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Spain statistics

I like statistics and financial data, so I will be posting a variety of information that I hope will be equally useful to others, even though perhaps not as exciting...

Which areas of the Costa del Sol have seen a REAL rise in property prices?
02 December 2017

The rise in property prices in the last 2-3 years has been showing in the government statistics and, while not anything to write home about, it has been a fact confirmed by numbers. As you know, this blogger likes cold hard number analysis before any conclusions, so I got to the task to examine at the area level whether properties prices have really risen on the Costa del Sol.

My favourite metric for prices is the Euros per metre squared (EUR/m2) that removes as much noise as possible from price data. It is the equivalent of comparing apples to apples, since no property is alike any other, therefore if we group properties at the area level we can at least assume that any other factors that affect price are very similar, and the main factor affecting price is the square metreage.

With the assumptions out of the way, let's look at the data. I have looked at the period since my last article relating to this: https://www.eyeonspain.com/blogs/spainstatistics/17172/fair-price-for-property-on-the-costa-del-sol---a-basic-reference.aspx  i.e.for the last 6 months. I have been recording the average cost of EUR/m2 for each area for each week since then - and looked at the minimum and maximum values for that period. In other words, I was looking to see if these average EUR/m2 have moved up or down since then.

Result 1: Out of 147 areas of the Costa del Sol, 75 have had their minimum EUR/m2 rise. I.e. the minimum price owners will sell their property for has risen in half of the areas. This in itself does not mean a lot, 50-50 is to be expected.

Result 2: However I counted 39 areas that have had both their minimum and maximum EUR/m2 go up, i.e. the property owners are not only unwilling to accept a low price, but are also raising their selling prices at the higher end. In one word this is called "Optimism", a very crucial element in any healthy market. Below I display the list of areas that have had property rises confirmed by statistical data (admittedly not the government's but our own anecdotal data):

Location % change of lowest EUR/m2 % change of highest EUR/m2
Alhaurin el Grande 31 20
Arroyo de la Miel 46 11
Artola 9 8
Bahia de Marbella 2 2
Bajondillo 29 29
Benamara 18 32
Calypso 14 2
Campillos 1 1
Campo Mijas 107 16
Carib Playa 1 3
Cortijo Blanco 33 10
Costabella 26 1
Costalita 51 9
Cruz Humilladero 17 16
El Faro 5 16
El Pinillo 1 4
Elviria 4 7
Fuengirola 5 10
Guadalmina Alta 18 52
Guadalmina Baja 2 1
La Carihuela 10 5
Las Brisas 2 3
Los Pacos 20 25
Malaga 30 16
Malaga Centro 5 34
Malaga Este 7 12
Manilva 14 3
Miraflores 5 0
Montemar 71 3
Nueva Andalucia 6 58
Puerto Banus 3 1
Reserva de Marbella 7 1
Riviera del Sol 13 40
San Luis de Sabinillas 35 2
San Pedro de Alcantara 25 7
Selwo 6 7
Torremolinos 2 110
Torremolinos Centro 5 6
Torremuelle 17 1

 

I hope you are an owner in one of the above areas, perhaps you could confirm or dispute the findings based on your own experience in the comments below.

If I had to draw a generic conclusion from the data, it would be that the longer established areas have not seen as much of a rise (perhaps where British people have traditionally lives, for example properties in Calahonda - Brexit effect? ), but peripheral areas like Nueva Andalucia, Campo Mijas, San Pedro etc have had most of the benefit.

Something to watch for in 6 months. If the trend continues perhaps we will see clients expanding their horizons even further to inland and more westerly/easterly Costa del Sol areas.

Thanks for reading, and have a good weekend.

 

 

 



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New construction is a favourite in Andalucia
18 September 2017

One of the anecdotal conversations currently taking place in the real estate world, is the pace of new construction on the Costa del Sol. It's easy enough to observe that over the last 1 year many cranes have popped up behind every corner - but I like statistics as you know, so I went on a search to verify.

One of my favourite websites to lurk around is INE.es, Spain's statistical office. It offers us the following succinct data table for the whole of Spain, which shows the year period (first column), the total number of housing starts (second column), and number of residential housing starts (third column).

