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

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