residential market in spain ‘19 · region of murcia canary islands community of madrid...

Residentialmarketin Spain ‘19S E R V I H A B I T A T T R E N D S | D E C E M B E R 2 0 1 9

The consolidation trend of the residential market continues in 2019 and is also expected to continue in 2020. Even so, the forecast is that key indicators of the sector will show restraint over the following year.

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THE SPANISH ECONOMY IS GROWING FASTER THAN THE EUROPEAN AVERAGE, ALTHOUGH IT IS SLOWING DOWN

1. MACROECONOMIC AND BUSINESS ENVIRONMENT

The GDP continues growing, but with a trend that shows the slowdown will continue over the coming months. Even so, the Spanish economy continues to grow faster than the European average (1.4% - 1.5%).

Consumer confidence in the economic situation is lower than last year at 36.5 points, while the opinion of the political situation is also less favorable, at 31.6 points in September.

The unemployment rate will continue to fall over the next few months, although more slowly.

GROSS DOMESTIC PRODUCT

Source: Spanish National Institute of Statistics and CEPREDE forecast.

1Q-2

006

4Q-2

006

1Q-2

007

4Q-2

007

1Q-2

008

4Q-2

008

1Q-2

009

4Q-2

009

1Q-2

010

4Q-2

010

1Q-2

011

4Q-2

011

1Q-2

012

4Q-2

012

1Q-2

013

4Q-2

013

1Q-2

014

4Q-2

014

1Q-2

015

4Q-2

015

1Q-2

016

4Q-2

016

1Q-2

017

4Q-2

017

1Q-2

018

4Q-2

018

1Q-2

019

4Q-2

019

1Q-2

020

4Q-2

020

-5.0

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

CONSUMER CONFIDENCE IN THE POLITICAL AND ECONOMIC SITUATION

Source: CIS and own sources.

C.I. POLITICS C.I. ECONOMIC

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

2003 2007 2011 2015 2019

UNEMPLOYMENT RATE (%)

0.0

5.0

10.0

15.0

20.0

25.0

30.0

8.5 8.2

11.2

17.9

19.921.4

24.826.1

24.4

22.1

19.617.2

15.314.2 13.8

20102009200820072006 2011 2012 2013 2014 2015 2016 2017 2018 2019E 2020F

Source: Spanish National Institute of Statistics and CEPREDE forecast.Note: E (estimate), F (forecast).

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THE PROFITABILITY RATIO AND THE EVOLUTION OF PRICES PROVIDE A POSITIVE ENVIRONMENT FOR NEW HOMES

2. PRODUCTION

In the area of promotion of first homes, more activity is perceived in larger populations, especially in capitals like Madrid, Barcelona, Valencia, Seville and Malaga.

The holiday homes market continues to increase its activity without altering the traditionally chosen areas: namely, the Mediterranean coast (north to south) and the two archipelagos.

Project starts will continue, with signs of moderation in 2020, and an increase of 8.5% is expected for 2019. This trend responds to the general context of the economy, attempting to adjust to demand and avoid large stocks.

Completed and delivered construction work will reach 18.4%, equivalent to more than 94,000 projects completed, a figure that is very relevant as it is practically double the figure for 2014-2016, and has not been seen since 2013.

15.4% 21.5%34.8%

-11.7%

42.2%

5.1%

15.3%

13.2% 20.9%

14.8%

7.6%

6.2%

7.8%

5.9%

40.7%

-6.7% 4.9%

EXTREMADURABALEARIC ISLANDS

COMMUNITYOF VALENCIA

REGIONOF MURCIA

CANARY ISLANDS

COMMUNITYOF MADRID

CASTILLA-LA MANCHA

CASTILLA Y LEÓN CATALONIA

ANDALUSIA

GALICIA

ARAGON

ASTURIAS

LA RIOJA

NAVARRE

CANTABRIABASQUE

COUNTRY

HOUSING STARTSANNUAL VARIATION RATE (%) 2019 / 2018

> 20.9%

5.9% - 13.2%

13.2% - 20.9%

<5.9%

Source: Servihabitat and CEPREDE.Note: The intervals shown in the legend correspond to the quartiles in the sample.

Note: E (estimate), F (forecast).

+14.9%

115,3622019E

+8.5%

125,1572020F

HOUSING STARTS

+23.4%

79,6572019E

+18.4%

94,3172020F

COMPLETED HOUSING

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NEW CONSTRUCTION STOCK IS GRADUALLY FALLING

3. NEW CONSTRUCTION STOCK

Despite the downward trend in stock volume, the current ratio is at 94.9 new homes per 10,000 inhabitants. At this point, the heterogeneous conduct of the market must be borne in mind, as 50% of the stock continues to be concentrated in three autonomous communities: the Community of Valencia, Catalonia and Andalusia.

