The real estate market numbers so far

Last Friday we presented our 2019 Market Report in an online conference, and we take the opportunity to also show our COVID Crisis Management Report. We explain the current numbers because the situation has changed from last year and there was no point in talking only about the 2019 numbers, we know that the current situation worries us. For this reason, we wanted to explain very well how the market is currently.

25 people connected to listen to the data while the Amat Immobiliaris’s Managing Director, Guifré Homedes Amat, was explaining the data and answering questions from journalists.

2019 was a stable year with the same sales as the previous year, and with 500 brand new properties that were delivered late because there were delays with the licenses and also due to changes in the mortgage laws. As for rental contracts, we had an increase of 10% compared to 2018.

Focusing on the 1st term of 2020, before COVID-19, the year started strongly. We had a median of 34 new rental contracts and 26 sales per month, 13% more compared to 2019.

But with the impact of the coronavirus, this dynamic stopped. During the first week of lockdown, contacts fell by 80% and we rescheduled visits thinking that we would be less time at home. Teleworking was not a problem, since after 2 days we were already working 100% from home.

Instead, we moved forward creating a negotiation framework to offer solutions to owners and tenants regarding rents; the owners’ response was very good since “all of them has rowed to help the tenants so they don’t leave,” Homedes confessed. We had a total of 247 requests, 13% of our customers, 9% in homes and 38% in premises. All this process, by the Patrimonial team, was emotionally charged and very intense work. The Administration team has also had to deal with conflicts in common areas such as swimming pools, emergencies or damage caused by the heavy rains of some days. All this has been done through calls, e-mail and we have even introduced video calls with the owners to hold meetings.

These 9 weeks were a time of ‘non-market’, supply, demand and operations were frozen, trying to hold them until we could make visits, since “we can do 80% of the work digitally, but we have to physically finish it with the visits” explained the Managing Director. Despite the moment of ‘no-market’, we were under lockdown at the time of delivering 2 brand new promotions and doing the real estate deeds, in order to do it “very curious situations have been seen”.

With the arrival of the reopening phases, it was when we began to be able to make visits and we had a very high entry of interested people, both for sale and for rent. Of the rental operations that were underway before the lockdown, 25% of them fell, but as a setoff, the rental contracts are closing very quickly.

Many of the new requests that are coming are from people who want to leave the cities and are looking to have terraces, gardens and natural light at home. In addition, with the forced entry of teleworking, we are also verifying that the offices “are a room that had lost interest in the last years but now it are gaining much value,” reasoned the CEO of Amat.

From the start of the reopening until last Friday, June 19, when these data were presented, we have made 17 sales and 36 rental contracts, despite this, Guifré Homedes predicts that “the commercial euphoria that we have now on these weeks will loosen ”, but that the scenario is very different from what happened in 2008.

Regarding second-hand sale prices, at the moment we are not seeing any trend either upward or downward, in the case of rental, it is still early to see it, and in new construction homes “we do not expect them to drop because the sale is very advanced and we understand that the developers will not lower the prices ”. Despite these data, Homedes explained that “if there is no offer it is very difficult for prices to drop, but if the worker’s salary goes down it is going to be very difficult for them to pay and then prices will have to be lowered, we lack perspective to see what will happen ”.

The forethought we have for 2020 have changed with respect to what we saw at the end of 2019, and now we foresee that we will sell 40% less and rent 20% less, this decrease will be due to the months of inactivity. Despite these data, each week we have to review the forecasts to adjust them a little better.

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The real estate market in 2019

In mid-May we published the 2019 Market Report where we explain which were the trends last year.

In general lines, the 1st semester had a rate of sales similar to 2018 and a practically flat evolution of prices. In the case of the rental market, we live with constant legislative changes, a total of 6. Because of this, no offer was generated due to insecurity and in some areas, prices even increased.

In the 2nd semester, the economic and political instabilities affected the sales that suffered for a couple of months. And in the rental market there was more legal stability until the end of December.

It is clear that the market is price sensitive, whether for rent or for sale, and when it is extremely high and this threshold is exceeded the operations stop.

Rent in 2019

Analyzing the rental market in 2019, we closed the year with more contracts than the previous year, exactly 10% more, because new construction projects aimed at the rental market ended. Despite these projects, the offer on the rental market is lower than the demand and this causes remain high prices, reaching an average of 1,200€ per month.