 

2016 23,977 19,801
2015 21,223 17,052
2014 16,573 13,003
2013 16,676 12,868
2012 20,758 16,242

 

You can see the increase in both residential and business construction starts, especially since 2015. The year 2017 so far has advanced as follows:

 

May 2,624 2,163
Abr 2,004 1,638
Mar 2,770 2,320
Feb 2,265 1,912
Ene 2,141 1,795

 

Almost 10,000 project units till May, which means we are heading for matching 2016 and more. Now, this data is for the whole of the country, how does Andalucia fare?

 

Year 2016 Year 2017
(trimester) (trimester)
1,589 1,672 1,409 1,645 1,399

 

The data only goes to April 2017, but it shows that around 25% of the new Spanish construction was in Andalucia! Coupled with the 2.6% increase in prices for new construction residential units in the 2nd trimester) ( see: http://www.ine.es/dyngs/INEbase/es/operacion.htm?c=Estadistica_C&cid=1254736152838&menu=ultiDatos&idp=1254735576757 ) it all points to a rather frenetic pace in new developments on the Costa del Sol.

I finish with an informal piece of information, you should not take my work for it but there it is anyway: at HBC we were trying to get an agreement with one of the luxury developments we were interested in. The developer said: Phase 1 is sold out (they haven't even started it), and for Phase 2 I have too many estate agents with agreements already. We did manage to strike the deal, but it appears that there is strong demand from Europe for new construction, rather than resales.

But that is a subject for another post :-) Enjoy your day, thanks for reading.

 

 

 



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Spanish property prices grinding higher - latest data
09 September 2017

I hope everyone had a nice summer and are back relaxed and ready for more number crunching and thrilling statistics on Spanish property!

Before you read on, spoiler alert: the prices of Spanish properties are continuing to rise. Not at an overheated pace, but a steady grind upwards.

The data for the 2nd quarter of 2017 have just been published 2 days ago by INE, the Spanish statistics institute. The annual variation of the price index (i.e. compared to the 2nd trimester of 2016) is 5.6%:

Annual increase in Spanish property prices 2017

Broken down by type, newly constructed properties have risen by 4.4% and resale properties by 5.8% annually.

When compared to the previous quarter, we also see an average upward sloping trend:

Quarterly price variation of Spanish properties 2017

This set of data is easy to analyse, since it's in the same trend as before, bringing us to prices around 10% higher than the level of 2015. The table below summarises the data:

    Quarterly variation Annual variation
Average index   2,0 5,6
New construction   2,6 4,4
Resale properties   1,9 5,8

These price increases took place based on an increased number of total sale operations, which is reassuring since it implies a broad market advance. The total purchase operations for June 2017 were 166,830, a 9.7% annual increase:

Total number of purchases June 2017

Remember, this is for the whole of Spain. What was more interesting in this data publication was that Andalucia is no longer the leader in percentage price increases. Here is the breakdown by community:

Annual price change by Community 2017

Here comes my personal evaluation of this latest data: I am pleased to see a broad participation in the property market in Spain. The leaders are the capital cities and other northern areas of Spain that have traditionally not been the most popular with foreign buyers. This implies that the local Spanish buyers themselves are fuelling this advance, which to my mind is an indication of a healthy and strengthening economy, where people are feeling more confident.

In coclusion, I would like to see this trend continuing where the Spanish property price index keeps adding on a 2.4% increase in Andalucia and Costa del Sol, rather than a frenetic pace that might lead to imbalances. I will be watching the next set of data after Autumn, which is normally a quiet period for purchases in the south, for more evidence of a broad Spanish market recovery, spread over many areas.

Thanks for reading and, as always, please leave a comment if you have any questions, or visit our Costa del Sol properties website for more statistics: hbcostadelsolproperties.com 

 



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To sell your Costa del Sol property ... raise its price!
22 May 2017

In a previous article I have mentioned that many properties on the Costa del Sol have had their prices raised after a certain period in the market. I wondered what the price path was for properties which actually got sold - it's one thing to raise the asking price of a property but another to sell it at that.

