10.9% Fewer Completed Appraisals During 2019, According to the AEV

• Madrid and Barcelona account for 10% of the valuations carried out from January to June 2019
• The number of home appraisals decreases in 53% of the autonomous communities, between 3% and 15%

According to the latest data from the AEV (Spanish Association of Value Analysis), 10.9% fewer complete appraisals were carried out during the first half of the year than in the same period of the previous year, a decrease mainly associated with the process of cleaning up the balance sheets of banks, who, through the sale of portfolios, free themselves from the need to continue re-appraising these properties periodically. The 520,000 valuations carried out by the 22 appraisal companies that make up the AEV represent a sharper fall than that which took place between 2017 and 2018 (-2.7%).

With regard to all mortgage appraisals, they have decreased by 2.8%, a slight decrease which, according to the General Secretary of the AEV, Paloma Arnaiz, “is probably due to the fact that some operations that should have closed in June have been moved to July due to the operational complications of the implementation of the Real Estate Credit Contracts Law”.

The growth of home appraisals for mortgage purposes has slowed during the first half of 2019. The total valuations of block and single-family homes have experienced a slight increase of 0.45%, while the increase between the first half of 2018 and 2017 had been 10.45%. The average appraised amount for mortgage purposes of block housing has increased from €165,000 in the first half of 2018 to €173,000 from January to June of this year, while that of single-family housing has done so much more moderately, by only €1,000, up to €251,000.

Euroval, which is part of the AEV and is a member of its Board of Directors, occupies 6th place in the AEV Ranking of Appraisal Companies, has closed with a positive annual variation in its turnover of 1.9%.

Although in the first quarter of the year there was a significant growth in mortgage appraisals of new construction projects, the balance left by the data for the first six months of 2019 as a whole is negative, since some 430 fewer new construction projects have been appraised than in the first half of 2018, down to 2,780 buildings, which in turn represents a decrease of 2.6% in terms of appraised amount. In contrast, there is a very significant increase in the number and amount of appraisals of rehabilitation projects, with some 45 more projects than in the first half of 2018, up to 275, which in terms of appraised amount has meant an increase of 106%, to almost reach 1,200 million euros, when in the first half of 2018 it did not reach 580 million. For all uses combined, mortgage appraisals decrease by 2.8% in volume, and 3.7% in total appraised amount.

Madrid and Barcelona gain relevance

In the last four years, the group of municipalities of Madrid and Barcelona has been gaining prominence, going from encompassing 8.5% of all appraisals in the first half of 2018 to 9.5% of these first six months of the year, with almost 50,000 valuations of the national total of 520,000 units. And, if we focus on home appraisals, Madrid and Barcelona account for 10% of the valuations carried out between January and June 2019. In terms of appraised amount, this prominence is more marked, since Madrid and Barcelona account for 21.5% of the almost 174 million euros appraised in the first half of the year, a percentage that has grown by more than three points since the 18.2% of the first half of 2018. Likewise, the volume of business concentrated in municipalities with fewer than 100,000 inhabitants increases slightly, to the detriment of the more populated municipalities.

Home appraisals (both mortgage and for other purposes) carried out during this first half of the year have decreased in just over half of the autonomous communities. The Canary Islands is the region whose number of home appraisals decreases the most, 17.8%, followed by La Rioja (-15%), Catalonia (-14%) and the Balearic Islands (-14%). On the other hand, Extremadura (31%), the Basque Country (10.6%), Cantabria (9.5%), Galicia (9.3%), Castilla y León (5.8%), Asturias (4.2%) and Andalusia (1.4%) remain positive.

Consolidation of Automated Valuations (AVM)

The solid growth of AVM valuations is strengthened, which after the low levels of activity in 2018, due to the wait for the publication of the Bank of Spain regulations, recover and even exceed the volumes of the first half of 2017, with almost 470,000 automated valuations. Likewise, the growing trend of intermediate construction valuations (10.8%) is confirmed, with some 1,500 more valuations than in the first half of last year. On the contrary, appraisals for accounting purposes of financial entities continue to decline: valuations without interior visits decrease by 9.9%.

According to Paloma Arnaiz, General Secretary of the AEV, “the data for the first half of 2019 confirm the slowdown in the market that was already anticipated by the latest transaction data, and which would originate in the worsening of the economic situation that is already glimpsed, as well as in the uncertainties experienced by the market with the entire process of approval of the Real Estate Credit Contracts Law. The positive note of the moment is the intensification of building rehabilitation activity, which undoubtedly anticipates what will be a trend in the future of our residential market, both for demographic reasons and for the need to adapt the existing stock to the energy efficiency requirements of buildings”.

You can read the full news in:

Europapress.es

Cincodias.elpais.es

Elinmobiliariomesames.es

Realstatepress.es

Ejeprime.es