House Prices Rise by 2% Accumulating Five Quarters of Increases

Posted by on Oct 18, 2016 in News

The average price of housing in Spain rose by 2% in the second quarter of the year, to stand at 1,506.4 euros per square metre, which represents a moderation compared with the 2.4% increase registered in the first quarter. However, with the latest figure, house prices have accumulated five consecutive quarters of year-on-year increases, according to the statistics published by the Ministry of Development from Sociedad de Tasación data.   In real terms, discounting inflation, the price of housing has experienced year-on-year growth for the seventh consecutive quarter, reaching an annual increase of 2.9%. According to the Ministry’s statistics, the average value per square metre in the second quarter was 28.3% below the maximum level reached in the first quarter of 2008. Since the minimum value registered in the third quarter of 2014, average prices have recovered by 3.5%. In real terms (including the CPI variation) the current price reflects a drop since the maximum values of 34.7%. El Economista reported that rising second hand housing prices drove the increase in average house prices in the second quarter, since the price of new builds rose by just 0.8% between April and June. Specifically, housing over five years old rose by 2.2% in the second quarter of the year, to stand at an average of 1,500.2 euros per square metre, while the average cost of newly constructed housing stood at 1,746.8 euros per metre following the aforementioned increase of 0.8%. Read...

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What Brexit means for British buyers

Posted by on Oct 2, 2016 in News

The UK’s decision to leave the European Union raises some important questions. Here’s how it will affect British buyers in Spain. Can I still buy a property in Spain? Yes. Britain is still a member of the EU and British citizens enjoy the same rights today that they did last week. It is likely to take at least two years to leave the EU, and many more years to settle the resulting changes in trade agreements. British buyers are unlikely to feel the impact for some years. What does a fall in Sterling mean? A weakened Pound is the most immediate effect of Britain’s referendum. In effect, Spanish property has just become more expensive for UK buyers. The exchange rate is expected to be volatile over the coming months, but buyers can take steps to insulate themselves from currency risk. We strongly recommend Smart Currency Exchange, who have experts on hand to ensure you get the best deal. It is also worth setting this in a wider context: While Spanish house prices have been steadily recoveringover the past 2 years, they remain 32% cheaper than their peak in 2007. Spanish property remains excellent value. What will happen to my property when the UK leaves? Spain has a long history of welcoming buyers from overseas, who now account for 1 in 5 house sales. Non-EU buyers are extremely active in the market and enjoy very similar rights to EU nationals. Leaving the EU/EEA is highly unlikely to impact the rights of British citizens to buy property in Spain. Overseas investment is too important to the economy. Will I still get a mortgage? Yes. Spanish banks typically ask foreign buyers for a deposit of up to 40%. While there is scope for this to rise, it is already at a level that provides banks considerable protection and is unlikely to see much adjustment. Meanwhile, the economic climate in Europe is wedded to low interest rates. Borrowing costs remain good value. Will the Spanish property market crash? British buyers are important to the Spanish market and they are the largest single nationality among overseas investors. However to put this in context, Brits form 4% of the market. There are two reasons Brexit is highly unlikely to trigger a crash. Firstly, foreign buyers are a diverse group: German, French, Belgian, Italian and Swedish (among many others) are all an extremely active, growing part of the market. There may be some localised pain, but even a complete collapse in UK demand (again, totally unlikely) would only put a small dent in the market. Secondly, the market has nowhere to go. Spanish property has been recovering steadily since 2014, but remains a very long way off its peak. The worst we expect from Brexit is restrained growth. Is my EHIC card still valid? Yes. The European Health Insurance Card provides reciprocal health cover for travellers in the EEA. It...

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Home Sales Fell by 7.9% in July – First Fall of the Year

Posted by on Oct 2, 2016 in News

Sales of homes in Spain fell by 7.9% in July, compared with the same month of the previous year, and is the first decline registered so far this year, with a total of 39,841 transactions carried out, according to the latest data from the Notaries’ Statistical Information Centre. In seasonally adjusted terms, the reduction is 1.4%. Apartment sales registered the most pronounced declines, falling by 10.2% year-on-year (4.7% in seasonally adjusted terms), followed by free price housing, with a decline of 10%, due to sales of second hand flats falling by 8.4% and sales of new flats falling by 22.6%. However, in contrast, sales of single-family homes recorded a slight increase, of 0.9%. With regards to price, the price per square metre of the homes purchased in July fell by 3.6%, to an average of 1,274 euros, due to a decline in the price per square metre of single-family homes, of  4.6%, and the price per square metre of apartments falling by 2.3%. Moreover, El Economista reported that the price per square metre of free price housing registered a decline of 1.7%, with the average price of second hand flats standing at 1,399 euros (-1.2%), while new flats had an average price of 1,844 euros per square metre...

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Fixed Rate Mortgages Represent 4.3% of Total Mortgage Balance

Posted by on Oct 2, 2016 in News

According to a recent report from the Spanish Mortgage Association (AHE), in the residential market in Spain fixed rate mortgage loans now represent 4.3% of the total mortgage balance outstanding (as at June 2016). The AHE’s analysis of the Spanish mortgage portfolio, is compiled using data from 12 credit institutions, whose mortgage balance altogether represents 93.3% of the total Spanish outstanding mortgage balance. In terms of interest rates, the AHE pointed out that fixed rate loans have risen slightly, to represent around 6% of the portfolio in June, compared with just 4% in December 2015, while 94% of the portfolio loans have been formed with variable rate mortgages.   The AHE indicated that, specifically referring to residential activity in Spain, 4.3% of the mortgage loans are of a fixed rate type and 95.7% are variable rate loans. The report also notes, according to El Mundo, that there has been a slight increase registered in the average repayment term and in the average loan amount. The average mortgage loan amount stood at 100,754 euros in June 2016, which is 1.4% more than in December 2015, while the average repayment term of the loans in the portfolio increased by 1.6 years over the data for December 2015, to stand at 17.82 years. Read...

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