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The partnerships work between developers and investment funds for reinvigorating housing construction

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The crisis has affected the property sector since 2007 it has led to new alliances among major market players, such as unions and national promoters international funds have proliferated especially in the last two years.

With the return of credit to the real estate sector, although still suffering restrictions, have begun to alliances occur between international funds who want to go beyond the tertiary and move their money into the segment of residential development, waiting to consolidate the economic and demand recovery, and promoters of life, which are those with the know-how of the residential.

The president of the employers of promoters builders of Spain (APCE), Juan Antonio Gomez-Pintado, admits told Europa Press that the information available on these alliances is vague because the sector remains “very transparent” and figures are scarce. Data from the Ministry of Public Works indicate that the number of visas requested to build new homes soared 42.5% during 2015, adding up to 49,695 certificates in November.

However, this fact, despite being the best in the last five years, is still far from the maximum of 865,561 visas orders in 2006. In the midst of this opacity, Gómez-Pintado explains that it all starts when funds that manage “a lot of money and understaffed “decided to raise housing and” looking for a promoter who has deep knowledge of the area where you want to invest and have an advanced structure, “so that it can report weekly state expenditure accounts of the works and, However, that does not cast doubt on best practices and regulatory compliance. Gómez-Pintado notes that are medium or large development companies that interest funds, while CEO Aelca Jose Juan Martin, states that also have at the point of promoters look with knowledge of micro-markets.

New Real Estate Projects

When putting an ongoing operation, funds prefer to invest in new promotions starting from scratch with your partner. Again, risk aversion is there, and prefer to go hand promoter from buying land. “If you offer them yours operation, will be the question of whether you want to do an operation you think you will not go well and you want to share risks,” adds Gómez-Pintado, to annotate that, in the end, common practice is to “find a floor, show it to the bottom, see if you are interested, do preliminary studies and get going.”

CEO of financial consulting Irea, Mikel Echavarren explains that in matters in cases in which the promoter is responsible for building and marketing, often perceived around 3% or 4% of sales. In addition, you receive a rate close to 3% of the construction cost while, depending on type of opportunity, an additional incentive is also set to the promoter, once the capital of the fund and the investor reaches an internal rate of return after tax and financing default. As for the locations, Echavarren points to destinations like Madrid, the Costa del Sol and Málaga city, Balearic Islands, Barcelona and surroundings, and the Mediterranean Coast, as the most attractive for such partnerships.

“Great opportunity”

The sources agree that these alliances are a good opportunity for developers, especially for those who downsized during the crisis and want it back. Therefore, the president of PACE believes that it is “a model that is here to stay”. “The funds have a horizon of five to seven years that they have to recover the investment and if things flow normally will stay,” he adds.

According to Martin, “there is no time continuous relationships, but it is something that will go each day to more” because “the bank financing will continue to support, but there is an initial investment of projects that the bank never will.” Henceforth, the CEO of Aelca also believed to take place “lasting relationships” between developers and funds, but believes that only occur in the case of those promoters who have a vision of all or most of the domestic market. To Echavarren, it is a “great opportunity” for that promoter has not left damaged by the crisis to diversify their resources and enhance their capacities with a view to recompose part of its capital in a few years through participation in profits.

Who will buy houses in the future? The great challenge of housing market

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It is difficult to know precisely the future that awaits the housing market in Spain and other developed countries. The current demographic pattern shows that there was a decrease of 146,959 persons over the previous year, a trend that lives Spain since 2012. If the population decreases or stagnates, who will buy the homes of the future in 2015? There are many possible answers, but Credit Suisse experts argue that the chances are that housing demand collapses.

As explained experts from the Swiss bank in the latest report on the housing market (in Switzerland), today the demand is sustained by low interest rates, which allow agents to ask mortgages with costs relatively reduced. However, much of this housing demand is coming from the hand of people who are in the second half of their lives, while more young people choose more by rent.

“The demand for housing comes out by older people. The average owner in Switzerland today is 57 years. As the baby boomers achieve greater financial settlement will be more and more homes in the hands of these people that will dominate the residential property market, “says Credit Suisse report.

Young people choose to rent

“On the contrary, younger families are opting more by rent. It is increasing the gap between generations. As a result, the market for residential housing may suffer great pressure, especially when these young (one generation more smaller than the baby boomers), replace which is now holding the demand, “explain the experts.

Number of homeowners age (Switzerland)

And is that current generations are not only fewer in number than the baby boom, but they are also the heirs of the latter, so many do not need to buy a new home since they inherit their parents, or if and are owners could decide to put it for sale or rent, increasing housing supply without a corresponding increase in demand.

“From 2018 onwards, demographic change will be a factor of weakness for the expected demand in a few years we could see a drop of one third of the demand today,” sentenced economists at Credit Suisse.

This could also be extrapolated to Spain, where 78% of households have home ownership. 46% of the population has no mortgage or housing loans outstanding, while 32% still has to pay off the mortgage.

One option that could enliven the housing market is the arrival of immigrants, who are often in the first half of his life: “The desire of many newcomers to Switzerland immigrants buying a home is serving to support demand housing, “says Credit Suisse report.

