Our figure of the month: 10 €
The January 2020 figure for real estate in Spain: 10 euros, the price of accommodation in Valencia!?
News for January 2020. Each month, we present you the most recent real estate news. You can benefit from the main indicators and the most recent information to buy better in Spain.
Editorial: 2019, the year of market breaking laws
The implementation of two laws had a negative impact on the Spanish residential property market in 2019. First, there was the new Rental Law (Real Decreto-ley 7/2019, de 1 de marzo, de medidas urgentes en materia de vivienda y alquiler) entered into force in March 2019 and intended to protect tenants: extension of the duration of contracts from 3 to 5 years (7 years for legal persons), indexation of rent increases on the CPI, maximum of 2 months of guarantee and 1 month of deposit… Result after 9 months of application: frightened the owners have subscribed en masse to insurance against unpaid debts or have withdrawn their goods from the market, and above all rents have increased by 5% on average! Then there was the new Mortgage Law, which came into force in June 2019. This law aims to give more security and transparency to customers and banks. It significantly increases the work of bankers and notaries without giving them additional financial resources. On the contrary, since the banks now bear part of the costs that were due to customers. It was implemented in a total lack of preparation on the part of banks and notaries against a backdrop of controversy over a choice of telematic server! In short, these two laws had the consequence of breaking the real estate market in the middle of the year and it became “normal” only at the end of the year. Everyone at the start of 2019 agreed on growth of at least 5% in business volume. In the end, the annual balance will be closer to 0%. The year 2019 is dead, long live 2020!
Our gift for 2020: an apartment in Valencia for 10 euros!?
The Valencian real estate company Líder Today is organizing the first lottery with the price of an apartment in Valencia. The initiative aims to introduce another alternative in the real estate sector for families to access housing at a symbolic cost of 10 euros, the price of each participation ticket. The draw apartment has an area of 85 square meters with three bedrooms, a bathroom, a fully equipped kitchen and a terrace. Reformed, it is located in one of the main arteries of the city, with all the services and shops. The draw will take place before a notary and will be published on social networks and the official website of the real estate company on June 5, 2020. The only problem, in our opinion, is that this kind of draw is… illegal!
0.2% of owners have 10% of the housing stock in Barcelona!
According to the Barcelona Metropolitan Housing Observatory (L’O-HB), the Catalan capital has 774,000 dwellings belonging to 512,000 taxpayers. The largest taxpayers by volume, 1090, total 75,770 dwellings, or 70 dwellings on average per taxpayer. 50% are legal persons (companies) which have on average 74 dwellings, 44% are individuals who have on average 42 dwellings. Note that 11 are administrations which manage an average of 1080 dwellings. The others are associations, religious institutions or communities of owners.
SAREB sells 2,650 “village houses”
SAREB (company grouping the majority of toxic property assets of banks) launched the campaign “village houses” (“casas de pueblo“) to stimulate the sale of 2,653 houses and apartments, from 29,000 euros, in small cities in all of Spain. The company, which has a large number of assets in sparsely populated areas, aims with this campaign to stimulate real estate activity in regions and municipalities where the market evolves at a slower pace than in big cities. These homes are located in 500 villages in Spain. 635 are located in Castilla-La Mancha, 404 in Catalonia, 323 in Castilla y León, 313 in the Community of Valencia and 258 in La Rioja. More than a hundred are less than 50,000 euros.
Catalan justice bans 11,700 Airbnb homes
11,700 tourist accommodations announced in Catalonia on the Airbnb platform will have to be removed from the site for non-compliance with the tourism regulations of the Catalan government. The Superior Court of Justice of Catalonia (TSJC) rejected the appeal brought by the American company and gave the reason to the General Direction of Tourism of Catalonia. These apartments were in violation of the requirement to have a tourist registration number to prove their legality. Either they did not have a number (5,300) or their number was wrong (6,400). The majority of these announcements were in Barcelona. Airbnb should file a cassation appeal.
Airbnb is not a real estate agency according to European Justice
The Court of Justice of the European Union (CJEU) has considered that Airbnb is an “information society service” and should not be regulated according to the rules which apply to real estate agents because, inter alia reasons, the platform does not set the rental prices. According to the Court, “Airbnb, in exchange for compensation, puts potential tenants in contact with the owners”.