NEW CONSTRUCTION STOCKStock in 2019 per 10,000 inhabitants

Stock per 10,000 inhabitants over 130

Stock per 10,000 inhabitants between 91 and 130

Stock per 10,000 inhabitants between 60 and 91

Stock per 10,000 inhabitants under 60

Source: Ministry of Public Works, Spanish National Institute of Statistics and own sources.Note: The housing stock figures are our own estimates using Ministry of Public Works reports.

The intervals shown in the legend correspond to the quartiles in the sample.

-3.8%

445,2252019E

-3.5%

429,5252020F

NEW CONSTRUCTION STOCK

5.4 68.8167.5

136.9

95.6

124.8

59.7

193.8

130.1 94.3

79.0

78.0

91.3

101.1

11.3

276.7

- 11.0



REGIONOF MURCIA

CANARY ISLANDS

CEUTA AND MELILLA

COMMUNITYOF MADRID

CASTILLA-LA MANCHA


ANDALUSIA

GALICIA

ARAGON

ASTURIAS

LA RIOJA

NAVARRE

CANTABRIABASQUE

COUNTRY

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+7.4%

374,1992019E

+6.5%

398,4472020F

RESIDENTIAL MORTGAGES

+6.1%

623,1412019E

+4.0%

647,9522020F

HOMES SOLD(NOTARIES)

RESIDENTIAL TRANSACTIONS AND OPERATIONS HAVE EXPERIENCED SUSTAINED GROWTH BUT THEIR YEAR-ON-YEAR GROWTH HAS MODERATED

4. RESIDENTIAL TRANSACTIONS AND OPERATIONS

In recent quarters, 130,000 residential transactions have been exceeded, something that hasnot occurred since 2008.

Most first home access takes place among buyers between 36 and 45 years old (60% of cases). 27% of first home buyers are under the age of 35, a percentage that has dropped over the last year.

In terms of mortgages, 2019 continues with its rising trend in volume of transactions, but at an annual variation rate that has slowed in line with the general moderation of the market and the macroeconomic context.

RESIDENTIAL TRANSACTIONSAnnual variation rate (%) 2019 / 2018

>12.3%

3.4% - 7.4%

7.4% - 12.3%

<3.4%

19.8% -6.4%3.6%

11.2%

13.2%

-2.7%

4.2%

13.8%

7.1% 7.6%

3.2%

12.7%

10.2%

9.7%

-3.4%

3.3%

13.9% 6.9%



REGIONOF MURCIA

CANARY ISLANDS

CEUTA AND MELILLA

COMMUNITYOF MADRID

CASTILLA-LA MANCHA


ANDALUSIA

GALICIA

ARAGON

ASTURIAS

LA RIOJA

NAVARRE

CANTABRIABASQUE

COUNTRY

Source: Servihabitat and CEPREDE.Note: The intervals shown in the legend correspond to the quartiles in the sample.

TIME TO SELL

First home 6.5 months 7.9 monthsHoliday home

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PRICE TENSIONS WILL CONTINUE, ESPECIALLY IN AREAS WITH A MORE DYNAMIC LABOR AND TOURISM MARKET

5. PRICES

The moderation in price increases is expected to continue in 2020, with a rise of 4.8%, even reaching negative variation between quarters, especially in the last quarter of the year, when prices often increase at a slower rate compared with the third quarter.

In the case of the Community of Valencia, there is an interesting combination in the dynamics of projects started, which are growing faster than the national average, combined with higher prices.

There are eight autonomous communities (Extremadura, Cantabria, Castilla-La Mancha, Galicia, the Region of Murcia, Asturias, Castilla y León and the Basque Country) buying property above the national average and at prices below the national reference.

PRICE EVOLUTION BY AUTONOMOUS COMMUNITIES(Housing Price Index / National Institute of Statistics)Year-on-year variation rate (%) 2019/ 2018 (second quarter)

> 6.2%

4.2% - 4.8%

4.8% - 6.2%

<4.2%

+5.7%2019E

+4.8%2020F

HOME PRICE

2.1% 6.3%4.5%

5.0%

4.2%

8.1%

4.0%

5.1% 6.4%

5.7%

4.2%

6.5%

4.5%

4.4%

6.2%

3.9% 4.8%



REGIONOF MURCIA

CANARY ISLANDS

COMMUNITYOF MADRID

CASTILLA-LA MANCHA


ANDALUSIA

GALICIA

ARAGON

ASTURIAS

LA RIOJA

NAVARRE

CANTABRIABASQUE

COUNTRY

Source: National Institute of Statistics (Housing Price Index) and own sources.Note: The intervals shown in the legend correspond to the quartiles in the sample.

