residential market in spain · region of murcia ceuta and melilla canary islands community of...

Residentialmarketin Spain

SERVIHABITAT TRENDSSecond half of 2018

The Spanish residential market has shown signs of consolidation in 2018. The forecasts for 2019 is this trend to continue but with greater stabilization in the main indicators of the sector.

COMMITMENT, TEAM AND LEADERSHIP 2

SERVIHABITAT TRENDS DECEMBER 2018

GDP growth, consumer confidence in political and economic situation, employment and the evolution of business volume are variables that drive the behaviour of consumers and companies.

The GDP is still growing but this trend shows a continuous slowdown for upcoming quarters. However, it should be highlighted that the Spanish economy will continue to grow more than the European average. Consumer confidence in the economic situation is at 40.4 points, lower than the equivalent previous period. On the contrary, public opinion on the political situation is more favorable than one year ago.

The unemployment rate will continue to drop generating employment within a positive economic cycle.

1. MACROECONOMIC AND BUSINESS ENVIRONMENTTHE SPANISH ECONOMY GROWS MORE THAN THE EUROPEAN AVERAGE AND IT IS STILL GENERATING EMPLOYMENT

-5.0%

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18E ‘19F

F2019: 2.3

QUARTERLY VARIATION % ANNUAL VARIATION %

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

GROSS DOMESTIC PRODUCT

CONSUMER CONFIDENCE IN THE POLITICAL AND ECONOMIC SITUATION

0

10

20

30

40

50

60

70

2002 2006 2010 2014 2018

C.I. ECONOMY C.I. POLITICS

Source: CIS and own sourcesNote: official data at June 2018

0%

5%

10%

15%

20%

25%

30%

‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18E ‘19F

15.4%14.0%

UNEMPLOYMENT RATE

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

3


COMMITMENT, TEAM AND LEADERSHIP

In the context of home development, greater activity has been detected in the largest centers of population, especially in provincial capitals such as Madrid, Barcelona, Valencia, Seville and Malaga.

The holiday home market is still growing but the typical popular regions like the Mediterranean shore (north to south) and the islands do not change.

Project starts will slow in 2019, although in line with good residential market performance, in an attempt to adjust to demand and avoid generating large housing stocks.

In this context, construction completion and delivery in the coming year is expected to be in accordance with reasonable good perspectives, as well as the evolution of prices and profitability.

2. PRODUCTION

HOUSING STARTS2018 / 2017 year-on-year variation rate (%)

HOUSING STARTS

2018E94,551

2019F102,572+8.5%

COMPLETED HOUSING

2018E62,834

2019F76,922+22.4%

Source: Servihabitat and CEPREDENote: The intervals shown in the legend correspond to the quartiles in the sample

THE PERCENTAGE OF INCREASE CONTINUES BUT THEY WILL MODERATE TO ADJUST TO THE MARKET

Note: E (estimate), F (forecast)

14.6%

31.9%

2.4%

57.7%

Data not available

3.4%

27.2%

20.1%

6.4% 17.5%

17.1%

8.6%

-13.7%

32.3%

36.4%

-29.0%3.9% 15.0%

> 27.2

15.0% - 27.2%

3.9% - 15.0%

< 3.9%

EXTREMADURA

BALEARIC ISLANDS

COMMUNITY OF VALENCIA

REGION OF MURCIA

CEUTA AND MELILLA

CANARY ISLANDS

COMMUNITY OF MADRID

CASTILLA-LA MANCHA

CASTILLA Y LEÓN CATALONIA

ANDALUSIA

GALICIA

ARAGON

ASTURIAS LA RIOJA

NAVARRE

CANTABRIA BASQUECOUNTRY

4



3. NEW CONSTRUCTION STOCK

NEW CONSTRUCTION STOCK

2018E464,590

2019F452,112-2.7%

The new construction stock ratio for 10,000 inhhabitants in Spain is greater than 99.5 homes in 2018

50% of the stock is located in three autonomous communities: Community of Valencia, Catalonia and Andalusia