The office market is exploding in Barcelona!
If the Barcelona residential market is lagging behind, this is not at all the case of the office market which in 2019 is in the best shape of the last 20 years, with a doubling of the activity compared to the last 5 years. The Catalan capital ended the year with a record 1.7 billion euros in investment in the office property market, 75% of which came from abroad. In 2020, demand will still be high when supply is not sufficient. Madrid ended the year with 2.5 billion euros in investments in this sector.
10.4 billion euros in professional real estate investments in 2019
The year 2019 ended with 10.4 billion professional real estate investments in Spain. The first sector, that of offices, reached the sum of 4.5 billion euros, a figure up 75% compared to 2018! Next come the hotel sector with 2.5 billion euros, the logistics sector (€ 1.8 billion) and the commercial sector (€ 1.6 billion, a drop of 60% compared to 2018).
Confidential and Express News in January 2020
- After the drop in prices for residential property recorded in Madrid and even the fall in Barcelona, prices also seem to have peaked in privileged areas, such as Ibiza and Marbella.
- The General Council of Notaries noted a 1% drop in transactions in October 2019 (50,176 sales recorded) compared to 2018. This is the result of two opposing trends: 10.1% increase in transactions in new buildings and drop of 3.3% in the former.
- The Council of Ministers approved the Royal Decree providing for the extension of the deadline to December 31, 2020 of the urban rehabilitation program (ARRUs). This concerns 190,000 dwellings in 240 urban areas.
- The IRAI property register index, which measures residential real estate activity, fell sharply in the third quarter of 2019 for the first time in five and a half years.
- The government of the Basque Country has decided to reserve 40% of the rental housing stock for young people under the age of 36.
- The number of court evictions decreased by 11.9% in the third quarter of 2019. 68% of these evictions involved rentals.
- After Amsterdam, Copenhagen or Vancouver, the city of Barcelona built its first social housing from containers. Advantage: 4 months for the on-site installation of housing elements manufactured outside in recycled maritime containers.
- According to the Bank of Spain, the percentage of households owning their main residence increased from 75.9% to 80.4% between the end of 2014 and the end of 2017.
- Given the shortage of offers and the high rental price, the student residences market will continue to grow rapidly in 2020. Existing residences have an occupancy rate of 100% over 11 months a year!
- 2020 real estate trends will be centered around accessibility, sustainability, and adaptability. In Spain, the most buoyant real estate markets will be offices, student residences, retirement homes and co-living (“living and operative”) spaces.
- The number of real estate startups (“proptechs”) in Spain has increased by almost 30% over the past year, from 260 to 340 and generating more than 5,500 jobs in total.
- Housfy, the almost commission-free real estate agency (€ 3,990 if the property is sold), multiplied its sales by 2.5 times in 2019 reaching 1.6 million euros. The 2010 objective: to approach 5 million €!
- After the partial revision of the cadastre approved in late December 2019, the IBI (property tax) is expected to increase in 16 provincial capitals (notably Valencia, Seville, Girona, Granada and Cadiz) and will decrease in 3 others (including Castellon and Zaragoza).
- The Ministry of the Economy is finalizing the royal decree to approve the 2020 Statistical Plan which does not provide for the creation of an analysis of housing rental prices … yet provided for in the Rent Act of March 2019, which would have made it possible in particular a framework for rent prices.
- But the government agreement signed between the PSOE and Unidas Podemos in late December offers measures to municipalities to limit rental prices. Other measures planned: more constraints for tourist rentals, increase the public rental park, encourage the rental of vacant accommodation.
- The Madrid municipality has already reacted by saying that it would not impose a price limit on rents, given the ineffectiveness of this measure in other European cities.
- Over the past four years, foreign investors have invested € 29 billion in Spanish property across all sectors. But the attraction for Iberian goods is starting to wane.
News in January 2020
Buy in Spain at the best price
safely and securely.
Call on a real estate advisor.
With more than 20 years of experience in real estate acquisition procedures in Spain, we are at your disposal to assist you with all the necessary steps from the search for a property to services offered after the acquisition. When you are buying a home in Spain we help with organizing the visits of properties, the legal verification of the properties, the obtaining of a mortgage, the administrative procedures and the signature of the different notarized documents.
Do not hesitate to contact us!
Send an email to firstname.lastname@example.org