As one of the most moribund housing markets in Europe, Spain has become a magnet for global bargain hunters. Real estate prices are down as much as 50 percent from their peak during a housing bubble, and investors from Asia to the United States and Britain are flocking to Spain to try to catch the uptick.
British Airways flights to Madrid are packed with London-based real estate executives. The hedge fund Baupost is buying shopping centers, Goldman Sachs and Blackstone are buying apartments in Madrid, and Paulson & Company and George Soros’s fund are anchor investors in a publicly listed Spanish real estate investment vehicle. Kohlberg Kravis Roberts just bought a stake in a Spanish amusement park complex. Big-name private equity firms and banks are teaming up with and competing against one another on huge loan portfolios with names like Project Hercules and Project Octopus.
...continue reading "Spain: Magnet for Global Bargain Hunters"
The downward trend in the property market in Spain is drawing to a close and it is unemployment that is hindering a full recovery, according to the International Monetary Fund.
With unemployment still hovering around 26% the real estate sector is unlikely to move into full recovery mode just yet, says the report author James Daniel, head of the IMF’s Spain mission.
But the report does point out that the country’s economy has ‘turned the corner’ after economic improvements took hold in the second half of last year and continued in the first quarter of 2014. Indeed, it adds that the Spanish economy is now growing at its fastest pace since 2008.
It also says that labour reform and wage moderation are helping turn job destruction to job creation. Compared to a year before, unemployment fell in the first quarter of 2014 and jobs, as measured by social security affiliations, increased by about 200,000 in April.
...continue reading "Spanish Property Market is on the Verge of Recovery"
The number of court-ordered home evictions for non-payment of mortgages, rent or other legal reasons reached 67,189 last year, according to judicial statistics released on Friday.
The number of open cases – pending eviction requests – stood at 82,860, which is 9.8 percent fewer than the previous year, said the General Council of Judiciary (CGPJ) legal watchdog in its annual report.
Of the total number, 38 percent were due to non-payment of mortgages while 57 percent were for non-payment of rent. Another four percent were for other causes. The figures reflect an average of around 184 evictions per day in 2013.
A breakdown by regions shows that Catalonia had the most evictions last year (23.8 percent) followed by Valencia, Andalusia and Madrid.
...continue reading "Home evictions averaged 184 a day in Spain last year"
House prices in Spain will continue to fall during 2014 and bottom out in 2015 when the demand for housing is likely to improve, according to a new analysis of the nation’s residential real estate market.
The report from Fitch Ratings points out that according to figures from the Housing Department the Spanish house price index (HPI) reached a peak year on year decline of 10% in December 2012 and fell by an additional 2.3% by the third quarter of 2013 which means that overall, the HPI has fallen by almost 30% since the onset of the financial crisis.
Despite the deceleration of house price decline, Fitch predicts that prices will continue to fall during 2014 and bottom out in 2015. It says that the house price decline will be driven by an estimated property overhang of above one million units.
The report also points out that during 2013 banks become increasingly willing to offload retail residential assets at deep discounts. Fitch expects this trend to continue, which, combined with the initiation of the commercial activity by the asset management company SAREB in the middle of 2013, will continue to put significant pressure on house prices.
...continue reading "House Prices Keep Falling in 2014"
Spain’s Constitutional Court has suspended - provisionally - the law passed by the Junta de Andalucía in October to prevent families with limited financial resources being evicted from their homes.
The law, described as a measure to ensure the social function of a property, allowed the authority to temporarily expropriate the use of a property repossessed by a bank so that its original owners could still live in it.
The Constitutional Court has admitted the central government appeal against the law designed by the Junta de Andalucía to ease home evictions by temporarily expropriating the use of houses seized by banks and allowing their owners to continue living in them.
The Andalusian law was passed on October 1st and revoked a previous decree on the same matter which had been passed in April and was also the subject of an appeal on grounds of it being unconstitutional.
...continue reading "Andalucía’s Anti-eviction Law Suspended by Court"