Expatriado por la burbuja
Madmaxista
- Desde
- 22 Jun 2006
- Mensajes
- 217
- Reputación
- 14
By Esteban Duarte and Charles Penty
March 20 (Bloomberg) -- Vacation home prices in Spain, a
leading indicator of Europe's property market, may face a slump
that's worse than the real estate decline in the U.S., based on
the loan terms banks are imposing on developers.
Property magnate Fernando Martin, the former Real Madrid
soccer chairman, and Barcelona-based Promociones Habitat SA are
paying five times more to borrow than U.S. developers such as
Centex Corp. in Dallas, according to data compiled by Bloomberg.
Even UAL Corp.'s United Airlines, which was bankrupt last year,
pays a lower risk premium on its loans.
``Banks are imposing terms on real-estate firms similar to
those for defaulted loans,'' said David Malpica, who helps
manage $5.6 billion of real-estate and distressed debt assets in
Europe and the U.S. for CarVal Investor in London. ``It reflects
the high volatility of real-estate assets.''
Property agents in Spain, Europe's hottest housing market
this decade, are likely to cut vacation home prices by as much
as 10 percent this year, according to RR de Acuna & Associates
in Madrid, which values real estate for about 40 percent of
mortgages. A slowdown may have a ``psychological'' effect
throughout Europe, said Tobias Just, an analyst at Deutsche Bank
AG in Frankfurt.
Spanish house prices averaged 276,300 euros ($368,000) in
December, according to Sociedad de Tasacion, a Spanish property
company. They're twice as expensive today as in 2000, beating
growth rates in the U.K. and Ireland, according to figures from
the European Mortgage Federation and Irish Life & Permanent Plc.
British, Irish and German vacationers and retirees fueled
sales of 4 million homes to foreigners, according to the
Vacation Homes Agency, an organization in Madrid funded by
developers. Construction made Spain the biggest driver of
economic growth in the euro region this decade.
Higher Rates
Real estate spending by foreigners dropped 11 percent
during 2006 to 4.9 billion euros, according to the Bank of Spain
figures released last week. New mortgages sold to Spanish
families fell by 10 percent, according to the Spanish Mortgage
Association. Applications declined as the European Central Bank
raised interest rates seven times in the past 16 months to 3.75
percent.
``Opening a sales office and hiring an attractive woman is
no longer enough to sell houses,'' said James Stuart, who has
marketed vacation homes since the 1980s in Marbella on the Costa
del Sol, and is the local agent for Savills Plc, the largest
publicly traded commercial real-estate broker in the U.K. ``I
don't know any project in default, but banks are asking for more
guarantees and more sales to be agreed before lending any
money.'' The Costa del Sol is on Spain's southern coastline,
just across the Mediterranean Sea from Africa.
More Vulnerable
Spanish homeowners may be more vulnerable than Americans to
defaults as interest rates rise because about 98 percent of
mortgages in Spain have floating rates, according to the central
bank. In the U.S., most mortgages have fixed rates.
The Organization for Economic Cooperation and Development
in January said house prices in Spain may be overvalued by as
much as 30 percent. A sudden acceleration in interest rates
could cause an ``abrupt adjustment in which prices would
plunge,'' the Paris-based OECD said. A 30 percent slump could
reduce Spain's economic growth by as much as 1.8 percentage
points, according to Deutsche Bank's Just.
Bank Risks
Re/Max International Inc., the second-largest U.S. real-
estate broker, says it cut prices as much as 26 percent on more
than 5,000 homes in Spain in January. Overall in the country,
prices rose at an annual rate of 9.1 percent in the fourth
quarter, slowing from 9.8 percent the previous quarter and 12.6
percent a year earlier, Housing Ministry figures show. Home
prices in the U.S. fell 2.7 percent last year, according to the
National Association of Realtors.
``When sales slow the first area to suffer is vacation
homes and then first homes are next to get hit,'' said Dani
Alvarez, former head of international sales at Don Piso, a
Spanish real-estate broker.
A slump may hurt Spain's banks. Santander Central Hispano
SA and Banco Bilbao Vizcaya Argentaria SA lead banks owed 1.3
trillion euros by developers, builders and mortgage holders,
according to the Spanish Mortgage Association. The 379 billion
euros of loans to property firms is equal to about half of all
corporate loans, Bank of Spain data show.
Property developers pay a premium over other industries to
borrow. Fernando Martin's Madrid-based Grupo Martinsa is paying
Morgan Stanley, Caja Madrid and Caja de Ahorros de Barcelona an
interest premium as high as 2.5 percentage points over interbank
rates, according to regulatory filings.
