISLANDS 5.6% In the rest of the autonomous communities, price increases are lower than the average, although the rhythms of production growth vary, depending on the case. EXTREMADURA 2.2% CASTILLA-LA MANCHA 2.1% COMMUNITY OF VALENCIA 2.4% ANDALUSIA 3.0% REGION OF MURCIA 2.3% CANARY ISLANDS 5.1% CEUTA AND MELILLA Data not available Communities with a year-on-year variation rate higher than the Spanish average Source: Servihabitat and Real Estate Chair of the IPE Note: E (estimate) 6 COMMITMENT, TEAMWORK AND LEADERSHIP

7 5/ RENTAL MARKET Source: Eurostat 22.2% of the Spanish population lives in rental homes 17.3% of the households living in rental homes in Spain make some kind of payment for their home The average rental offer in Spain is 2.5 homes per 1,000 people and 5.3 per 1,000 households 100% 80% EVOLUTION OF THE RENTAL MARKET COMPARED TO RESIDENTIAL TRANSACTIONS 13.8% of the population pays a market price rent in Spain On average, a home takes over one month and a half to be rented in Spain 60% 40% 20% For around 10% of the APIs, half of their customers are foreigners Almost 70% of tenants are between 26 and 35 years old 0% THE NUMBER OF TRANSACTIONS WILL DECREASE Source: Servihabitat SEPT 2015 SEPT 2016 SEPT 2017 IT WILL REMAIN STABLE WITH RESPECT TO RESIDENTIAL TRANSACTIONS THE NUMBER OF TRANSACTIONS WILL INCREASE The average rental price in Spain for an sqm home is 620 The average gross profitability in Spain for a rental home is 5.5% 7 COMMITMENT, TEAMWORK AND LEADERSHIP

8 6/ FOREIGN BUYERS Foreign buyers have made up 16.8% of the total housing transactions in Spain during the first and second quarters of 2017 OPERATIONS BY FOREIGNERS VERSUS TOTAL RESIDENTIAL TRANSACTIONS PER PROVINCES IN 2017 (until 2nd quarter) 83,675 homes purchased by foreigners in the first and second quarters of 2017 (+10%) 3,484 non-residents TARRAGONA 17.6% CASTELLÓN 18.2% GIRONA 32.0% 80,191 residents ALICANTE 48.8% BALEARIC ISLANDS 35.2% MURCIA 25.1% 87.3% of the purchases made by foreign non-residents is concentrated in only seven provinces. British is the top nationality among foreign buyers in Spain, although their weight has decreased, followed by French, German, Swedish and Belgian. SANTA CRUZ DE TENERIFE 45.5% MÁLAGA 34.8% ALMERÍA 21.7% Provinces with a foreign purchase percentage versus total operations higher than Spanish average LAS PALMAS 32.4% Source: Ministry of Public Works and own sources 8 COMMITMENT, TEAMWORK AND LEADERSHIP

9 BARCELONA C/ Provençals, Barcelona MADRID Avda. de Burgos, Madrid Telf: (+34) contactocorporativo@servihabitat.com PRD 2016/0005 NOTICE: This is an informative document containing provisions and estimates that may be subject to change without prior notification. Servihabitat is not liable for the use by third parties of the information contained in this document.