My data sample involves 590 properties that had at least 1 price change through their life on the market, and which then went on to get sold in 2016/17 for that last price point. Not a massive data sample but it spans a wide range of locations, it comes from various agents, and it covers all property types. I was not expecting this:

1. How many decreased vs. how many increased

Properties sold at a price lower than the initial 436
Properties sold at a price equal to the initial (changed, then changed back) 24
Properties sold at a price higher than the initial 129

A whole 33% of the properties sold at a higher price than their initial one! Half of those properties were on the market for less than 300 days - not an unreasonable amount of time to wait for a sale. The midpoint house/apartment/villa was on the market for 251 days.

2. The maximum amount of a price upward change

The top 3 upward price changes were for villas in Nueva Andalucia where the maximum upward price revision was ... 510,000 euros, a 30% increase for that particular property. Of course Nueva Andalucia has some very desirable properties but it is striking that 9.6% of the upwardly-revised properties (not only villas) were located there. Next best locations were Guadalmina and Fuengirola.

3. Similar time on the market

Of course there were also some extremes, for example an apartment in Calahonda had taken 1660 days to sell. However approximately 250 days is what it took for both sets of properties to sell. Which probably means that sellers are not necessarily too desperate to sell, otherwise we would have seen really short periods on the market for properties that were reduced in price, indicating pressure to sell.

My conclusions: despite my average-sized data sample (unfortunately I can only work with the sales price data I have access to), it seems that the desire to get more money for a property is strong. Sellers are willing to change their price upwards and still they manage to only wait a similar amount of time for a sale as the more keen sellers.Long may this optimism last! :-)

 

 

 

 



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Getting technical: Median and Average property prices, up or down?
05 May 2017

The property portal idealista has released some unofficial data for April Spain property prices that show a decrease of 1.3% compared to last year, even though they have increased over the previous month. The official INE organisation has not released its own data yet, but the Costa del Sol is expected to have an increase in general. However, a little data checking never hurt anyone smiley So I have taken our own property data collected every week, and used Mijas villas as a working example because the effect of what I want to show is more pronounced.

It is true that there was a sharp drop of the average price of Mijas villas during the last couple of weeks:

Average price of Mijas villas

Looking at the number of villas on the market for the same location we see there was a corresponding sharp increase:

Number of Mijas villas

So it appears possible that what I mentioned some weeks ago might be happening again - namely, that as owners see rising prices, more and more of them are willing to offer their villa in Mijas for sale. But the average price should not be dropping so much, other things being equal - the point of having an average is that it shouldn't matter how many properties are on the market, the price gets "averaged" out. So I looked at each individual villa price in detail to understand what is happening:

Price of each villa in Mijas

Each data point in the graph above shows the price of that individual villa. As you can see around 80% of the properties are between 400,000 and 1 million euros, and the other 20% are covering a much larger range of 1 m - 2.5 m euros. Could it be that the higher priced properties are being sold fast and therefore the whole "total amount" of euros in the market is dropping? That would explain the average price drop since it is simply the division of (total euro value of properties in the market) / (number of properties).

I cannot offer confidential data but indeed there were a few large amount sales in April of villas in the Mijas area (1.65 m on the 28th, 2.25 m on the 16th, etc) that have therefore brought the average price down, since there are more of the "lower priced" villas left in the calculation. This data is collected from a large agent sample, so even though it is not official, it is quite reliable.

A more accurate indicator is the median property price - I apologise for sounding like a teacher, it is not my intention, just to explain that median is the price of the middle property, i.e. in the graph above half way along the x-axis. For Mijas villas this gives us 695,000 euros for the median villa in Mijas, a level that has been stable for months and even increased slightly (0.1%) over the last month. I.e. if anything this confirms that average prices have wild fluctuations sometimes, even in cases such as these which could be perceived as good news, since higher priced property being sold shows confidence in the market.

In conclusion, I would state that I am guilty of being ever the optimist, including on this occasion where a declining average price actually is due to proportionately more high-valued properties being sold, which might indicate more confident buyers. If you are interested in browsing at the villas in Mijas that I used for this article I leave the link here: https://hbcostadelsolproperties.com/costadelsol/mijas/villa. Thanks for reading.



