{"id":340,"date":"2014-05-28T09:07:51","date_gmt":"2014-05-28T09:07:51","guid":{"rendered":"http:\/\/kme.com.cy\/?p=340"},"modified":"2014-05-28T09:43:38","modified_gmt":"2014-05-28T09:43:38","slug":"spain-sees-embers-glow-in-wreckage-of-property-crash","status":"publish","type":"post","link":"https:\/\/kme.com.cy\/?p=340","title":{"rendered":"Spain Sees Embers Glow in Wreckage of Property Crash"},"content":{"rendered":"

\"spain-sees-embers-glow-in-wreckage\"<\/a>Within the ashes left by Spain\u2019s real-estate crash, some embers are glowing.<\/p>\n

As the recovery in euro-region\u2019s fourth-largest economy extends and its record unemployment subsides, the property market whose slump locked the country into a recession is showing signs of life. While home-price data isn\u2019t yet signaling a turnaround, an increase in sales indicates values may be starting to stabilize.<\/p>\n

The market is now safe enough for Stanislas de Bellescize, a 44-year-old computer programmer who recently took the plunge and bought a house two subway stops from the affluent Salamanca district in downtown Madrid. More such decisions would offer Prime Minister Mariano Rajoy the prospect of a further pillar on which to build Spain\u2019s revamped economy after more than half a decade of misery.<\/p>\n

\u201cWe thought this is the right moment,\u201d said de Bellescize, who has found new work after losing his previous job last year. \u201cThere is still room to negotiate prices.\u201d<\/p>\n

First-quarter house prices and mortgage approvals for March are due to be published on May 28. Economists surveyed by Bloomberg News forecast the data will show the smallest decline in values since 2010.<\/p>\n

Pent-Up Demand<\/h2>\n

\"\" <\/a>\u201cA stabilization of prices is on the horizon for 2015,\u201d Jesus Castillo, a Paris-based economist at Natixis, which forecasts declines will slow to an average 2 percent next year from 4 percent this year.<\/p>\n

\u00a0 <\/a>
Photographer: Angel Navarrete\/Bloomberg <\/figcaption>
\n

The sun shines over a stalled real estate construction site in Arroyomolinos.<\/p>\n<\/div>\n<\/figure>\n

Evidence of green shoots in the market are emerging. Spain\u2019s General Council of Notaries said earlier this month that home sales jumped more than 45 percent in the first quarter from a year earlier.<\/p>\n

\u201cPent-up demand from buyers who\u2019d been holding off is now coming to the market,\u201d said Juan Villen, head of mortgage lending at Idealista.com, Spain\u2019s largest property website. \u201cThey realize prices won\u2019t fall much further and the economy won\u2019t get any worse.\u201d<\/p>\n

Further releases this week, including April retail sales and first-quarter gross domestic product, may show stronger growth as households loosen spending slashed amid the toughest austerity measures in the nation\u2019s democratic history. The GDP data will probably confirm economic expansion accelerated to 0.4 percent from 0.2 percent at the end of 2013.<\/p>\n

Boom Legacy<\/h2>\n

Spanish bonds advanced today on speculation that the European Central Bank will increase economic stimulus next month. The yield on Spain\u2019s 10-year benchmark bond fell 10 basis points to 2.89 percent in Madrid. That compares with a euro era record of 7.75 percent in July 2012, when the country was forced to seek aid from European Union peers.<\/p>\n

As buyers re-emerge in certain parts of the country, prices, which have dropped an average of 47 percent since the peak in 2007, are starting to increase in cities such as Barcelona, the second-largest, according to Idealista.<\/p>\n

In southern-eastern Valencia, the epicenter of the decade-long construction boom and subsequently among the regions worst hit by the crisis, the local association Fevec says builders are being asked to complete hundreds of unfinished homes which landed on the books of Spain\u2019s bad bank, known as Sareb.<\/p>\n

Valencia accounts for close to a fifth of Spain\u2019s 1 million empty homes. Those vacant properties are a legacy of the unbridled building of almost 700,000 houses a year between 1997 and 2006, more than France, Germany and the U.K. combined. Last year, there were 43,600 homes completed in Spain.<\/p>\n

Investors Gather<\/h2>\n

\u201cIt\u2019s not only foreigners anymore, we\u2019re actually getting calls from people in Madrid,\u201d said Jesualdo Ros, general secretary of Provia, the builders association in Murcia, south of Valencia. \u201cIt\u2019ll take time but residential tourism will eventually help to revive local real-estate demand as well.\u201d<\/p>\n

The improvement is already attracting investors such as Blackstone Group LP (BX), Goldman Sachs Group Inc (GS) and Azora Capital SL, which last year bought apartment blocks and social-housing developments from local authorities in Madrid.<\/p>\n

Investment in Spain by funds, private-equity firms and other financial-services companies more than doubled to 13.9 billion euros ($19 billion) last year. About 37 percent of that went into real estate assets, according to debt-restructuring firm Irea, which expects the proportion to increase this year.<\/p>\n

Economists including Souheir Asba at Societe Generale SA in London expect mortgage lending to start recovering toward the end of the year as banks — which forced Spain to seek a 40 billion-euro bailout in 2012 — finish cleaning up their books.<\/p>\n

Pick Up<\/h2>\n

\u201cIt\u2019s quite likely to pick up after the European Central Bank\u2019s asset quality review,\u201d said London-based Asba. \u201cDemand is improving and not yet matched by offer.\u201d<\/p>\n

Real estate analyst Fernando Acuna says that lenders reluctant to offer credit remain obstacles to house sales.<\/p>\n

\u201cBanks are no longer offering 120 percent mortgages over 40 years,\u201d he said. \u201cToday you need at least 20 percent of the property\u2019s value saved up before you can attempt to buy it.\u201d<\/p>\n

His Madrid-based firm, Acuna & Asociados, estimates that 40 percent of unsold housing units will never find buyers due to their undesirable location and because workers earning 1,000 euros a month — known as \u201cmil euristas\u201d — aren\u2019t able to stump up deposits. About 30 percent of workers in Spain earn less than 1,216 euros a month, statistics office data show.<\/p>\n

\u201cReal estate is lagging but it\u2019ll follow now that the economy has started to grow,\u201d said Madrid-based Angel Laborda, chief economist at Funcas, Spain\u2019s savings banks\u2019 foundation. \u201cIt\u2019s taking much longer, but Spain is going through the same process as the U.S. or Ireland, where construction is contributing to the economy again.\u201d<\/p>\n

Source: http:\/\/www.bloomberg.com<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Within the ashes left by Spain\u2019s real-estate crash, some embers are glowing. As the recovery […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-340","post","type-post","status-publish","format-standard","hentry","category-news"],"yoast_head":"\nSpain Sees Embers Glow in Wreckage of Property Crash | KME Chartered Accountants<\/title>\n<meta name=\"description\" content=\"Within the ashes left by Spain\u2019s real-estate crash, some embers are glowing. 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