This high demand also meant that 63% of the apartments that went to the market took less than 2 months to rent, making only 9% of the cases spend more than 3 months. Much of this 9% was because owners tried to rent at 10% above market price and it cause them to take longer to find a renter. Therefore, it is demonstrated that in these cases trying to rent above the price penalizes the profitability of the house because it is empty and without income more time.

43% of the renters took a 3-bedroom flat, even though they were more who wanted 3 bedrooms, but due to the high price they ended up with 2-bedroom flat. The profile of the renters were young people, a 41% is younger than 40 years and already a 39% goes from 40 to 50. With this information from last year, we have seen that as the client’s age increases, the rental option decreases.

Sale in 2019

If we focus on the sales, in 2019, there was a 12% drop compared to 2018, especially in the months of October and November due to economic uncertainty and political troubles, causing a price drop for the first time in recent 4 years. A 54% of the second-hand flats sold were priced between 300.000€ and 450.00€, increasing compared to the previous year, which were 24%.

The case of new construction is always linked to promotions that come onto the market, and in recent years the offer has been very stable, especially in Sant Just, L’Hospitalet i Sant Cugat. Prices are related to the purchasing power of the buyers and there is not much option for promoters to raise prices. Sales were high maintaining rates of 7 properties per month, in the case of Sant Just Desvern reaching almost 10 flats per month, despite the drop in sales in the months of October and November it was recovered in December and remain at early 2020.

In high standing households was different, it represents a small number of operations, but significant due to the high price, being a consistent market. In 2019, the trend of the previous year continued, selling plots to build new custom-built single-family houses, being Sant Cugat the town where it happened the most.

The sustainability

In 2019 we keep betting on sustainable homes, encouraging owners to improve and update their properties and buildings in terms of sustainability and energy efficiency. But, as we have already commented, with the constant regulatory changes that took place in 2019, they discouraged the owners investments. Anyway, from Amat we amplify the GreenDEX project expanding the index that measures the amount of green, that we have been using in Barcelona since 2018, to Esplugues and Sant Just; our goal is that it reaches all the locations where we have real estate.

The future

Facing 2020 looked like it was going to be a continuous year despite the uncertainties caused by the trade war between the United States and China, but with the eruption of the coronavirus and the crisis that it has caused it has sunk the market into a deeper hole than we expected and making it impossible to foresee its effects. In any case, we try to approach the future with optimism and with the opinions of the experts, as you can see in the video-interview series that we are publishing named ‘Despres del COVID-19’.

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The GreenDEX arrives to Esplugues and Sant Just

Today, 18th October, in Spain is the World Nature Protection Day, and we want to take the opportunity to announce an extension of GreenDEX. It is an index that measures the amount of green around the property and Starlab was who developed it just for us. Until now we could only measure this index in Barcelona, ​​but it’s the day to expand it to Esplugues and Sant Just. For us, Barcelona is not only the city, we like to include the entire metropolitan area, so we are very satisfied with this expansion and in the future, we really want to extend it to the entire area. But this is not all, in a long term we also want to expand this index to measure the quality of the air and the traffic around each property.

Amat and innovation always go hand in hand and it is for this reason that it is important for us bet in this area. A year ago we decided to show in our properties the amount of green that the properties have around to have a point of reference at the time of buying or renting it, and in addition to help the quality of life that have a direct impact on the customers.

According to the score of the GreenDEX indicator, numbers from 1 to 5, it shows if the property has green around it or not. The number 1 is the maximum green that a home can have around them, but 5 means nothing. The fact of extending the GreendDEX to Sant Just and Esplugues will make more properties have a lower number, between G1 and G2, which means that they have a lot of green around them. This is because the towns are located close to the Collserola Mountain.

Also exist the option to use the GreenMap where you can see the quality of vegetation around the new home and in the city where it is located. This map can be found in the information that we have of each property on our website as long as they are in Barcelona, ​​Sant Just or Esplugues.

Thanks to the development of GreenDEX a month ago we received the Most Innovative Marketing Tecniques award at the Luxury Real Estate conference in Washington D.C.

 

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The first half of 2019 marks a slight rise in real estate sales

On October 9th we presented the Real Estate Market Report of the 1st half of 2019 at the recently opened Amat Luxury Boutique in Barcelona. This is a report explains the information from the company in relation to the rental, sale of second hand, the sale of new brand and the luxury real estate sector in Barcelona, ​​Sant Cugat, Sant Just Desvern and the environment.

