For the first time since the crisis began, property prices are rising, and new developments getting off the ground, in places on Spanish coast, according to a new report from Tinsa, an appraisal company.
Though prices are still falling, and new building still scarce in most parts of Spain, there are places on the coast where that’s starting to change, reveals a new report – Coastal Homes 2015 – from Tinsa. Cranes be seen on the coastal skyline for the first time in five years, though nothing like the forest there use to be.
In the report, the valuation company explains that in many areas close to the sea, the price adjustment is gradually slowing down and, although still a minority, there are areas where there are signs of recovery in both prices and building activity.
Tinsa studied 140 areas of the coast, and found annualised rising prices in a quarter of them, compared to last year, when just four areas had rising house prices.
The areas with the biggest price increases were Jávea (Alicante, home to the North Costa Blanca), up 11 per cent , and Cartaya (Huelva), up 10 per, with another eight areas posting price increases of between five and nine per cent: Chiclana, Puerto Lumbreras, Adeje, Punta Umbría, Vilagarcía de Arousa, Sentanyí, Soller and La Pobla de Farnals.
“We’ll have to wait until the next quarters to see if this trend continues, or if it’s a one-off rise caused by one of the many particular events that are happening in certain areas, and which affect the local property market, such as aggressive selling tactics on prices, transfers of property portfolios, different strategies carried out by players in the current market, etc. That is to say that we need to bear in mind that these results may be due to one-off events that may deviate somewhat from the trend in the longer term,” Tinsa explains.
The data also shows a bipolar market. Whilst prices are rising in a quarter of areas on the coast, they are falling by double-digits in at least 29 areas, led by Pallafruguell in Gerona province (home to the Costa Brava) where prices have slumped 17 per cent in a year, followed by Barbate (down 15.3 per cent) and Gandía and Ayamonte, both with a fall of 14.6 per cent.
At the other end of the scale, the cheapest propert is found in Almazora in Castellon province’s Costa Azahar (€804 per square metre), which has taken over from Puerto Lumbreras (€823 per square metre) as the cheapest coastal resort of those studied in the report. This resort in Murcia has the same price as Burriana in Castellón province.
Eight years after the Spanish housing market spun into crisis, Tinsa point out that a “significant correction” has taken place. In Casares (Malaga province, Costa del Sol), average prices have gone down by 62 per cent since their peak in 2007. In Ayamonte (Huelva province), Mataró (Barcelona province) and Canet d’En Berenguer (Valencia province), real estate prices have collapsed around 60 per cent.
AFTER CRISIS, RECOVERY
Nothing lasts forever, not even the Spanish property crisis. Tinsa claims to see clear signs of recovery in some municipalities, in particular on the Costa del Sol (Marbella and Benahavis), and the Balearics (Palma de Mallorca, Andratx, Calvia and Ibiza).
“Many areas seem to have reached a turning point regarding adjustment,” says Tinsa. Among them, the following stand out: Torrevieja, Orihuela and Pilar de Horadada in Alicante province; Sotogrande, Conil, Chiclana and Puerto de Santa María in Cadiz province; Nerja, Estepona, Casares and Manilva in Malaga province; and San Juan de los Terreros in Almeria province. Signs of recovery can also be seen in the Canaries along with the south of the Maresme district – the north coast of Barcelona.
The five coastal resorts (excluding provincial capitals) that, according to data from the Spanish Ministry of Development, registered the most transactions in 2014 were Torrevieja with 4,136 sales (up 3.8 per cent year-on-year), Marbella (3,997 sales, up 28.7 per cent), Orihuela (3,527 sales, up 20.2 per cent), Mijas (2,384 sales, up 14.7 per cent) and Estepona (2,113 sales, up 26.6 per cent).
New build sales rose the most in Manilva (up 193 per cent), Marbella (up 101 per cent), Orihuela (up 93 per cent) and Calafell (up 66 per cent), according to data from the Spanish Ministry of Development.
Tinsa report that excess housing inventories are still high but declining in most areas of the coast. The glut is bigges, and its absorbption slowest in Foz (Lugo) Costa del Garraf (Barcelona), Oropesa del Mar (Costa Azahar, thanks to Marina D’Or), Peñiscola, Alcossebre and Xiles in Castellón province; Cullera in the south of Valencia; and Pozo Esparto, El Calón and Villaricos in Almeria province.
At the other extreme, the stock of new-build stock is what Tinsa call “residual” in Tarifa, Barbate, Vejer, Rota, Chipiona and Sanlúcar, in Cadiz province; Pilar de la Horadada in Alicante province; in the south of Valencia; in Marbella; in Cala Panizo (Almeria province), and on the island of Menorca.
The epicentre of the Spanish property bubble was the market for land, which has since crashed and burned. The market is still comatose in many areas of the coast, though signs of life have been observed by Tinsa in the municipalities of Denia and Villajoyosa. Tinsa say that market values are tending to rise now that the landbank stockes owned by banks have practically run dry. Over the last few months, there’s also been activity in Torrevieja and Orihuela involving land owned by Sareb, the so-called bad bank.
Foreign investment funds are looking at operations both around Marbella, and on the Granada coast (between La Herradura and La Rábita), pending confirmation. On the Almeria coast too, between Aguadulce and Nijar, and in Tenerife, viability studies are starting to be carried out on well-located plots with a view to purchase and construction in the medium term, say Tinsa. Investor interest is also significant in the best locations of Mallorca.
When the crisis hit, most new projects underway at the time came to a halt. But in Ibiza, at least half the projects have started gain, say Tinsa. The cranes are also back in action in Alicante province (Orihuela, Guardamar del Segura, Torrevieja, Torre de la Horadada, L’ Alfàs del Pí, Dénia and Villajoyosa, among others); Valencia province (Oliva); Murcia (San Juan de los Terreros); Málaga province (Mijas, Marbella, Estepona and Benahavís) and Cádiz province (Tarifa, Puerto de Santa María, Rota and San Roque).
The new projects brought back to life or started from scratch “tend to be developments with high-end specs in excellent locations (frontline beach), aimed at the foreign buyer,” explain Tinsa. In many cases, the developers are Spanish, although there’s no shortage of foreign estate agents or investment funds who buy developments from the banks, or plan to do so. This type of business can be seen mainly in Andalusia and the Valencian Community.
A good indicator of the imminent level of activity are new-build licences approved by the Spanish Ministry of Development. If provincial capitals are excluded, the coastal area with the highest number of licences in 2014 was Orihuela, in Alicante province, with 702 units, a year-on-year fall of 1.4 per cent, followed by Lorca (440 units, down 4.8 per cent year-on-year), Getxo (435 units, up 625 per cent year-on-year), Torrevieja (398 units, up 52 per cent), Pilar de la Horadada (248 units, down 4.6 per cent) and Elche (185 units, up 153 per cent).
“Albeit at a lower intensity than in these towns, development activity is starting to gradually spread,” says Tinsa. At least 60 places on the Spanish coastline approved new building licences in 2014 after zero applications the previous year.