The 4.1 billion-euro loan will help finance Martinsa's
acquisition of Fadesa Inmobiliaria SA, Spain's second-largest
real estate company, based in La Coruna. Fadesa has built
properties ranging from vacation homes in the Canary Islands to
golf courses near the Spanish city of Malaga.
Loan Guarantees
By contrast, Metrovacesa SA, Spain's biggest real estate
company, paid an interest margin of only 60 basis points last
year for a loan to refinance debt from its purchase of Paris-
based developer Gecina SA.
United Airlines paid 50 basis points less than Martinsa on
its loan last month, a year after the Elk Grove Village,
Illinois-based company exited bankruptcy.
``Spanish banks have been lending a lot of money to buy and
build houses,'' said Giuliano Giovanetti, head of sales for
mortgage insurance company PMI Group Inc. ``The market is now
asking a premium for debt related to Spanish real estate.''
Martinsa had to guarantee lenders it would reduce debt by
selling equity within 15 months, company filings show. It also
must purchase derivatives to fix its borrowing rate, said a
banker involved in the deal, who declined to be identified.
Debt Syndicate
Promociones Habitat is paying the same interest premium as
Martinsa to borrow 1.7 billion euros for its acquisition of
Grupo Ferrovial SA's real-estate unit in Madrid. Habitat must
reduce debt by selling equity within six months under its
contract with lenders led by La Caixa, Spain's biggest savings
bank. Martinsa and Habitat spokesmen declined to comment.
``Banks are demanding real-estate companies cut debt or
increase equity,'' said Antonio Hernandez Chao, deputy head of
syndication at Ahorro Corporacion Financiera in Madrid, Spain's
biggest issuer of bonds backed by mortgages.
Banks are turning to fund managers and regional lenders to
underwrite debt sales as a way of reducing their risk. London-
based fund manager European Credit Management is helping
Santander and Caja Madrid arrange a 3.8 billion-euro loan for
Construcciones Reyal SUA, the first time a non-bank institution
has underwritten a loan in Spain, Bloomberg data show.
Mortgage Arrears
European Credit Management, which controls 20 billion euros
of debt investments, will receive an interest margin as high as
195 basis points over Euribor in addition to undisclosed
underwriting fees, Bloomberg data show.
Spanish homeowners and developers show few symptoms of
distress. Housing starts are rising at the fastest pace in three
years, with planning approvals up 18 percent last year to
864,000 homes, according to construction trade union Seopan.
France, with a larger population, had 561,737 planning
approvals.
The biggest shareholders of real-estate companies,
including Astroc Mediterraneo SA Chairman Enrique Banuelos and
Grupo Inmocaral SA Chairman Luis Portillo, entered the Forbes
billionaire list this year after selling shares in their real-
estate companies and buying larger rivals.
Bank of Spain chief economist Jose Luis Malo de Molina last
week predicted ``a gradual normalization'' of the property
market that wouldn't destabilize Spain's economy or financial
sector. The slowdown in house price increases would lead to
``gradual absorption'' of the effects of excess valuations, he
said.
Corruption Charges
BBVA, Spain's second-largest lender, expects real estate
prices to rise by at least 3 percent this year. Prices in the
province of Malaga rose 8.6 percent last year, accelerating from
8.2 percent in 2005, according to the government.
``The second homes market is more vulnerable to a
slowdown,'' said Oliver Gilmartin, senior economist at the Royal
Institution of Chartered Surveyors in London. ``I don't think
the slowdown is a necessarily a harbinger of wider problems.''
Corruption charges brought against some of the country's
biggest realtors are adding to concern about prices. At least 75
people have been arrested as part of the investigation,
including the mayor of Marbella, Marisol Yague.
`Economic Impact'
The stigma hurts firms that haven't been accused of
wrongdoing by driving investors to other regions such as
Portugal's Algarve, said Juan Antonio Ibanez, chief executive
officer at Urbasa Proyectos Urbanisticos SA, which is building
140 vacation houses near Marbella.
``For companies that are exposed to the vacation home
market, what's happening there may be a sign to slow things
down,'' said Mark Stucklin, the author of ``Buying Property in
Spain'' who runs Spanish Property Insight Web site and writes a
column on the market in Spain for the Sunday Times in London.
``If sales to foreigners are slowing, that means there's less
building to be done and that will have an economic impact.''
