housing market

The increase is the highest one registered in Catalonia over the last year. 3,751 home mortgage contracts were signed in January. At the end of 2012, the fiscal benefits for purchasing houses were diminishing and were non-existent by January. Despite this fact, there was a peak in the number of mortgage loans taken out. For the whole of Spain, the number of mortgage loan contracts signed in January reached 25,447, a 44.7% increase in relation to December last year. This is the highest increase since January 2007. Furthermore, the average price of the mortgages signed in January in Catalonia reached €110,418. In year-over-year terms, the number of mortgages signed in Catalonia in January 2013 was 18.58% lower than those signed in January 2012.

Catalan first instance courts ordered 25,422 evictions last year, representing 25.1% of the total number in Spain. Two weeks ago the European Court of Justice declared the Spanish Mortgage Law to be abusive towards citizens. Home evictions have increasingly become a social drama in Catalonia and in the whole of Spain, particularly over the last two years, as the crisis became harsher. In 2009, a platform to unite people affected by house evictions was created in Barcelona and it has managed to stop hundreds of cases throughout Catalonia and Spain.

The 2,885 housing units sold in Catalonia during December increased by 4% compared to the figures from a year ago. The main reason for this rise is that, in January, the Spanish Government’s tax benefits applied when purchasing a house – approved to reactivate this economic sector after the collapse of the real estate market – will no longer exist. 66% of the houses and apartments sold were second hand, while the other third were newly built. For the whole of Spain, housing sales increased by 2.3% in December. In 2012, house sales dropped by 11.3% over 2012.

The Catalan savings bank, which the Bank of Spain intervened in last September, is selling part of its real estate stock. During the first seven months of 2012, the bank has commercialised 6,700 housing units, 40% more than last year’s same period. Around 90% were sold and the rest were rented. 56% were newly built houses and 44% were second hand properties. Regarding the location, 54% were in Catalonia, 12% in Valencia, 12% in Andalusia and 8% in Madrid.

House sales maintain a decline as results show that sales have fallen by 19% in first half of 2012. Despite the negative overall trend, Lleida and Tarragona saw a boost in sales last month, making up for the reduction in sales experienced in Barcelona and Girona, culminating in a 2.7% overall increase in sales this June for Catalonia. In Spain, the fall in the first half of the year was 21% and in June, in contrast to the increase Catalonia, there was a fall of 11.2% compared with June 2011.

House prices have dropped for 17 consecutive quarters in Catalonia. Last quarter’s drop was the highest since the crisis in the sector began in 2008, falling by 14.6% in the last 12 months. In Spain as a whole, house prices dropped by 11.8%.

A research study carried out by Barcelona’s Universitat Pompeu Fabra (UPF) has concluded that there is a constant trend of decline. Between 2006, when prices peaked, and the end of 2011 Spanish property prices have dropped by 41.7% as average. The coordinator of the study, José García-Montalvo, pointed out that there has been an accelerated fall from the second half of 2010 and the same period in 2011 when prices dropped 19.7% in Spain. García-Montalvo added that this trend would not change in the short or mid- term if the credit market does not recover.

A study by a Catalan savings bank CatalunyaCaixa recommends helping young people to rent empty apartments in order to reduce the stock. The stock is expected to rise to 131,100 houses in Catalonia, while in the whole Spain the figures will reduce to 693,000 by 2015. However the situation is not the same throughout Catalonia, and some places such as Barcelona have a smaller stock in relation.

The lack of satisfactory offers has forced the Catalan Government to postpone its plan of selling several buildings off for cheap and losing money. Selling real estate assets is one of the ways the Catalan Government hopes to increase revenue and reduce the public deficit. Since none of the offers reached the minimum expected, the Government has decided to wait and postpone the sale.

With this label, foreign house buyers can be 100% sure that the new bought property fulfils all the quality and town planning regulations. The Catalan Minister for Territory and Sustainability, in charge of Housing, Lluís Recoder, announced the creation of an official label recognising the “quality of real estate”, in order to offer more legal safety and guarantees to consumers. Recoder hopes this certificate will help the sector, as consumers will be in a safe framework, from a juridical point of view.

In Spain as a whole housing sales dropped by 38%.New-build apartment sales in Catalonia fell by 35% in August, compared to the same month in 2010.

In larger cities, the new housing stock is much smaller and in Barcelona it is almost non existent. However, in other towns and rural areas the current stock will not be completely absorbed until 2015, according to a study from CatalunyaCaixa. Prices will stabilise in larger cities and still drop by 10% where the larger stocks are concentrated. The Catalan housing market is now in better shape than in the rest of Spain. In Catalonia the new housing stock decreased by 2,000 units, while in Spain as a whole it increased by 2%.

During the first three months of 2011, housing prices dropped by 4.5% compared to the same period in 2010. The end of fiscal advantages for property purchase is the main reason behind this drop. The average square metre price in Catalonia is now set at 2,145.2 euros. These prices have not been seen since early 2006 and represent a 14% drop compared with the historic maximum in 2008.

Compared to 2009, real estate sales increased by 21.4% in Catalonia. The Catalan market’s activity triples the Spanish average. However, forecasts for 2011 are no so optimistic due to the VAT increase and the end of the fiscal deduction for purchasing houses and flats.

The average price per square meter was 2681 euros at the end of last year. Catalonia has the third most expensive property market within Spain, after the Basque Country and Madrid.