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Document prepared by:
GuifrĂŠ Homedes Amat @guifre77 2
Rental market Amat Immobiliaris data
Contracts, rents and rotation:
The first six months of 2016 have been characterized by the low supply of rental apartments that are on the market. This is common in all our working areas (Barcelona City, Baix Llobregat and Sant Cugat del Vallès). We could say the lack of product has been extremely high in some months. This has a clear effect on three market factors:
Comparing the same periods of the last four years, 2016 has been the worst in relation to rental contracts made the same period. It had a drop of almost 2% over the same period last year.
Amat Immobiliaris data
Instead, it contrasts with the behavior of rental income, where there is a clear tendency to rise. In Barcelona city each neighborhood rent can vary but in average, the rent has increased. In general, all offices has been increasing slightly over 10%. The average of the monthly rent per m2 is 11.57€, 2% above the average that has published the Catalonia Government in our work area. The price range goes from 800 to 1,500€/month in almost half of the contracts signed.
· Very fast market. · Price stress. · Fewer contracts. Obviously, the intensity of these factors is different depending neighborhoods or towns, but the trend is very similar everywhere. From our point of view, there are various aspects that have influenced the lack of products of rental market:
What has changed is the average time needed to rent an apartment. In 2014 it was about 4 months on average, in 2015 almost 2 months and the first half of 2016, from 1.5 months on average. .
·M any long-term rental has been transformed into legal or illegal tourist rental (basically in the city of Barcelona). Also, a couple of years ago this tourist rental was concentrated in very specific areas of the city but nowadays it has spread to all neighborhoods. ·M isguided policies for owners of rented apartments.
ROTATION
·M isguided policies by the City Hall in order to stimulate public for sale housing instead of public rental housing. · Tenants depleting or renew contracts knowing the limited possibility of improving their homes due to the actual situation of the rental market. Nowadays the stay of tenants has risen from 3.2 years to 4.5 years.
4 MONTHS 2014 2 MONTHS 2015 2016 1,5 MONTHS
· Wrong taxation relate to rent (deductions were abolished in early 2015).
MARKET REPORT - 1st semester 2016 - Amat.
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Selling market Amat Immobiliaris data ·B arcelona: It is the area where in this period we have had less activity than the previous year. Still, the average price is at a higher range which had been the previous years, currently above 500,000€. The market behavior in areas where we work was as follows:
In this report we focus again on differentiate between New Construction market and Secondhand Market due to the significant activity increase of the New Construction segment. In Second Hand market we have made 5% more transactions compared to the same period last year. If we take into account both, New Construction market and Second Hand, this increase in operations would be 50% over the previous year.
– Diagonal Mar: it remains being an area of low stock available and high demand. Prices remain high, in our case, the highest in all areas where we have sold this 2016.
In all areas where we work the Second Hand market continues marked by a lack of product, a bit like is happening in the rental market. So the market is fluctuating a bit. When there is a good portfolio with properties at market price and there is a proven demand, sales are activated. Whereas if there are properties in price ratios where demand is much lower, sales slow down.
– Sant Gervasi: it remains being a very active area. In this area, the condition and the characteristics of the housing has a lot of influence on the price. On average, sales of this semester of 2016 have been at a higher price than the previous year’s price. The average impact was 3,800€ m2 built but in a range that goes from 2,600 to 4,800€/m2.
It should be noted that there is a financing offer exceptionally competitive in order to purchase housing and it benefits both the Second Hand market and the New Construction, and it is one of the major drivers in the market recovery.
– Gracia: in this district we have maintained a level of sales and prices almost unchanged from the same period last year. – Eixample: as happens in Sant Gervasi the price can be very variable in the same district. In this case, more because of its location than for its condition. The average impact has remained stable compared to previous years and is located in a range that goes from 3,200€/m2 to 5,400€/m2.
If we analyze the Second Hand market in terms of our offices, there are different behaviors: ·S ant Cugat del Vallés: Perhaps the area where the market has changed more significantly, both in number of transactions and price increases. Clearly, the first half has been sold in ranges of price much higher than in the same period last year, from an average price of almost € 350,000 at an average price of almost 600,000€. The average price impact is up 15 % over the same period last year.
Flats sales has accelerated slightly over the same period last year. In 2015 we had the second-hand rotation centered at approximately 6 months and the first half of 2016 has been 5 months. As we have noted before, today financing is highly competitive; the first half 55 % of Second Hand buyers have obtained it. This is a similar percentage of the same period last year.
