The number of appraisals of homes for mortgage purposes increases by 10%, according to the AEV

• • The increase in valuations of offices for mortgage purposes demonstrates the dynamism of business activity

• Appraisal activity is concentrated in the Community of Madrid and loses weight in other main regions such as Catalonia

• The average size of appraised new construction projects grows

The AEV (Spanish Association of Value Analysis) presents the aggregate of appraisals carried out by the 24 companies it groups, including Euroval, during the first semester of the year, and highlights that, for mortgage purposes, official housing appraisals have increased by 10.25%, up to 20,800 units more than in the first semester of 2017.

Likewise, the increase in the number of reports requested to value both individual offices (+3.7%) and office buildings (+5.4%) for mortgage purposes is striking, data that demonstrates the dynamism of activity in the business environment.

These good data from the mortgage market, which as a whole rebounds 1.6% in the number of appraisals, are camouflaged in the figure for total completed appraisals, which decreased 2.7% due to the fall in valuations related to the accounting requirements of banks (-8.5%).

These decreases occur in response to the sale of asset portfolios by banks since, by eliminating them from their balance sheets, they are released from the obligation to appraise them. In fact, valuations requested by asset management companies, such as SAREB, decreased by nearly 40%.

Another striking piece of data occurs in the valuations requested by Real Estate Collective Investment Institutions, among which SOCIMIS are classified, among others. They have requested up to 2,500 more appraisals than in the first semester of the previous year (+37%), of which 35% correspond to homes, a symptom of the increasingly relevant role of these agents in the Spanish real estate market.

The 4 communities that bring together the largest amount of appraisal demand, close to 65%, are, in this order, Andalusia, Catalonia, Valencia and Madrid. However, the volume of activity in the first three decreases in the first semester by 3.45% (some 10,700 fewer appraisals), while it increases by 7.5% in Madrid with 5,155 more valuations requested, almost half of the volume lost by the other three regions.

More rehabilitation and larger new construction

With regard to new construction in the project, the 14% decrease in the number of appraisals for mortgage purposes is striking, with nearly 540 fewer appraised projects, a figure that contrasts with a significant rebound in the total amount appraised for this concept, which increases by 35.6%, which demonstrates that the projects that are launched are of greater volume and amount than in previous years. Likewise, the number of valuations of buildings in the project for rehabilitation rises by almost 70 units (40% more) compared to the first semester of 2017. Continuing with data related to homes in production, the number of intermediate work valuations (VIO) carried out with respect to the same period of the previous year increases by 26.8%, a symptom of a rebound in construction activity in the previous months.

According to Paloma Arnaiz, General Secretary of the AEV, “the data from the first semester of the year reflect the sustained recovery of the mortgage market and the greater general dynamism of real estate activity, whose only brake in the current moments is the worrying shortage of new construction supply (whether for sale or rent) in the centers of the large capitals, which is the fundamental reason for the price tension that we have been experiencing”.