NEW CONSTRUCTION STOCKStock in 2018 per 10,000 inhabitants

Source: Ministry of Public Works, Spanish National Institute of Statistics and own sourcesNote: The housing stock figures are our own estimates using Ministry of Public Works reports. In some autonomous communities, the official sourcereports "0" stock, as is the case of Cantabria. The intervals shown in the legend correspond to the quartiles of the sample

DOWNWARD TREND ALTHOUGH WE CAN SEE A VERY HETEROGENEOUS BEHAVIOUR OF THE MARKET


8.1

82.4

174.3

144.3

40.4

136.3

61.2

191.0

132.2 98.8

84.5

83.0

102.6

95.0 287.4

18.3

- 20.6

Stock per 10,000 inhabitants over 136

Stock per 10,000 inhabitants between 95 and 136

Stock per 10,000 inhabitants between 61 and 95

Stock per 10,000 inhabitants under 61

EXTREMADURA

BALEARIC ISLANDS


REGION OF MURCIA

CEUTA AND MELILLA

CANARY ISLANDS

COMMUNITY OF MADRID

CASTILLA-LA MANCHA


ANDALUSIA

GALICIA

ARAGON

ASTURIAS LA RIOJA

NAVARRE


5



4. RESIDENTIAL TRANSACTIONS AND OPERATIONS

RESIDENTIAL TRANSACTIONS2018 / 2017 year-on-year variation rate (%)

The price of 68.6% of homes sold is less than €150,000.

Most first home access takes place among buyers between 36 and 45 years old (58% of cases). 32% of first home buyers are under the age of 35, a similar percentage than last year.

Regarding mortgages, in 2018 there have been several events that have been conditioning the scenario: the sociopolitical climate is affecting confidence in some autonomous communities and new legal regulations towards the banks.

HOMES SOLD(NOTARIES)

2018E604,067

2019F632,363+4.7%

HOME MORTGAGES

2018E339,389

2019F357,898+5.5%

TIME TO SELL

First homes6.1 months

Holiday homes7.2 months

Source: Servihabitat and CEPREDENote: the intervals shown in the legend correspond to the quartiles in the sample

SUSTAINED GROWTH BUT IN A CONTEXT PENDING ON THE REACTION OF THE NEW REGULATION


11.4%

1.5%

16.0%

20.5%

1.0%

1.0%

13.6%

13.3%

13.3% 5.5%

21.3%

11.8%

18.6%

17.1%

10.0%

23.0%10.1% 4.2%

>16.8%

12.5% - 16.8%

6.6% - 12.5%

< 6.6%

EXTREMADURA

BALEARIC ISLANDS


REGION OF MURCIA

CEUTA AND MELILLA

CANARY ISLANDS

COMMUNITY OF MADRID

CASTILLA-LA MANCHA


ANDALUSIA

GALICIA

ARAGON

ASTURIAS LA RIOJA

NAVARRE


6



5. PRICES

In 2018, the price of new homes has increased in all the autonomous communities between 0.2% and 9.1%. The price increase in seven of these has been above the average: Balearic Islands, Catalonia, Extremadura, La Rioja, Castilla y León, Basque Country and the Community of Madrid

The three most prominent cases of rising prices (Community of Madrid, Catalonia and Balearic Islands) are showing different degrees of decrease in residential transactions compared to the Spanish average.

Source: Home Price Index (Spanish National Institute of Statistics) and own sourcesNote: the intervals shown in the legend correspond to the quartiles in the sample

HOME PRICE

2018E+5.8%

2019F+4.7%

1.3%

8.3%

3.7%

2.7%

Data not available

5.2%

10.1%

1.1%

3.0% 9.0%

4.4%

3.6%

3.8%

3.1% 3.8%

2.8%

5.8% 5.9%

EVOLUTION OF PRICES BY AUTONOMOUS COMMUNITIES(HOME PRICE INDEX/ SPANISH NATIONAL INSTITUTE OF STATISTICS)

2018 / 2017 year-on-year variation rate (%) (2Q-2018)

