Intermoney | The Government of Pedro Sánchez plans to invest €1,000 million euros from the European funds against the pandemic in the promotion of social rental housing. Specifically, they will use this amount to complete a portfolio of 20,000 social housing units, coordinated by the Ministry of Transport, Mobility and the Urban Agenda.
When it comes to improving the rental market, the parties in the government coalition, PSOE-Unidas Podemos, have very different conceptions. Both agree to include mechanisms to help control rental prices on an ad hoc basis and in the most stressed areas, but Pablo Iglesias’ party is demanding the establishment of limits on rental market prices, while the socialist part of the government has confirmed that they prefers to fiscally stimulate those owners who rent below the prices set by reference indexes.
The housing stock in Spain would be estimated at 4.1 billion euros in the hypothetical case that all the homes were now on the market, which is a figure over three times higher than national GDP (1.2 billion). This is according to a study by the real estate website Idealista, in which all the houses recorded in the property register are valued at current prices.
Intermoney | Real estate investment in Spain should increase by up to 25% this year compared to 2020, says a report by CBRE. So investment would be some €12 Bn in 2021, not including corporate operations like the purchase of Quabit by Neinor. However, CBRE expects uncertainty will remain during the first part of the year at the expense of progress in the pandemic vaccination process. Areas such as rental housing, logistics, and other assets such as student and nursing homes are expected to remain on the rise.
Banca March | The Neinor group yesterday announced the absorption of its listed rival Quabit, creating a giant in the residential development sector. The group resulting from the merger will have a land portfolio with a gross value of some €2 Bn for the development of 16,000 homes. Also a gross development value of some €4.5 Bn. The operation will place Neinor behind Metrovacesa and Aedas in Spain’s real estate ranking. Metrovacesa has land valued at €2.626 Bn for the development of 36,000 homes, while Aedas has a land bank of approximately €2.16 Bn or 15,700 homes.
Continuing the negative trend already observed in 2020, when this type of asset depreciated by 3.7%, housing prices could fall 5% in 2021. On the other hand, a certain recovery in the volume of sales and purchases is expected this year, with up to 480,000 transactions compared to 450,000 last year; in 2019, almost 570,000 property sales and purchases were recorded.
CaixaBank Research | The Recovery, Transformation and Resilience Plan (PRTR) for the Spanish economy could be an important catalyst for the real estate sector. With the help of European funds, the government plans to recondition half a million homes between 2021 and 2023, with the aim of improving their energy efficiency and thereby helping to achieve the agreed decarbonisation targets. The General State Budget (PGE) also proposes a notable increase in the funds allocated to housing policies.
Even though SOCIMIS have played a leading role in the Spanish real estate market since 2013 , as a result of Covid-19, their market value has dropped to €21.268 Bn, a decline of more than 17% against the end of 2019. In addition, these vehicles have benefited from a tax regime adapted to that of traditional REITs. Now, however, the government could impose a tax burden of 15% on them, which would damage cash flow and increase the risk premium associated with investing in real estate assets in Spain, say Banco Sabadell analysts.
Indicators for the real estate market show a significant recovery in activity in the sector, following the standstill during the state of alarm. On the demand side, home sales recovered well in July and increased by 20% month-on-month, although in cumulative terms for the year to date there is still a year-on-year decline of 25.8%. On the supply side, the construction sector has also quickly restarted its activity. In August, cement consumption was only 2.1% below the level of August last year, with a notable recovery from the 50% fall registered in April.
The coronavirus pandemic forced a high percentage of Spaniards to telework. Despite this figures has been declining as the social distancing measures have been lifted, many firms are already considering the option of offering their employees a more flexible way of working, combining days working face-to-face in the office with working remotely. Iin this article experts at CaixaBank Research will analyse its implications for urban mobility and, from a longer-term perspective, for the residential real estate market.