The house price rises after falling 29% in the past eight years

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After eight years of falls and an adjustment of 29%, the price of housing in Spain rises again. The square meter of private housing stood at 1,490 euros in the fourth quarter of 2015, representing an increase of 1.8% over the same period last year, according to the report by the Ministry of Public Works the 106,653 appraisals performed in the last three months of the year. The price starts a new escalation and since scoring the minimum in the third quarter of 2014, has already recovered 2.4%. After these fluctuations, it appears that accumulated since the peak in the first quarter of 2008 is 29.1% adjustment.

Housing used low prices and new uploads. The average value per square meter of private housing up to five years old stood at 1,738 euros in the fourth quarter of 2015. This represents an annual growth of 1.1%. In houses with more than five years old, it reached 1,481 euros per square meter, representing a fall of 1.8% year on year.

By autonomous communities found that 14 of them present inter-annual growth, highlighting the Balearic Islands (5.4%), Madrid (3.4%), La Rioja (3.2%), Catalonia (3.0%), Canary Islands (3 , 0%), Castilla y León (2.6%) and Navarra (2.2%). By contrast, the other autonomous communities still show year falls, Cantabria (-4.0%), Ceuta and Melilla, (-1.8%), Basque Country (-1.3%) and Murcia (-0, 1%).

By municipality of more than 25,000, the highest prices of private housing are presented in San Sebastian, 3,133 euros per square meter, Getxo, 2,699 euros, Barcelona, ​​2,553 euros, Ibiza, 2,513 euros, Sant Cugat del Valles, 2,505, 7 euros, Madrid, 2,504 euros and Pozuelo de Alarcon, 2,489 euros.

The lowest prices are recorded in Elda, 550 euros, Jumilla, 563 euros, Villarrobledo, 574 euros, Hellin, 587 euros, Crevillent, 606 euros, Ontinyent, Tomelloso 607 euros and 609 euros.

The mortgages added his second year and in 2015 upward grow nearly 20%

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Financial institutions 244,827 grant new loans for buying a home, far from the 1.3 million subscribers in 2006

Hiring mortgages to purchase homes in Spain recorded the second increase after six years of consecutive annual declines during 2015. Financial institutions granted 244,827 new mortgages, representing 19.8% more than those signed in 2014 (204,302 contracts were a timid increase of 2.3), according to provisional data released today by the National Statistics Institute (INE ). Only in December 2015 19.362 new loans were set up to buy a home, 21.1% more than in the same month of 2014.

Mortgage faucet looks loose, while increasing the purchases and prices start to rise timidly. Still, the loans taken are light years away from those granted in 2006, when 1.3 million mortgage was reached, ie daily were signed more than 3,600.

It was also higher than the average amount requested for financial institutions in the whole of 2015. The contracted average was 105,931 euros, 3.6% more than the previous year. Total borrowed capital reached 25.934 million euros, 24.1% more yoy, of which 2,088,000 were granted only in December.

Contracted mortgages added his second year and in 2015 upward grow nearly 20%

“The data confirm the end of the second year of recovery of the mortgage market, where we have witnessed four major trends: the increasing number of formalized operations, increase the average amount, the fall in the interest rate – in part by the fall in the Euribor and partly by pressure on spreads increased competition from banks – and the increase in mortgages formalized at a fixed rate, but the variables still represent the majority of new mortgages, “says Fernando Encinar, head of research idealist. In fact, 90.2% of mortgages last December used a variable rate, compared to 9.8% fixed rate. Euribor is the reference rate most used in constituting mortgages to variable interest, specifically set out in 89.8% of new contracts. Of the 11,460 mortgages with changes in conditions, 42.9% were due to changes in interest rates. After the change of conditions, the percentage of fixed-rate mortgages increased from 4.7% to 5.6%, while the variable rate mortgages decreased from 94.3% to 93.3%.

More and yet fewer individuals requesting changes in their mortgages due to unprecedented cheapening the same through a euribor negative. The average interest rate at the beginning, for the mortgages on residential property is 3.37%, 3.5% lower than in December 2014.

The total number of mortgages with changes in conditions registered in the records of the property in 2015 was 180,007, representing an annual decline of 16.5%. They attending class 143,237 conditions change novations (or modifications produced with the same financial institution) were recorded, down 16.9%. The number of operations that changed entity (subrogation to the creditor) decreased by 11.6% and the number of mortgages in which changed the owner of the mortgaged property (subrogation the debtor) fell 25.9%.

The communities with the highest number of mortgages granted on homes during 2015 were Andalusia (45,971), Madrid (42,382) and Catalonia (38,583). The regions where more capital was provided were Madrid (6,233 million euros), Catalonia (4,640 million) and Andalusia (4,159,000). The communities with the highest rates of annual variation in the number of home mortgages were the Balearic Islands (41.4%), Catalonia (25.9%) and Cantabria (24.9%). Meanwhile, those who had the lowest rates were Navarra (2.5%), Castilla y León (8.9%) and Asturias (11.8%).

To total mortgaged properties, according to INE data in 2015 the number of mortgages on rustic and urban properties (houses are also included) by 17.1% compared to 2014 increased to a total of 369,588, its first rise since 2006. the capital of the granted mortgage loans increased by 16.2% in the whole of last year to over 47,756 million euros, while the average amount of mortgages on the total number of farms He decreased by 0.8% and amounted to 129,214 euros.