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ALMOST HALF OF HOUSEHOLDS BETWEEN 16 AND 29 YEARS OLD LIVE IN RENTAL HOMES

6. THE RENTAL MARKET

The average gross profitability in

Spain for a rental home is 5.7%

On average, it takes seven

weeks to rent a home in Spain

More than 80.0% of APIs thinks that the majority of potential rental home seekers

are Spanish

The average rental offer in Spain is 1.9

homes per 1,000 people and 4.7 per 1,000 households

23.7% of the Spanish population

lives in rental homes

74.4% of tenants are under 35

years old

The average rental price in Spain for an 80 - 90 sqm home is

€800

Nearly 68.0% of the APIs believe that rental prices will

remain stable in the coming months

14.8% of the population pays a

market price rent in Spain

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

TENURE STATUS OF HOMES IN EUROPE AND DISTRIBUTIONOF THE RENTAL MARKET ACCORDING TO RENT PRICE

Source: Eurostat and own estimates.Note: Data from Iceland refer to 2016 and the rest of the countries to 2017 and 2018, according to the most recent years available.

WITH RENTAT MARKET PRICE

WITH RENT LOWERTHAN MARKET PRICE

POPULATION (%)IN RENTED HOMES

POPULATION WITH MARKETPRICE RENT / TOTAL (%)

Sw

itze

rlan

d

Ger

man

y

Au

stri

a

Turk

ey

Den

mar

k

Un

ited

Kin

gd

om

Fran

ce

Sw

eden

Net

her

lan

ds

Eu

rop

ean

Un

ion

Irel

and

Bel

giu

m

Fin

lan

d

Ital

y

Cyp

rus

Gre

ece

Luxe

mb

ou

rg

Slo

ven

ia

Po

rtu

gal

Sp

ain

Icel

and

Cze

ch R

epu

blic

Est

on

ia

Mal

ta

Latv

ia

Bu

lgar

ia

Ser

bia

No

rway

Po

lan

d

Hu

ng

ary

Slo

vaki

a

Cro

atia

Mac

edo

nia

Lith

uan

ia

Ro

man

ia

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DESPITE A LESS DYNAMISM, IT MAINTAINS ITS MARKET SHARE WITH THE OVERALL SALES FIGURE

7. THE FOREIGN BUYER

91% of purchases by foreigners take place in the main capitals and on the Mediterranean coast, therefore the high levels of concentration continue.

The British continue to head the results for 2019 and are the leading nationality among foreign buyers in Spain, followed by Germans, French, Swedish and Belgians.

The autonomous communities with the largest volume of home purchases by resident foreigners have been the Community of Valencia and Andalusia, followed by Catalonia, the Canary Islands, the Balearic Islands, the Community of Madrid and Murcia.

25.8%GIRONA

13.5%TARRAGONA

40.8%ALICANTE

13.0%CASTELLON

29.2%BALEARIC ISLANDS

28.1%MALAGA

20.6%LAS PALMAS

16.9%ALMERIA

20.3%MURCIA

32.5%

SANTA CRUZDE TENERIFE

PURCHASES BY FOREIGNERS IN 2019(CUMULATIVE MOBILE 4 QUARTERS)% purchases by foreigners versus total provincial

Source: Professional Association of Registrars and own sources.

Provinces with a foreign purchase percentage versus total operations higher than Spanish average (12.4% in the last four quarters of 2019)

16.4%Foreign buyers have carried out 16.4% of the total housing transactions in Spain during 2019

+2.3%

93,952

2019

homes purchasedby foreigners

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STRONG GROWTH IN THE SPANISH RESIDENTIAL MARKET CONTINUES WITH A MODERATION EXPECTED FOR 2020

8. SUMMARY

+14.9%

115,3622019E

+8.5%

125,1572020F

HOUSING STARTS

+23.4%

79,6572019E

+18.4%

94,3172020F

COMPLETED HOUSING

-3.8%

445,2252019E

-3.5%

429,5252020F

NEW CONSTRUCTION STOCK

+6.1%

623,1412019E

+4.0%

647,9522020F

HOMES SOLD(NOTARIES)

+5.7%2019E

+4.8%2020F

HOME PRICE

6.5months

FIRST HOMES

7.9months

HOLIDAY HOMES

TIME TO SELL

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MADRIDAvda. de Burgos, 1228036 - Madrid

BARCELONAC/ Provençals, 3908019 – Barcelona

Telf: (+34) 942 049 000 I [email protected]

NOTICE: This is an informative document containing provisions and estimates that may be subject to change without prior notification. Servihabitat is not the use by third parties of the information contained in this document.

residential market in spain ‘19 · region of murcia canary islands community of madrid...

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