Revival of the land market

The revival of the real estate wasn’t complete until now. With de recovery of the land market we can say that the circle is finally complete. After many years of drought, where the land ended up having a negative value (because of its high maintenance costs in addition to not being sold) the activity has returned.

According to the latest statistics from the Ministry of Development, in the first three months of the year there were increases in the number of transactions, reinforcing the trend shown in 2014. Last year, the sale of these assets grew for the first time since 2007. In terms of numbers, 3,465 operations were performed, 4.4% higher than those recorded in the same period of 2014. The value reached 497.2 million euros. This rise is pushing up the price of land and boosting the recovery of the land and real estate market. The urban square meter rose 5.9% through March, to 149.9 euros per square meter.

So, for the land to be valuable again in the market, it has been necessary for Spain to reactivate its economy and for the international investors to regain confidence. Large buyers of land are now these international investors, such as Pimco, Chenavari Castlelake or Lone Star and the way they operate is almost always the same. They acquire the final ground, the one that is ready to construct on and they associate with a local developer, who knows the market.

Real estate market

In addition to the rise of the land market, the housing sector is also rising again. After a the real estate free fall, foreign buyers saved the market and now for the first time in years, Spanish buyers are demanding real estate again. The latest real estate statistics published by the Association of Registrars of Property, for the second quarter, reflects that during this period the number of property transactions linked to a foreign buyer accounted for 12.82% of the total. This figure is higher than the previous quarter -12.22% – but is below 13.03% in the same period last year. It so happens, moreover, that the first quarter was a sudden shift: for the first time, after five years of uninterrupted increases, there was a quarterly decline.

Some experts in the field, predict that this trend of growth will probably continue during the following years. Also the sale of homes to foreigners is stabilizing and finally consolidating.

 

Source: ABC Economia

 

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