A summary of the main Spanish property news stories last week.
- The number of homes advertised for sale fell 5% in the first quarter (YoY) according to Spanish property portal Idealista, based on analysis of its own database. Homes for sale fell by 25% in Alicante, 20% in Valencia, 16% in Palma de Mallorca, 11% in Barcelona and 9% in Malaga, but increased by 4% in Madrid.
- The number of homes on the rental market in Spain has declined 28% in the last four years (since Q1 2019) led by Barcelona with a 51% decline, compared to a 44% decline in Madrid, all according to Idealista. Over the same period Barcelona rents have increased by 16% to 18.4 €/sqm/month, the most expensive in Spain. In comparison, rents in Madrid have risen 5.1% to 16.2€/sqm. Rental listings at Spain’s biggest property portal have fallen from 36,600 in Q1 2019 to 17,700 today.
- Squatting declined in the first quarter, with 3,898 new cases reported to the police in Q1 compared to 4,385 last year, down 11%, with 43% of cases located in Catalonia. However, the figures should be taken with a pinch of salt because reporting squatters to the police is ineffective in Spain, so many owners use extra-judicial methods like paying extortion money to get squatters out.
- With local elections just around the corner in May, Spanish president Pedro Sánchez announced another 20,000 affordable homes to be built on land belonging to the Ministry of Defence, though the plots have not yet been identified. Critics say these homes won’t be ready for years, if at all.
- After more than a year of logjam Spain’s controversial new housing-bill is racing through parliament to be ready before local elections in May. The lower house of parliament approved the bill this week, which now goes to the Senate for final approval. The Governor of the Bank of Spain has said the bill “could have negative consequences on the supply [of homes for rent]”. Read about Spain’s new housing-bill.
- The spread between fixed-rate mortgage interest rates (2.96%) and variable rates (2.70%) shrank by 15 basis points from 0.41 to 0.26 between January and February, according to data from the INE, making fixed-rate mortgages more attractive. That said, fixed-rate mortgages dipped slightly from 67.4% of new mortgages to 65.7%.
- The Socialists faction of the government have rejected the legislative proposal of the Communist faction (Podemos) to cap variable-rate mortgages, which would have rewarded variable-rate borrowers at the expense of fixed-rate borrowers and lenders. They also rejected a Podemos proposal to regulate holiday-rentals in the national housing-bill, arguing that local authorities already have that power.
- Lender Bankinter forecasts that house prices and sales will fall for the next two years (prices down 3% this year and 2% next year – a total real decline of 12% – and sales down 14% and 7% respectively) in response to higher interest rates, lower household savings, and declining rental returns.
