Malaga and Alicante attracted nearly half of purchases by foreign residents

The sale of homes totalled 70,196 operations in the third quarter, 6.8% less than in the same period of 2012 according to the Ministry of Development, showing that home ownership by foreigners grew by 24 7% to 10,960 transactions, 15.6 % of the total. Home sales fell as in respect to the second quarter when they decreased by 4.2%, although away from the crash this suffered 21.5% in the first three months of the year .

However the data from Formento shows in the last twelve months between October 2012 and September 2013 sales transactions were 341,104, which is  1.4% more than in the previous twelve months. Alicante and Malaga distributed nearly half of purchases by foreign residentes, 13,918 transactions were for new housing which is 19.8% of the total, while the resale market totalled 56,278 , 80.2 %.

In the case of private housing, operations amounted to 66,477 between July and September this year, 94.7% of the total, while 5.3% or 3,179 transactions were for housing.

Half of foreign property buyers purchase in areas like Marbella in Malaga and Alicante

By region in the last 12 months nine of them have had increased sales, while the remaining eight and the autonomous cities of Ceuta and Melilla have produced falls in property sales. Notable increases were in Murcia ( +14.3 % ), Aragon (+9.4 %) and Catalonia ( +7.6 %) , compared with declines of Cantabria ( -17.3 %) , Basque Country (- 15.3%) and Castilla -La Mancha (-14.6 % ), respectively. The purchases made by foreign residents in Spain experienced an annual growth of 24.7 % over the third quarter of 2012 , with 10,960 operations.

Together, the purchases made by foreign – resident and non – residents accounted for 12,070 transactions , 17.2% of the total , which is a record since 2006. By provinces of which recorded the highest number of sales by foreign residents accounted for Alicante ( 3,158 operations ), Malaga ( 1552 ), Barcelona ( 889 ) , Girona ( 758 ) and Tenerife ( 705) . Only foreign demand activity in the housing market ” remains in the doldrums .” According to Beatriz Toribio of Fotocasa, “now they’re again buying property in Spain foreign investors are seeking good opportunities in this time of low prices “. ” May we continue in positive figures, the pull of foreign demand is good because it came from many years of sluggishness ,” but ” should not lead to euphoria because the sector will recover only thanks to foreign demand,” says Toribio.



Depreciation on Spanish Foreclosed Homes Reached 63%

Moody’s credit rating agency indicated recently that the accumulated depreciation on foreclosed homes in Spain since the beginning of the crisis has reached an average of 63%. This percentage is well above the 41% average decline registered, according to the National Statistics Institute, in housing prices between the first quarter of 2007 and the second quarter of 2013.

The rating agency stated that the largest price declines registered, related to sales of foreclosed homes in the regions of Murcia (-78%), Valencia (-71%), Catalonia and Andalusia (both -69%) as well as the Canary Islands (-67%).

Depreciation on foreclosed homes in Spain since the beginning of the crisis has reached an average of 63%

In these regions, the average decrease in housing prices, between the first quarter of 2007 and the second quarter of 2013, was 32% in Murcia, the Canary Islands and Andalucía, 37% in Valencia and 48% in Catalonia.

El Mundo reported that, in the whole of Spain, the greatest decreases in the price of housing since the beginning of the crisis correspond to Catalonia and Aragon (48%), Madrid (46%), and the Basque Country (43%). In Castilla y León, the price of housing has accumulated an average decrease of 39%, while in Castilla-La Mancha and Valencia the average decline is 37%.

When analysing only foreclosed homes, the prices fell by an average of 64% in Aragon and 62% in Madrid, while they dropped by 61% in Castilla-La Mancha and by 60% in Castilla y León. The decline in prices registered in the Basque Country reached 56%.

Moody’s warned: “The largest losses are concentrated in the foreclosed properties on the Mediterranean coast, Andalusia and the Canaries ( … ) although it will not lead to a lowering in the rating, taking heavy losses on foreclosed mortgaged homes is detrimental for the credit”.


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Fall in House Prices Moderates in Second Quarter

The National Statistics Institute reported on Friday that house prices fell by 0.8% in the second quarter of the year compared to the previous quarter, representing the most moderate decline since the fourth quarter of 2010.

Thus, the fall in housing prices has moderated, after the pronounced decline of 6.6% registered between January and March, the biggest quarterly decline recorded since 2007, the year in which the National Statistics Institute began developing this index.

Specifically, Europa Press reported that second-hand home prices decreased by 0.1% compared with the first quarter, while the price of new housing fell by 2.4%.

Year-on-year (second quarter of 2013 over the same quarter of 2012), the price of housing also moderated its decline to 12%, compared with the 14.3% annual decline experienced in the first quarter.

Housing prices have now accumulated 21 consecutive quarters in which they have registered negative annual rates. The prices began to fall in the second quarter of 2008 (-0.3%), and since then the trend has not been reversed.