The Managing Director, Guifré Homedes, explained that during the first 6 months of this year there was a higher number of sales of new construction, 2% higher, also increased the economic volume of sales compared to the previous year’s period, 9%; therefore “we have sold more and a little more expensive”. In terms of second-hand sales in Barcelona, ​​a downward trend can be observed, while in Sant Just and Sant Cugat there is an increase of the sales between 10% and 20%. The age of the customers has increased; Homedes commented that “now people buy later, around when they are 40 years old, because they have been a few years in a rent home; although there are also cases where a property is sold to buy another.”

If we are talking about the luxury real estate market, it has remained low, but it is better than the first half of 2018. In this case, customers know perfectly what they are looking for and the price they want to pay, which is why they take their time to look for the right property.

The Managing Director, looking at the information, confirmed that “despite the idea of ​​pessimism that seems to be on the market we have maintained our sales and we have climbed a bit; the feeling of pessimism seems to be more affecting the sector than to customers “. This is due to the delays in the rental flats, “we had empty protected rental apartments for 3 months by bureaucratic issues, and others rental flats were empty for 4 months due to lack of electricity from the supply company,” he explained.

In addition, the different electoral processes and the changes in mortgage laws that have also occurred have affected the customers. However, it is rented very quickly, in the case of Barcelona “we took an average of 4 months, time before we took a lot more, but the prices can no longer go up because the salaries do not increase” confirmed Homedes. With President Immaculada Amat and Vice President Joana Amat, they have justified the increase in the renunciations of rental contracts in the last years, “they are people who leave the contract before because they want buy a flat, but years ago the contracts go to an end without renunciations”.

In this link you can download the full Market Report.

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A problem without magic solutions

 

Retail Cat and Amat Immobiliaris analysed the same problem from different points of view:

Retail Cat analysed how to regenerate the commerce and give exit to the retailers that are being lost by the city in the middle of closed doors.

Amat Immobiliaris analyzed how to address the need, now urgent, for housing for young people and the elderly, if possible to rent and providing social value.

The emergency of housing is sadly a reality, both for the lack of supply for rent, situation that leads to price inflation, the expulsion of former tenants in peripheral or very distant areas and, above all, because we are aware that we can not Cover with quick recipes. It is a problem without magical solutions.

These are the words I said when we presented with Juan Carlos Calbet of Retail Cat a possible solution, within the events of the Week of Commerce. A grain of sand where everyone wins and can contribute between 5,000 and 8,000 homes for rent.

The study carried out since 2009 is based on the fact that the new formulas of e-commerce and concentrations in shopping centers have come to stay and the supply of small shops in third and fourth lines of a city dies due to lack of activity.

Even today we are in time to save the current business of these areas if we design neighborhood-by-neighborhood shopping centers and help these businesses move to the designed shopping areas.

The change of use itself already means an increase in assets that can help the merchant to make the transfer and in case he is a tenant, he should act by way of financing or subsidies.

We can reconvert the premises into homes for the elderly without any architectural barrier, bringing them closer to the street, which is the same as bringing them closer to life, with low costs, because it is about building very clear structures.

We have invested a lot in putting elevators and it has been very good, but life is extended and there comes a time when it is not possible to lower the elevators, condemning our grandparents to be locked for years in a flat, which leads to isolation social and psychological

We do not find flats for young people who do not leave home before the age of 30. It is society that loses the most, because young people have to leave home well, they must know how to take their own path, we can not cut their freedom, they must move and risk and leave home is the first part of a long learning.

They can also be users of converted premises and, at the same time, invigorating streets and providing vitality to older people who will have neighbors.

The costs of reconverting them are very low, because they must be very clear and standardized.

And also win the communities of owners who today suffer dirt, abandonment of the premises and also problems for future projects of rehabilitation of the real estate whenever the premises have a coefficient that exceeds 15% of the property and, therefore, are essential to carry out any project and do not make it easy given that they have been closed for years and years.

Catalonia has 30,000 empty spaces at the moment and will continue to grow. We can not continue like this, we need coordinated decisions among all the institutions that, in one way or another, can change the current criteria and allow this grain of sand to be possible.

The win-win is a reality, the merchant wins who can move to more central areas, the owner who today has it closed wins, the community of owners wins, the society wins, offering solutions for grandparents and young people, the city wins , because we would improve the image, the cleanliness and the security of many streets, and the neighbors will win that would have much more life than the closed and dirty doors of today.

Shall we start?

Joana Amat

Vice-president of Amat Immobiliaris

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