POSITIVE ANNUAL VARIATIONS, BUT THEY MODERATE FOR 2019


> 5.8%

3.8% - 5.8%

3.0% - 3.8%

< 3.0%

EXTREMADURA

BALEARIC ISLANDS


REGION OF MURCIA

CEUTA AND MELILLA

CANARY ISLANDS

COMMUNITY OF MADRID

CASTILLA-LA MANCHA


ANDALUSIA

GALICIA

ARAGON

ASTURIAS LA RIOJA

NAVARRE


7



6. RENTAL MARKETNEARLY HALF OF THE HOUSEHOLDS BETWEEN 16 TO 29 YEAR-OLD LIVE IN RENTAL HOMES

The average gross profitability in

Spain for a rental home is 5.6%

On average, it takes seven

weeks to rent a home in Spain

As reported by 10.2% of the

APIs, more than half of their

customers are foreigners

The average rental offer in Spain is 2.2

homes per 1,000 people and 5.7 per 1,000 households

22.9% of the Spanish population

lives in rental homes

69.5% of tenants are younger than

35 years-old

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

€710

Nearly 55% of the APIs believe that rental prices will

remain stable in the coming months

14.4% of the population pays a

market price rent in Spain

Sw

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Ger

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D

enm

ark

Uni

ted

Kin

gdom

Fran

ceS

wed

enN

ethe

rland

sE

urop

ean

Uni

onIre

land

Bel

gium

Finl

and

Italy

Cyp

rus

Gre

ece

Luxe

mbo

urg

Slo

veni

aP

ortu

gal

Spa

inIc

elan

dC

zech

Rep

ublic

Est

onia

Mal

taLa

tvia

Bul

garia

Ser

bia

Nor

way

Pol

and

Hun

gary

Slo

vaki

aC

roat

iaM

aced

onia

Lith

uani

aR

oman

ia

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

HOME OWNERSHIP IN EUROPEAND DISTRIBUTION OF THE RENTAL MARKET ACCORDING TO RENT PRICE

WITH RENT ATMARKET PRICE

POPULATION (%)LIVING IN RENTAL HOMES

WITH RENT LOWERTHAN MARKET PRICE

POPULATION WITH MARKETPRICE RENT / TOTAL (%)

Source: Eurostat and own sourcesNote: The most recent data available are for 2016 and 2017

8



7. THE FOREIGN BUYER

Source: Professional Association of Registrars and own sources

The foreign buyer represents the 17.1% of the total home transactions in Spain in 2018

93% of purchases by foreigners take place in the main provincial capitals and on the Mediterranean coast.

The British continue to head the results for 2018 and are the leading nationality among foreign buyers in Spain, followed by Germans, French, Swedish and Belgians.

(+9.4%)

THE TREND OF THE FOREIGN BUYER WILL CONTINUE SIMILAR THAN IN THE PREVIOUS QUARTERS

Provinces with a foreign purchase percentage versus total operations higher than Spanish average

PURCHASES BY FOREIGNERS IN 2018 (CUMULATIVE 4 QUARTERS)% of purchases by foreigners versus total in the provinces

25.4%GIRONA

15.3%TARRAGONA

41.4%ALICANTE

13.2%CASTELLÓN

29.0%BALEARIC ISLANDS

26.7%MALAGA

21.6%LAS PALMAS

20.4%ALMERIA

19.2%MURCIA

41.8%

SANTA CRUZDE TENERIFE

91,756properties are purchased by foreigners in 2018

17.1%

9



8. SUMMARYTHE GROWTH CONSOLIDATION CONTINUES IN THE SPANISH RESIDENTIAL MARKET AND A STABILIZATION IS EXPECTED FOR 2019

HOUSING STARTS

2018E94,551

2019F102,572+8.5%

COMPLETED HOUSING

2018E62,834

2019F76,922+22.4%

NEW CONSTRUCTION STOCK

2018E464,590

2019F452,112-2.7%

HOME PRICE2018E

+5.8%2019F

+4.7%

HOMES SOLD(NOTARIES)

2018E604,067

2019F632,363+4.7%

TIME TO SELL

First homes6.1 months

Holiday homes7.2 months


10



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.

MADRIDAvda. de Burgos, 1228036 - Madrid

BARCELONAC/ Provençals, 3908019 – Barcelona

Telf: (+34) 902 15 01 02 | [email protected]


residential market in spain · region of murcia ceuta and melilla canary islands community of...

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