The House Price Index published by the National Statistics Institute complies with the requirements of Eurostat and complements the report published quarterly by the Ministry of Development. Among its objectives is to serve as a point of comparison between Member States in terms of housing prices.

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Property prices fell 4% in 2011

In 2011 the price of new properties in Spain fell by 4% bringing the average price down to 2,376 euros per square metre, and the cost of the average home to around 213,000 euros.

This is according to the Sociedad de Tasación (Valuation Society) who estimate that prices will continue to fall in 2012 after falling 3.2% in 2010 and 4% in 2011.

Although they predict further decreases they stress that in some locations the decrease may be less pronounced. “It is expected the adjustment will continue at the supply level offered in late 2008, adapted to meet a volume of demand lower than in previous periods,” they said.

Europa Press reported that during 2011, the average price of new housing fell in 48 of the 50 provincial capitals, while only one saw an increase and the other remained unchanged.

Of the capitals Sevilla saw the greatest decline at -8.3% followed closely by Ciudad Real at -7.8%.

Four provincial capitals (Barcelona, San Sebastian, Madrid and Bilbao), saw a price per square metre higher than the national average while in ten others  (Murcia, Cáceres, Badajoz, Pontevedra, Jaén, Lugo, Zamora, Tenerife, Avila and Ciudad Real) the average value fell below 1,500 euros.

There were 81,000 new builds registered in 2011 showing a decline in construction mainly due to difficulties in financing projects.

The Sociedad de Tasación also noted an increase in the number of properties between one and five years old that were vacant and still awaiting first occupation, being offered for sale by non-real estate professionals including credit institutions and private individuals.

There was also an increase in the number of properties being sold on a rent-to-buy option.

Banesto’s Q3 figures released

Banesto, part of the Santander group, has accounced results for Q3 today revealing a huge drop in profits due to what the bank is calling a “diffilcult year for the banking business”.

Banesto’s net profit fell in the third-quarter to €298.4m compared to €450.6m for the same period last year, a drop of 33.8%. Analysts predicted a 23.4% average fall in net income over the first nine months of the year.

Banesto added that this was a result of the continuing ecenomic crisis hitting banks across Europe, along with the ever rising cost of financing. Banesto is the first Spanish bank to release it’s figures each quarter.

Like other Spanish banks Banesto’s “bad loans” have affected their bottom line. Across the industry the bad-loan-ratio was 6.69% in July. Although it is still below the average Banesto’s ratio rose to 4.65% at the end of September, a slight increase from 4.39% in June.

The bank reduced private sector credit by 8% compared to the first nine months of 2010. This was due to the banks attempt to reduce the dependance on outside funding. Other banks in Spain have also been attempting to reduce private sector credit.

Banesto’s net interest income fell to €1.13bn, a drop of 12%, during the first three quarters of the year. This increased to 14% (€361,7m) during September.

The banks said their core capital ratio had reached 9 percent in September which would allow the bank to meet its target for the year.

On release of the figures Banesto shares fell 1.3 percent to €4.50 in Madrid, incresing the decline for the year to 28 percent.

Optimistic signs for Spanish property

Property prices in Spain are dropping, tax on new build property is down by 50%, sales numbers are climbing and tourism numbers are at record levels – could this be the end of Spain’s holiday homes slump? For the first time international investors have overtaken domestic buyers.

Property agents all over Spain have noticed an increase in inquiries, viewing trips and sales as buyers watch prices fall.

TINSA’s August House Price Report noted an accumulated drop of 23.5% since it’s peak in late 2007. In the more popular areas excessive supply has pushed prices down by around 30%, while some repossessed properties have been selling at up to half the book value, with those in the best locations selling out first.

Overseas buyers are currently buying up to 1,000 properties a day in key areas like the Costa Blanca, Costa del Sol and Ibiza. Up to half of these sales are from Spanish banks or cash-strapped developers.


Second Quarter Figures Show Drop in Property Sales

According to data released by the Ministry of Development property sales in Spain continued to decline during the second quarter with a 40.8% drop over the same period in 2010, with 90,746 transactions.

The first three months of the year showed a decline of 30.4%, despite the increases in late 2010 which may have been motivated by the demise of the tax credit for home purchases for incomes exceeding 24,000 euros.

The Ministry said that year-on-year results were not strictly comparable as VAT increased from 7% to 8% in July 2010.

The figures showed that new housing accounted for 33.7% of all transactions and maintained the downward trend compared to resale properties.

Real estate transactions registered at notary in the last twelve months in Spain (July 2010-June 2011) stood at a total of 396,245 homes sold.

Regionally, sales increased during the first quarter. The most notable increases were in Cantabria (45.96%) and Cataluña (39.25%) while some regions saw a drop (Galicia-1.32%,  Navarra-15.74%).

At the end of August it was revealed that the fall in the number of new mortgages set up reached 42.4% year-on-year in June, with 32,680 signatures, one of the lowest figures recorded by the National Statistics Institute.