Spanish property market will see an upturn this year

Posted on April 19th, 2012 in Real Estate in Spain by editor

Commenting on the real estate trends of 2012, CBRE’s president Mr Eduardo Fernandez-Cuesta expressed his organisation’s views that transactions for the property market this year will show an increase compared to 2011, but warned that home values would continue to undergo a downward price adjustment.

The CBRE president made his predictions during a presentation on trends in Spain’s real estate market and said that the most sales transactions currently being registered were those for properties with price tags of between €100,000 and €120,000, where 100% finance packages were offered as part of the deal.

Basing his comments on his company’s survey of 200 industry professionals, Mr Fernandez-Cuesta added that 90% of those questioned predicted sales prices for residential properties would decline further, however, the same experts stated that Madrid and Barcelona had pretty much reached their bottom level in the current price adjustment.

Discussing the individual segments of the residential sector, the survey showed that new housing developments would continue to suffer, while refurbished existing homes and the rent-to-buy sectors would fare much better this year.

CBRE’s president highlighted the need for a recovery of the property market to take place soon, as banks and other financial institutions needed to tidy their balance sheets and rid themselves of unsold assets.

He added that public spending cuts in the light of the Government’s austerity measures would have an impact on the management of civic property assets used for administrative purposes. Adolfo Ramirez-Escudero, CEO and consultant of the company, explained this point further. Of the 200 industry professionals questioned, 95 % stated that such municipal bodies are not making the most of their real estate assets.

The survey showed that 91.8% of property experts estimate financial institutions are also not making the most of the property assets in their possession, while 60% of experts believe that banks will add to their real estate portfolios this year rather than divest of housing stock.

Seen on a business by business sector basis, experts believe that the office market will attract more investment than the retail sector, closely matched by the residential and industrial real estate sectors.

Looking more closely at the subject of investment, the study suggests that 53% of experts questioned believe the opportunistic funds market will be looking to invest more on a higher returns basis, with the remainder coming from private investors (20%) and institutional investors (13%).

The survey also revealed that the predictions for real estate organisations outside of Spain included an upturn for hotels with the fastest growth predictions and the office market as the most likely to be of increased interest to overseas investors.

El Economista reported that the survey further revealed an upturn of the real estate market would go hand in glove with a reduction of unsold real estate currently on the market. Some 50% of experts questioned believe that this year far more properties will be sold than last year, predicting that this would affect all sectors with the exception of the logistics real estate market.

SOURCE: http://news.kyero.com

Overnight stays in Spanish hotels rose by 3.5% at the start of the year

Posted on April 19th, 2012 in Real Estate in Spain by editor

January 2012 figures published by the National Statistics Institute show that 12.6 million visitors opted for overnight stays in Spanish hotels during the first month of the year, which represents a 3.5% rise in a year-on-year comparison.

While the overnight stays for residents fell slightly by 0.2%, the number of overnight stays for non-residents rose by a significant 6.1% with the average length of stay going up by 1% at the same time compared to the same month in 2011. The average length of stay recorded now stands at 3.1 nights per person.

Another study, the Hotel Price Index (HPI) showed an increase of 0.3% for January 2012. Turning to the overall profitability of the hotel sector and the average room rate achieved, the HPI study shows that while invoiced overnight stays per night were on average €68.30, the actual profit made per room was €28.90.

Occupancy rates of available rooms stood at 37.4% for January this year, which represents a 3.3% rise on the same period in 2011. At weekends the occupancy rate rose to 40%, which represents a 2.2% rise when compared to the same month a year ago.

Overseas Visitors’ Overnight Stays

A breakdown by country shows that in January 2012 a greater number of German guests stayed overnight than British visitors. The overnight stays for German guests were recorded at 27.3% and for British visitors overnight stays stood at just 21.1%, which means the German market segment rose by 3.7% on the same month a year ago, while the British holidaymakers only represented a 0.8% rise.

Overnight stays from guests coming from Italy (down 5.5%), France (up 10.2%) and Sweden (up 25.7%) were also an indicator of the respective economies in those countries, which influences tourists’ decisions on holiday budgets.

Favourite Holiday Spots

As in previous years the most popular holiday destination for tourists from other countries are Andalusia and the Canary Islands. Overnight stays by foreign guests holidaying in the Canary Islands went up by 7.7% compared to the same month a year ago. In second place is Cataluña with a 1.1% increase and Andalusia is in first place with a 14.7% rise.

With regard to Spanish residents holidaying in their own country, they favoured Andalusia, Cataluña and the Communidad de Madrid for overnight stays. Here the year-on-year comparison shows a downturn for Andalusia (5.4%), but an upturn for Madrid (0.3%) and Cataluña (3.7%).

The Canary Islands, seen on a year-on-year comparison for highest occupancy rates by room, were the winner with 71.3%, with the Communidad de Madrid in second place (41.0%) and Communidad Valenciana in third with 35.3% occupancy rates per room.

Occupancy and overnight stay rates were best for the island locations as well as coastal regions and the resorts located in the Pyrenees. In this category Gran Canaria was the clear winner with an occupancy rate by room recorded at 78.0% and a weekend occupancy rate by room at 78.7%.

Holiday Island Tenerife had a record 2 million overnight stays just for January 2012, while Madrid, San Bartolomé de Tirajana and Adeje recorded the greatest number of overnight stays. Popular tourist destination Arona achieved the highest occupancy rate by room with 83.3%, while Puerto de la Cruz boasted a weekend occupancy rate of 83.8% per room.

Considering a year-on-year comparison of January’s results, the HPI reached 0.3% this January, a 1.6 point increase from December 2011 and a 1.2 point rise from those recorded for the same month in 2010.

SOURCE: http://news.kyero.com

Newly built homes’ values to fall further this year

Posted on April 19th, 2012 in Real Estate in Spain by editor

Cincodias.com reported that the Spanish government predicts the asking prices for newly built homes will fall further in 2012, bearing in mind that nearly 65% of all housing surplus is located at the Spanish costas. The lack of available credit and stagnant labour market has made it more difficult to reduce the number of empty new homes on the market.

The most dramatic price adjustment will be reserved for the 800,000 purpose built holiday and second homes, which are mainly located at the Mediterranean coast.

A recently published study conducted by Cataluña Caixa suggests that two thirds of unsold, and seemingly unwanted housing stock were constructed in coastal areas, ore more precisely, some 65% of such homes were built in Andalusia, the Balearic Islands, Catalonia,  Murcia and Valencia.

The latter is the worst affected region with nearly 210,000 unsold homes still on the market at the end of September 2011, which reflects 25.6% of the total unsold housing stock. Seen in combination with 137,000 unsold homes in Murcia and 107,000 unsold properties in Catalonia, this represents a 55.4% share of the overall unsold surplus.

Worrying still, while the overall availability of new housing stock may have reduced down over the past couple of years, in the Basque Country, Catalonia and Valencia more newly built homes have come onto the market.

Seen on a province by province basis, Castellón is showing a volume of almost 114,000 empty homes, whereas Alicante and Barcelona recorded 57,000 unsold newly build homes respectively. Murcia recorded another 52,000 unsold properties and Valencia registered some 40,000 newly build, unsold properties.

SOURCE: http://news.kyero.com