--With reporting by Cecile Gutscher in London. Editor: Shanahan
(jmp)
March 20 (Bloomberg) -- Vacation home prices in Spain, a
leading indicator of Europe's property market, may face a slump
that's worse than the real estate decline in the U.S., based on
the loan terms banks are imposing on developers.
Property magnate Fernando Martin, the former Real Madrid
soccer chairman, and Barcelona-based Promociones Habitat SA are
paying five times more to borrow than U.S. developers such as
Centex Corp. in Dallas, according to data compiled by Bloomberg.
Even UAL Corp.'s United Airlines, which was bankrupt last year,
pays a lower risk premium on its loans.
``Banks are imposing terms on real-estate firms similar to
those for defaulted loans,'' said David Malpica, who helps
manage $5.6 billion of real-estate and distressed debt assets in
Europe and the U.S. for CarVal Investor in London. ``It reflects
the high volatility of real-estate assets.''
Property agents in Spain, Europe's hottest housing market
this decade, are likely to cut vacation home prices by as much
as 10 percent this year, according to RR de Acuna & Associates
in Madrid, which values real estate for about 40 percent of
mortgages. A slowdown may have a ``psychological'' effect
throughout Europe, said Tobias Just, an analyst at Deutsche Bank
AG in Frankfurt.
Spanish house prices averaged 276,300 euros ($368,000) in
December, according to Sociedad de Tasacion, a Spanish property
company. They're twice as expensive today as in 2000, beating
growth rates in the U.K. and Ireland, according to figures from
the European Mortgage Federation and Irish Life & Permanent Plc.
British, Irish and German vacationers and retirees fueled
sales of 4 million homes to foreigners, according to the
Vacation Homes Agency, an organization in Madrid funded by
developers. Construction made Spain the biggest driver of
economic growth in the euro region this decade.
Higher Rates
Real estate spending by foreigners dropped 11 percent
during 2006 to 4.9 billion euros, according to the Bank of Spain
figures released last week. New mortgages sold to Spanish
families fell by 10 percent, according to the Spanish Mortgage
Association. Applications declined as the European Central Bank
raised interest rates seven times in the past 16 months to 3.75
percent.
``Opening a sales office and hiring an attractive woman is
no longer enough to sell houses,'' said James Stuart, who has
marketed vacation homes since the 1980s in Marbella on the Costa
del Sol, and is the local agent for Savills Plc, the largest
publicly traded commercial real-estate broker in the U.K. ``I
don't know any project in default, but banks are asking for more
guarantees and more sales to be agreed before lending any
money.'' The Costa del Sol is on Spain's southern coastline,
just across the Mediterranean Sea from Africa.
More Vulnerable
Spanish homeowners may be more vulnerable than Americans to
defaults as interest rates rise because about 98 percent of
mortgages in Spain have floating rates, according to the central
bank. In the U.S., most mortgages have fixed rates.
The Organization for Economic Cooperation and Development
in January said house prices in Spain may be overvalued by as
much as 30 percent. A sudden acceleration in interest rates
could cause an ``abrupt adjustment in which prices would
plunge,'' the Paris-based OECD said. A 30 percent slump could
reduce Spain's economic growth by as much as 1.8 percentage
points, according to Deutsche Bank's Just.
Bank Risks
Re/Max International Inc., the second-largest U.S. real-
estate broker, says it cut prices as much as 26 percent on more
than 5,000 homes in Spain in January. Overall in the country,
prices rose at an annual rate of 9.1 percent in the fourth
quarter, slowing from 9.8 percent the previous quarter and 12.6
percent a year earlier, Housing Ministry figures show. Home
prices in the U.S. fell 2.7 percent last year, according to the
National Association of Realtors.
``When sales slow the first area to suffer is vacation
homes and then first homes are next to get hit,'' said Dani
Alvarez, former head of international sales at Don Piso, a
Spanish real-estate broker.
A slump may hurt Spain's banks. Santander Central Hispano
SA and Banco Bilbao Vizcaya Argentaria SA lead banks owed 1.3
trillion euros by developers, builders and mortgage holders,
according to the Spanish Mortgage Association. The 379 billion
euros of loans to property firms is equal to about half of all
corporate loans, Bank of Spain data show.
Property developers pay a premium over other industries to
borrow. Fernando Martin's Madrid-based Grupo Martinsa is paying
Morgan Stanley, Caja Madrid and Caja de Ahorros de Barcelona an
interest premium as high as 2.5 percentage points over interbank
rates, according to regulatory filings.
