High-quality Spanish houses to be marketed in the UK

Undaunted by recent data published by the Bank of Spain showing that the number of non-resident house-buyers in Spain fell by 17 percent in the first semester of this year, the international real estate services provider Richard Ellis has just announced the signing of an agreement with Hamptons International. The agreement will enable Richard Ellis to offer Spanish mansions and villas directly to the UK market through Hamptons International.

According to Richard Ellis, the new alliance between these two major real estate companies represents an important added value for Spanish building promotors who work with Richard Ellis, because almost half of all foreign investment in the Spanish housing market comes from British buyers.

The emphasis of the agreement lies with the middle to upper end of the Spanish housing market, such as newly constructed villas or recently-reformed mansions and fincas with special charm.

Major Spanish promoters will now be able to offer their projects to the Spanish and British markets at the same time.

This is the press release as it appears on the website of Hamptons:

Hamptons International and CB Richard Ellis have formed an alliance to market Spanish residential developments. This will combine Hamptons’ experience in marketing overseas property to UK buyers and CB Richard Ellis’ established presence in the country through their offices in Madrid, Barcelona, Valencia, Malaga, Marbella and Palma de Mallorca. The Spanish agreement is a result of the proven success of Hamptons’ joint venture with CB Richard Ellis in the UK.

The Hamptons International and CB Richard Ellis relationship in Spain is part of a new focus for Hamptons’ overseas operations. This will concentrate primarily on new and refurbished residential developments worldwide, as opposed to resales. The company has an experienced team specialising in residential development and investment in the UK whose resources will be used in international markets.

Hamptons and CB Richard Ellis will work together to choose developments which fall within the middle to upper price range and which offer the buyer a second home with a difference whether this be in design, location or the lifestyle it offers.

Jonathan Seal, CEO Hamptons Residential Development and Investment said: “Spain is a natural progression from our residential development activities in the UK as it continues to be the most popular destination for the British buying second homes abroad whether for holiday homes, retirement or investment. We shall continue to look in other countries for similar strategic alliances where we can work with property professionals that are embedded in the national marketplace and which can offer more diverse and interesting development opportunities to our British target market.”

New state property rental agency ready for business in Spain

The Spanish Housing Minister, Maria Antonia Trujillo, yesterday announced that Spain's new public property rental agency is ready for business with 1,500 properties to rent which will be available for rental as from October.

1,200 properties have been registered with the agency by private owners, and the rest are flats and apartments in state-owned buildings.

Trujillo said that several Spanish ministries owned buildings which would be converted into flats and registered for private rental with the state agency. The minister said the agency would use this month to make any last-minute improvements and reforms to the properties on the new register, and to negotiate the rent with owners. She said the rent fixed by the agency would be just below market rates. In October a campaign will get underway to promote the properties and attract tenants.

When the government announced the creation of this new property rental agency in Spain a few months ago, its objective was to rent 1,000 properties during the first year, and 25,000 by the end of the legislature in an attempt to encourage and professionalise the property rental market in Spain.

Related:
The right of tenants to purchase rented property in Spain

Costa del Sol property market may have reached peak

According to an extensive article in Cinco Dias (a Spanish newspaper specialising in news on finance, markets and the economy), the real estate boom experienced along the Costa del Sol over the past few years is slowing down.

According to the paper, property developers operating along the coast in southern Spain have detected a definite decline in the growth of demand for holiday homes this Summer for the first time in six years, in contrast to last year when a record 181,000 holiday properties were sold. High prices and over-built areas mean potential holiday-home buyers are turning away from the Costa del Sol in favour of other destinations.

In declarations to Cinco Dias, Jose Luis Marcos of ROAN, one of Spain's leading real estate consultants, claims that the signs are that the property market is "getting back to normal", and that although the current situation is by no means the beginning of an eventual recession in the holiday-home sector of the Spanish property market, it is time to start being "careful".

According to Marcos, the only "costa" in Spain where sales of holiday homes have slowed down is the Costa del Sol, notably Marbella and Sotogrande. This is not necessarily bad news for the property market because, according to Marcos, in these areas prices had become prohibitive and needed to become more stable.He expects growth in demand for holiday homes to remain stable in general without experiencing any sudden rises such as those experienced in recent years.

Another real estate DBK has published a report referring to the property sector in which it concludes that "following strong growth registered in recent years, we expect there to be a progressive moderation in the number of properties sold in coastal areas in the future" although "there will still be a continued demand attracted by low levels of interest in Spain or high quality accommodation with complementary facilities and services".

Although demand for holiday homes in the Costa del Sol may be slowing down, it is actually increasing in places like Almería(El Toyo, La Garucha y Playa Serena), Murcia (La Manga, Costa Calida) and Huelva.

All the experts consulted by Cinco Dias for the article agree that the concept of holiday homes in Spain is moving towards the "American resort" concept with global integrated services and perks.

House prices in Spain

According to a new report released by the Catalonian Savings Bank (Caixa Catalunya), the price of new houses in Spain will have risen by 16.2 percent by the end of 2005. This means that housing prices have risen at the same rate this year as 2003-2004, contrary to the expectations of some financial analysts at the beginning of the year who predicted a slowing down in the growth rate of Spanish property prices during 2005.

The Caixa's semestral report says that the figure is slightly below the record 16.8 percent growth in housing prices experienced in 2002 in what was a boom year for the property market in Spain.

According to the report, the price per sq. metre of new property in Spain currently stands at 1,777 euros, that is 247 euros more expensive than last year.

The Caixa expects the trend to continue in the short term, despite a marked increase in the number of new houses on the market. 708,000 new housing projects have been undertaken so far this year, compared to 687,000 last year which then was an all-time record. The report also expects the strong demand for new property in Spain experienced in recent years to continue.

Mortgage loans in Spain

As the housing market continues to thrive in Spain, mortgages have become the central core business of Spanish banks around which all other bank activity seems to revolve. Even non-Spanish banks are starting to compete in the Spanish market as the demand for mortgages here just gets higher and higher.

The INE (Spain's National Statistics Institute) has just released mortgage figures for last May which break all previous records in Spain. According to the INE report, in May the total amount of mortgages rose to 20,577 million euros which is 26 percent higher than the same month last year.

The average loan also rose to 135,946 euros, 19.2 percent higher than May last year. And more and more banks are offering clients a mortgage of 80 percent of the property's official value.

Finally, following the trend in other EU countries, the Euribor continues to play an essential role in the mortgage sector in Spain. According to the INE, 97 percent of mortgages signed in May were with variable interest rates dependign on the Euribor and just 3 percent were with a fixed interest rate.

Related:
Mortgages in Spain
Mortgages for non-residents in Spain
Ranking of Spanish banks
Low interest rates in Spain boost housing market