Eighteen Consecutive Months of Growth in Spanish Property Market
The latest data released from Spain’s General Council of Notaires shows that residential property sales in the country increased by 7.3% in November last year, compared with the same month in 2014.
The figures show just over 18-months of continuous growth in Spain’s real estate sector, reflecting increasing buyer interest in the country, set to extend well into 2016 and beyond. Furthermore, analysts believe growth is sustainable, with price growth stability.
A breakdown of the data shows that apartment sales increased by 6.2% year-on-year, more than double the increase recorded in October 2015. This was largely due to transaction volumes of new apartments which increased by 8.3% and resale apartments 12.2%.
Sales of individual family homes also saw strong growth, up 11.4%, recording nine months in a row of double digit increases. However, sales of new housing fell for a tenth month in a row, down in November by 18.6%.
In the new-build market, the issue holding back price growth is lack of supply. This dynamic is slightly misleading however, as there is a vast supply of unfinished and empty housing stock across Spain that is mostly held in bank inventory.
As this inventory is released and made available to buyers, it could serve to prevent Spain’s property market from overheating in the face of significantly increased buyer-interest. In the meantime, the supply issue is likely to affect price volatility in certain regions of the country.
The average price of homes sold in November was €1,219/m2, a fall of 1.1% year-on-year. A breakdown shows that apartment prices fell by 0.6% and the price of individual family homes fell by 0.8%. The data also shows that the price per square metre of second hand apartments fell by 0.7% year on year to €1,320 although new apartments increased by 5.9% to €1,666.
The total number of new mortgage loans also increased by 7.3% year on year in November but in seasonally adjusted terms this figure moderates to an increase of 2.4% year on year, the lowest increase in 18 months.
Spain’s economy remains hampered by high unemployment rates and a significant public deficit. However, tourism has been booming in the country and its contribution to the economy continues to grow. In the regions of Spain popular with holiday home buyers and investors, property prices are set to continue to rise throughout 2016, albeit at a meandering pace.
As with all property markets, there are anomalies that present themselves as opportunities for value growth and savvy investors can still find such opportunities in Spain.
Article by +Roxanne James on behalf of Propertyshowrooms.com
UK BTL Investors Face Significant Challenges in 2016
Despite the fact that demand still outstrips supply in British buy to let markets, government measures are set to change the landscape of the property investment market to slow down purchases of second homes.
As from April this year, buy to let investors in the UK will have to pay an additional 3% stamp duty surcharge. In real terms, this will add a further £3,000 to BTL investors’ tax bills to the purchase of a £100,000 home that would ordinarily be exempt from stamp duty. For properties purchased at £250,000, the tax bill amounts to no less than £7,500, bringing the total obligation to £10,000.
The measures are set to curb the rapid growth of private investment in UK property markets and extend to all second-home buyers in the country. According to Reuters, BTL transactions made up a quarter of market activity last year, far more than in most other advanced economies and a major cause of spiralling prices.
There is a rising voice of descent among younger first-time buyers struggling to get their feet on the property ladder as private investment reduces affordability. The inability of the younger generation to buy principal residences has also increased pressure on social housing, already experiencing supply shortage at critical levels in some UK regions.
Earlier this month, the Council for Mortgage Lenders revealed a late surge had pushed buy to let lending up 35% year-on-year in November as investors look to act before the new tax comes into force. New figures from the Royal Institution of Chartered Surveyors (RICS) reveal buyer enquiries were at a three-month high in December, driven by demand from would-be landlords seeking to complete before April.
The surcharge is not the only tax change hitting buy-to-let. In his earlier budget last July, Osborne announced that investment owners would be restricted to a flat 20% rate of relief on mortgage interest, effectively halving relief for higher-rate taxpayers. Investors and second home buyers will also be assessed for tax before the relief is deducted, pushing more into the higher rate bracket.
Although it is predicted that there will be a slowdown in the BTL sector from April, there are certainly no signs that momentum is declining in the market. RICS did note however, an increase in new instructions in December for the first time in almost a year, a sign that landlords could be seeking to exit the market due to concerns about yield.
If investor interest does wane after April, it should serve to remove some of the heat from the housing market and slow price growth although there is bound to be a period of adjustment to improve affordability for first-time buyers in the UK.
Article by +Roxanne James on behalf of Propertyshowrooms.com
International Hotel Brand Announces its First Luxury Hotel in Portugal
Meliá Hotels International and Discovery Fund have signed a joint agreement that will see Europe’s third largest hotel chain open its first luxury hotel in Lisbon, Portugal.
The Meliá lisboa is part of an ambitious project that aims to return life to a strategic location in the city, with the hotel set on the corner of the central Antonio Augusto de Aguiar and Fontes Pereira de Melo avenues.
The hotel will open in early 2018 with 239 rooms, a 24-hour restaurant adapted to the lifestyle needs of guests, and a panoramic lounge-bar on the upper terrace with stunning views of the city.
The hotel is set to follow the ‘bleisure’ (business and leisure) concept, providing everything needed by guests visiting Lisbon for a combination of business travel and leisure, while also giving local residents a meeting point where they can ‘see and be seen’, with attractive options for dining, drinks and music. Meliá Lisboa will feature modern facilities for conferences and conventions for between 50 and 550 people, two floors of parking, and a health club and Yhi Spa, the chain’s spa brand.
Portugal is considered one of the most important destinations for European tourism and with a growing strength in urban hotels; the Meliá Lisboa is set to mark the group’s continued growth in Portugal. The hotel chain is working closely with Discovery Portugal Real Estate Fund who are focused on real estate and tourism assets management in Portugal.
Pedro Seabra, partner of Discovery Fund, highlighted the importance of the agreement in bringing an international brand into the hotel’s management:
” This alliance and the Melia Lisbon’s project represent the continuation of the excellent work of the Discovery team, with the aim of revaluating the Fund’s assets, ” he said. ” We are also excited to be able to count with the best professionals to make this project a successful reality from 2018 “.
Gabriel Escarrer, vice chairman and CEO of Meliá, added: ” We are very excited about the Meliá Lisboa because it combines architectural innovation in a hotel with the highest standards of quality and service, with the history of such an emblematic corner of the city of Lisbon, with the attractiveness that you only find in the centre of the great historic capital cities in Europe “.
Portugal remains one of the most popular destinations for property investors in Europe and despite some economic and political instability in recent years, considerable growth now seems to be back on the agenda for 2016.
Article by +Roxanne James on behalf of Propertyshowrooms.com
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