The 4.1 billion-euro loan will help finance Martinsa's
acquisition of Fadesa Inmobiliaria SA, Spain's second-largest
real estate company, based in La Coruna. Fadesa has built
properties ranging from vacation homes in the Canary Islands to
golf courses near the Spanish city of Malaga.
Loan Guarantees
By contrast, Metrovacesa SA, Spain's biggest real estate
company, paid an interest margin of only 60 basis points last
year for a loan to refinance debt from its purchase of Paris-
based developer Gecina SA.
United Airlines paid 50 basis points less than Martinsa on
its loan last month, a year after the Elk Grove Village,
Illinois-based company exited bankruptcy.
``Spanish banks have been lending a lot of money to buy and
build houses,'' said Giuliano Giovanetti, head of sales for
mortgage insurance company PMI Group Inc. ``The market is now
asking a premium for debt related to Spanish real estate.''
Martinsa had to guarantee lenders it would reduce debt by
selling equity within 15 months, company filings show. It also
must purchase derivatives to fix its borrowing rate, said a
banker involved in the deal, who declined to be identified.
Debt Syndicate
Promociones Habitat is paying the same interest premium as
Martinsa to borrow 1.7 billion euros for its acquisition of
Grupo Ferrovial SA's real-estate unit in Madrid. Habitat must
reduce debt by selling equity within six months under its
contract with lenders led by La Caixa, Spain's biggest savings
bank. Martinsa and Habitat spokesmen declined to comment.
``Banks are demanding real-estate companies cut debt or
increase equity,'' said Antonio Hernandez Chao, deputy head of
syndication at Ahorro Corporacion Financiera in Madrid, Spain's
biggest issuer of bonds backed by mortgages.
Banks are turning to fund managers and regional lenders to
underwrite debt sales as a way of reducing their risk. London-
based fund manager European Credit Management is helping
Santander and Caja Madrid arrange a 3.8 billion-euro loan for
Construcciones Reyal SUA, the first time a non-bank institution
has underwritten a loan in Spain, Bloomberg data show.
Mortgage Arrears
European Credit Management, which controls 20 billion euros
of debt investments, will receive an interest margin as high as
195 basis points over Euribor in addition to undisclosed
underwriting fees, Bloomberg data show.
Spanish homeowners and developers show few symptoms of
distress. Housing starts are rising at the fastest pace in three
years, with planning approvals up 18 percent last year to
864,000 homes, according to construction trade union Seopan.
France, with a larger population, had 561,737 planning
approvals.
The biggest shareholders of real-estate companies,
including Astroc Mediterraneo SA Chairman Enrique Banuelos and
Grupo Inmocaral SA Chairman Luis Portillo, entered the Forbes
billionaire list this year after selling shares in their real-
estate companies and buying larger rivals.
Bank of Spain chief economist Jose Luis Malo de Molina last
week predicted ``a gradual normalization'' of the property
market that wouldn't destabilize Spain's economy or financial
sector. The slowdown in house price increases would lead to
``gradual absorption'' of the effects of excess valuations, he
said.
Corruption Charges
BBVA, Spain's second-largest lender, expects real estate
prices to rise by at least 3 percent this year. Prices in the
province of Malaga rose 8.6 percent last year, accelerating from
8.2 percent in 2005, according to the government.
``The second homes market is more vulnerable to a
slowdown,'' said Oliver Gilmartin, senior economist at the Royal
Institution of Chartered Surveyors in London. ``I don't think
the slowdown is a necessarily a harbinger of wider problems.''
Corruption charges brought against some of the country's
biggest realtors are adding to concern about prices. At least 75
people have been arrested as part of the investigation,
including the mayor of Marbella, Marisol Yague.
`Economic Impact'
The stigma hurts firms that haven't been accused of
wrongdoing by driving investors to other regions such as
Portugal's Algarve, said Juan Antonio Ibanez, chief executive
officer at Urbasa Proyectos Urbanisticos SA, which is building
140 vacation houses near Marbella.
``For companies that are exposed to the vacation home
market, what's happening there may be a sign to slow things
down,'' said Mark Stucklin, the author of ``Buying Property in
Spain'' who runs Spanish Property Insight Web site and writes a
column on the market in Spain for the Sunday Times in London.
``If sales to foreigners are slowing, that means there's less
building to be done and that will have an economic impact.''
--With reporting by Cecile Gutscher in London. Editor: Shanahan
(jmp)
