Special focus : Real Estate complex areas , such as real estate promotion – 2017 will be a big year for the sector , as long as the European Central Bank does not change its monetary policy .”
Learning curve This year has been more moderate in terms of real estate investment in comparison with the period 2012-14 , though interest persists in the retail , residential and hotel sectors , especially among opportunistic investment funds , according to Uría Menéndez .
“ There has been a learning process in recent years and there is now more legislative protection for consumers , and a fear of investing in loans collateralised with residential property ,” Uría Menéndez partner Fernando Azofra says . “ In Spain , there was no professionalised housing rental market and residential rental amounted to a tiny 11 per cent in 2001 , while the EU average was 29.9 per cent – however , in recent years , households have veered to renting rather than buying .”
Credit available Surplus housing stock remains in less attractive areas and this will be difficult to shift , but there is also attractive land that was not receiving investment during the crisis due to the lack of financing , says Azofra . Now there is credit available and many see potential for a successful development , he adds .
Investment funds are also buying repossessed property from banks , not only ready and available residential units , commercial property and hotels , but also land for development “ which was a totally illiquid asset from the crisis until 2015 ”, Uría Menéndez partner Diego Armero says . He also highlights the interest in Spanish real estate among family offices and investment funds in Latin
America , which are focused on the potential for growth in the Spanish real estate markets “ as much as their stability and solidity ”.
The residential rental market still has a long way to grow and uncertainty caused by Brexit may well push UK investors to other places , such as Portugal .
Pedro Pinto pbbr
Brexit uncertainty However , Azofra says uncertainty provoked by Brexit may have an effect on Spain ’ s real estate market , given the coastal property market and that the tourism sector is highly dependent on the UK . That said , he doubts that the UK ’ s departure from the European Union will cause an excessive amount of trauma .
Bernat Mullerat , partner at Cuatrecasas Gonçalves Periera in Barcelona , says investment in real estate has dropped since 2015 , which was a record year . “ There are fewer assets on the market compared to last year , and the political uncertainty doesn ’ t help ,” he explains . “ We are on a clear path of recovery from the crisis , but prices are not matching quality and have yet to match former levels .”
Portugal : Money pouring in With regard to the Portuguese market , real estate investment is “ pouring in ” from many countries , firms with a strong transaction department and much experience in the sector are the best positioned to pick up work in this cycle .
Carlos Portocarrero Clifford Chance ” according to Hugo Nunes , partner at specialist property firm Sofia Galvao Advogados in Lisbon . “ When the market started to pick up two or three years ago , people were looking for liquid assets generating returns in offices and commercial property , but there is now less supply and yields are shrinking , and we are seeing more investment in development projects , although the risk is bigger ,” he says .
Rents increasing Another force driving Portuguese real estate investment is tourism , not only in hotels but also in apartments for accommodation website Airbnb , Nunes says . With restrictions now placed on tourism rentals in cities such as Barcelona and Berlin , Lisbon is seen as the European Airbnb capital , he adds . “ However , the downside for Airbnb is that foreigners are buying into traditional neighbourhoods , the locals are leaving , and those neighbourhoods become a pastiche and such purchases are driving up rents .”
Portugal ’ s coalition government has proposed a new tax law that would target property owners based on their real estate portfolio , but Nunes doubts that the legislation will become law . “ The ‘ Frankenstein ’ government is artificial and hangs together with paperclips , and it is unlikely that the proposed property tax will come into effect ,” he says . “ But , as in Spain , it ’ s difficult to forecast beyond the next government budget .” And while Portugal ’ s economic recovery is continuing , there is still a lot of fragility , Nunes says , citing banks ’ lack of strong capital ratios . However , he adds that real estate is “ one of the most robust sectors ”. That said , Nunes says Brexit could endanger the traditional Portuguese market
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