Spanish bank to sell €450m of property
Investment in Spanish property increased from €4.9 billion euros in 2013 to €17.8 billion in 2014, according to Spanish financial assessors IREA, as international investors return to the country.
Now, Spain's Banco Popular is preparing to sell off €451 million of property, reports Bloomberg.
The portfolio of assets, detailed in a document sent to investors by N+1, includes 1,753 homes in Madrid, Barcelona, Toledo and the Costa del Sol, which are valued at $300 million, as well as zoned land in 10 regions and 13 hotels across the country.
The reported sale arrives just as the country's appeal to overseas buyers increases, thanks to favourable exchange rates between the weak euro and strong pound and ollar. News of the country's improving economy is also boosting its attractiveness to overseas investors.
After years of gloom, economic growth projections have been revised upward by Fitch, while Spain has been affirmed at a BBB+ rating. According to the data reviewed by the ratings agency, Spain's growth in Q4 2014 reached 2 per cent - higher than that of Germany and out-performing the Eurozone as a whole.
Newton Investment Management notes that some analysts predict Spain to achieve annual growth of 30 per cent over the coming years, making it the largest economy in Europe.
Marc Pritchard, Sales and Marketing Director of leading Spanish homebuilder Taylor Wimpey España, comments: "Unemployment has fallen sharply, but still stood at 23.8 per cent for the first quarter of the year – so that's more than one in five people who want to work yet can't. It's a stark figure, but actually there does seem to be a sense that the country has turned the corner, certainly among those who run businesses here."
The improving outlook follows a period of gradual recovery in the housing market, fuelled by strong overseas interest. In the first quarter of 2015, over 90,000 housing purchases were registered, according to the Spanish Registrars, an increase of 16.25 per cent over the previous quarter.
Sales of new homes continued to decline to a new low of 22,670, but the sales price index shows an increase of 1,88 per cent in the first three months of the year, taking the annual growth to 2.65 per cent.
"More sales at higher prices, this is exactly the news we want to hear," says Alejandra Vanoli, Managing Director of Mallorca Sotheby's International Realty.
"The Balearic Islands reported some of the lowest house price falls in Spain during the six-year crisis and are now posting the fastest and highest rises. We expected this as the Islands are supported by huge numbers of tourists, a multi-national house buying population - Calvia alone has 19,000 non-Spanish residents from 100 different countries - and a strong appeal to the high-end with luxury hotels, restaurants, beach clubs, golf courses and marinas supporting a growing superyacht industry. This year we are selling more houses than ever and for us in Mallorca, the future is very bright."
Indeed, home purchases by foreigners accounted for 12.22 per cent of all transactions, according to the Registrars. While this is down from 13.88 per cent in the previous quarter, purchases in absolute terms jumped compared to the previous quarter and 8.95 per cent compared to the previous year.
British buyers continue to lead the way, accounting for 17.7 per cent of purchases, followed by France (10.19 per cent), Germany (7.7 per cent), Belgium (7.44 per cent), Sweden (5.48 per cent) and Russians (5.03 per cent).
Are Spain's hard times firmly in the past?
"Economic recovery from a crash as spectacular as those that happened around the globe during the 2007/08 financial crisis is a long and slow process," continues Pritchard, "but it looks like Spain now has the building blocks that it needs in place in order to expand and achieve stability once more."
"We're certainly headed in the right direction," he adds.