·S ant Just Desvern y alrededores: This area has also experienced an improvement, but much lighter. The average selling price remains close to 400,000€. Repercussion prices have been maintained similar to the same period of the previous year and the activity has increased approximately 10%.
As always emphasize, these are our data and are marked by the stock of available properties at our disposal.
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MARKET REPORT - 1er semestre 2016 - Amat.
New Construction: Amat Immobiliaris data From our point of view, the first half of 2016, especially from April, in New Construction marketing plan is where there has been one of the major changes in the housing market, although during 2015 we noticed a change basically centered in the city of Barcelona and in some small projects in the first residential crown.
·H igher rhythm of sales; more than 10 properties per month. · 1 00% of national buyers. ·5 4% of buyers are in their 40’s or under. ·7 5% intend to finance the purchase.
What characterizes this new market scenario? ·M ost buyers of each new development live close to it. · Large-scale projects. · A significant number of buyers are currently renting. ·M any focused on the first residential crown of Barcelona, and not only in the city.
Although these data are especially positive, we believe that these results are because of there is moderated sale prices and people can actually afford them.
•S everal competing in the same areas, developers are no longer isolated projects.
Even so, one of the data is not entirely positive. The Effort for Homeownership which measures the ratio between the price of housing and gross annual household income, is 6.93 years in the first half of 2016. As shown in the graphic, is within the average values of recent years (6.3 in the 3rd quarter of 2015 according to the Bank of Spain). And yet the drop in housing prices during the crisis, this index is still above what is considered acceptable (between 3 and 4.5 years), which may indicate that the main problem is the salary freeze or salary reduction more than the housing price.
•F ocused on the domestic buyer. •A s we said before, very competitive financing offer (although to delivery of the property will not be effective). In Amat Immobiliaris we are lucky to market three major projects in Badalona, Sant Cugat del Valles and Sant Just Desvern, and two smaller in Barcelona. Conclusions we can draw from these two and a half months marketing are:
Accessibility mesures %
Years
80
10
70
9 8
60
7
50
6
40
5
30
4 3
20
2
10 0
1 2004
2005
2006
Home prices/ RBD per Home
2007
2008
2009
2010
2011
2012
Annual theoretical effort without deductions
2013
2014
2015
2016
0
Annual theoretical effort with deductions
Source: Banco de España
35% of the buyers are employed, 26% Liberal Professionals, executives or entrepreneurs, 17% officials, 15% freelancers and 7% are retired. Recently, several media have highlighted that Second Hand market activity is above the New Construction market. It’s a must specify that the sales increase of New Constructions is not reflected in official data because the document underpinning these transactions is not a deed of sale (which accesses the Registry of Property and therefore is a public data), but is based on purchase and sale contracts that remain private between the two parties. Until the day of deed is done and the delivery of the property (within 18-24 months) will not be officially counted.
MARKET REPORT - 1er semestre 2016 - Amat.
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new constrution buyer’s profile ORIGIN OF THE BUYER
75%
100% National buyers close to new construction developments
OPERATIONS FINANCED
FINANCeMENT
20,5% 40-50 years
54% < 40 years 13% 50-60 years
12,5% > 60 years
BUYER AGE
Employees liberal professionals, executives, businessmen
35% freelance
Official
retired
17% 26% 15% 7% level professional
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Marketing Day after day we improve our knowledge, we learn and put in practice new marketing and sales techniques.
INTERVIEWS · We mantain a close relationship with our costumers and colleagues of our environment · We participate in real estate worldwide congresses and fairs
Maintain, strengthen and increase this relationships allow us to: Knowing our clients better in order to offer what they seek, learn from our colleagues success, reinforce and increase our international network, increasing the chances of attracting new customers to the properties we sell as well as being a referral agency in Barcelona for many other real estate companies worldwide.
NEWS · Press and TV interviewed us as market experts
Memòria Amat 2015
SOPARS
ENTORN
IMMOBILIARI
2009-2016
They know we analyze our market, we remain constantly updated about what is “cooking” in the sector and reflect on the current situation.
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Barcelona. Balmes, 345 · Sant Cugat del Vallès. Rambla Can Mora, 10 · Valldoreix. Plaça Can Cadena, 2 · Sant Just Desvern. Bonavista, 63-65
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