RESIDENTIAL MARKET IN SPAIN SERVIHABITAT TRENDS EXECUTIVE SUMMARY First quarter 2016
In 2015, it was confirmed that the downward trend of the residential market in Spain was slowing down. Some areas showed clear signs of recovery according to the moderate improvement of the indicators that measured the market in 2015. In 2016, this mild evolution is expected to continue. COMMITMENT, TEAMWORK AND LEADERSHIP 2
/ PRODUCTION HOUSING STARTS 2015 2016F year-on-year variation rate 2016 12.5% ASTURIAS BASQUE 62.7% 3.3% 35.0% 27.0% 8.7% 44,600 homes started 50,800 completed homes 1.0% 11.2% 27.5% 1.0% 29.5% 12.4% -2.0% +10% year-on-year increase +12.5% year-on-year increase 11.3% 2.2% 14.4% 22.9% No data available Source: Servihabitat and Real Estate Chair of the IPE. Note: F (forecast) COMMITMENT, TEAMWORK AND LEADERSHIP 3
/ STOCK NEW CONSTRUCTION STOCK Stock in 2016 per 10,000 inhabitants 1,000,000 900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 EVOLUTION OF THE NEW CONSTRUCTION STOCK 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016F 122.0 7.5 ASTURIAS 132.4 209.3 BASQUE 56.4 297.3 19.2 128.0 14.3 117.4 7.6 Source: Spanish National Institute of Statistics, Ministry of Public Works and Network of Qualified Real Estate Advisory and Real Estate Chair of the IPE Note: F (forecast) 2015 2016F 20.9 331.2 30.6 201.0 273.6 Source: Servihabitat and Real Estate Chair of the IPE 492,000 homes -25% 367,500 homes 8.0 No data available TO SELL This stock decrease is not taking place in a uniform manner across the market nor in all the product segments. The main cities have experienced a gradual decrease in homes for sale over the last 6-8 years that puts them in a technical stock situation. This is not the case in the metropolitan areas, where the potential solvent demand does not seek new homes at the periphery, so there is still a considerable stock in these municipalities that will be harder to drain. COMMITMENT, TEAMWORK AND LEADERSHIP 4
/ RESIDENTIAL TRANSACTIONS AND OPERATIONS 2016 2.6% RESIDENTIAL TRANSACTIONS ASTURIAS 18.2% 2015 2016F year-on-year variation rate 0.9% BASQUE 11.6% 10.3% 2.2% 10% 440,000 year-on-year increase sold homes* 10.4% 6.2% 12.2% 12.3% 13.5% The increase in volume operations is due to such factors as: > Activation of the stagnant demand of recent years, as many buyers preferred to wait for a more stable economy, as well as for prices to take a U-turn. > Increase in investment due to the low point of the market and attractiveness in front of other investment alternatives, as moderate but constant returns are expected. -0.6% 3.5% 8.0% 10.0% 5.8% > Reactivation of mortgages by banks, with a positive Euribor conjuncture. 12.2% 3.4% Source: Servihabitat and Real Estate Chair of the IPE. Note: F (forecast) *According to data from the Spanish Notarial Certification Agency (ANCERT) COMMITMENT, TEAMWORK AND LEADERSHIP 5
/ PRICES EXPECTED EVOLUTION OF HOUSING PRICES FOR 2016 2015 2016F year-on-year variation rate +3.8% 0.9% ASTURIAS 0.2% 0.4% BASQUE 0.2% 1.9% 1.3% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Housing Price Index year-on-year variation by the Spanish National Institute of Statistics 4.0% 1.2% 2.3% 4.4% 0.4% 6.8% 0.8% 4.6% The average effort that a Spanish family must make to acquire a home, measured in terms of the number of years of gross debt which should be employed to pay for it, significantly decreased from 9 years in late 2007. 9 YEARS 6 YEARS 3.0% 2.2% No data available 1.7% 2007 2016 Source: Servihabitat and Real Estate Chair of the IPE. Note: F (forecast) COMMITMENT, TEAMWORK AND LEADERSHIP 6
/ RENTAL MARKET 60% EVOLUTION OF THE RENTAL MARKET WITH RESPECT TO RESIDENTIAL TRANSACTIONS More than 21% of Spaniards live in rented homes 50% 40% 30% 20% 10% 0% THE NUMBER OF TRANSACTIONS WILL SIGNIFICANTLY INCREASE THE NUMBER OF TRANSACTIONS WILL SLIGHTLY INCREASE IT WILL REMAIN STABLE WITH RESPECT TO RESIDENTIAL TRANSACTIONS THE NUMBER OF TRANSACTIONS WILL SLIGHTLY DECREASE THE NUMBER OF TRANSACTIONS WILL SIGNIFICANTLY DECREASE 60% of rented flats do not exceed 400 per month SEPTEMBER 2015 MARCH 2016 Source: Servihabitat and Network of partner agents (APIs) 13.9% of rental seekers are foreigners COMMITMENT, TEAMWORK AND LEADERSHIP 7
/ FOREIGN BUYERS HOUSING PURCHASES BY FOREIGNERS IN 2015 Percentage of purchases by foreigners in 2015 69,196 homes purchased by foreigners in 2015 2.4% ASTURIAS 3.3% 3.0% BASQUE 2.8% 8.0% 5.4% 4,846 non-residents Source: Ministry of Public Works and own sources. 64,350 residents 8.6% 2.6% 16.8% 7.4% 39.3% 17.2% of residential sales are sales to foreigners 1.8% 6.0% 18.8% 34.0% 23.2% 8% of purchases in 2015 were purchases of new housing 37.1% 4.8% Eight provinces accumulate 66.4% of foreign purchases. In Alicante, 50.6% of effective demand in 2015 came from this type of buyers, 42.9% in Santa Cruz de Tenerife, 39.3% in the Balearic Islands and Malaga, 32.1% in Girona and Las Palmas, 23.2% in Murcia, and 22.6% in Almeria. Source: Ministry of Public Works and own sources PURCHASES BY FOREIGNERS > 30% PURCHASES BY FOREIGNERS < 30% COMMITMENT, TEAMWORK AND LEADERSHIP 8
MADRID Avda. de Burgos, 12 28036 - Madrid BARCELONA C/ Provençals, 39 08019 Barcelona Telf: (+34) 902 15 01 02 contactocorporativo@servihabitat.com COMMITMENT, TEAMWORK AND LEADERSHIP