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British pound rises 2.5% in a day versus Euro
18 April 2017

First things first, I would like to repeat that this is not a political speculation blog :-) However, the effects of political decisions, alongside a myriad other types of effects, do manifest themselves in currency markets - the biggest financial sector on earth. So further to my previous post on Brexit effects  , I am displaying here today's updated GBP vs EUR graph:

GBP to EUR

The green area is the change since the aforementioned blog post on the 13th of March where I stated that the area of 1.10 appears to be potentially strong support and where all the bad news had been absorbed. As it turns out the pound has bounced at that level around mid-March and has surged today to 9% higher than then. It is now sitting above its 200-day average which is normally consider as a long-term support in the financial world.

As an estate agent in Spain, I consider these to be very good news, regardless of the reason for the rise of GBP. It remains to be seen if this will translate in more interest from British buyers - I will be watching the statistics coming out of INE closely.

The point of this post is actually to put my neck out once again and state that I do not believe the British pound will have too much upside. If you were considering transferring money and the exchange rate was one of the factors delaying you, then perhaps you will want to take this opportunity to re-evaluate. Until 2018 I personally do not believe that any clear direction will develop, beyond what has already been traced. I base this on the clear commitment by the Bank of England to "print" what is required to counter-balance any strengthening of the pound, that might cause exports to drop more than what is expected as an effect of Brexit. And strong moves like today will force their hand.

In conclusion, my personal opinion as a blogger is that as far as the GBP/EUR exchange rate goes bear in mind that the high level might be very close. I will admit being wrong without hesitation if I need to! :-)

Thanks for reading.



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Fair price for property on the Costa del Sol - a basic reference
03 April 2017

Taking a break from Brexit related posts, here is a purely Costa del Sol property related subject: by how much do property prices per metre squared vary in a certain location? We all expect euros/m2 to vary between Marbella and San Pedro for example, but how about within San Pedro itself? This question came up when we compared euros/m2 paid by clients along the coast and we realised that some areas had massive variations, and others very close to 0 differences. So check your area of interest below to see if it might be possible to get a better deal for the same square metreage.

Let's look at an example with a graph. The image and datatable below show values for apartment prices per m2. Around the 50% mark we find:

Location: San Pedro de Alcantara

Minimum price pre m2: 1536 euros

Range: 50.7% - i.e. you might find properties with anywhere between 1,536 euros/m2 and 50% higher (3,118 euros/m2)

This might present the property buyer with some opportunities. But first the data:

Percentage variation of prices per m2 for Costa del Sol apartments

Location Minimum Maximum Difference % variation
Reserva de Marbella 1639 1837 198 10.8
Bahia de Marbella 3318 3854 536 13.9
Los Arqueros 2584 3030 446 14.7
Selwo 1517 1912 394 20.6
Calahonda 1816 2386 570 23.9
Benalmadena 1870 2482 612 24.7
Mijas 1458 1962 504 25.7
Elviria 2183 2974 791 26.6
Malaga Centro 2212 3280 1068 32.6
Fuengirola 2255 3524 1269 36.0
Puerto Banus 4367 6968 2601 37.3
Mijas Golf 1804 3022 1218 40.3
Cabopino 2435 4240 1805 42.6
Torremolinos 1980 3639 1660 45.6
Nueva Andalucia 2601 4793 2192 45.7
Malaga 1504 2958 1455 49.2
San Pedro de Alcantara 1536 3118 1582 50.7
La Alcaidesa 1735 3725 1990 53.4
San Luis de Sabinillas 856 1885 1029 54.6
Marbella 3299 7532 4233 56.2
La Duquesa 1629 3935 2306 58.6
Sotogrande Costa 1377 3565 2188 61.4
Guadalmina Baja 1564 4209 2645 62.8
Estepona 1300 4772 3472 72.8
La Quinta 1791 126559 124768 98.6
Alameda 2035 617284 615249 99.7

As you can see, for areas that are relatively small or from a handful of developers, such as Bahia de Marbella, Los Arqueros etc, the percentage variation is small, i.e. any apartment will cost as any other, the main variable being the built area - prices per square metre are very similar. What was unexpected, at least for us, is the fact that large diverse areas like Calahonda or Benalmadena also have narrow price/m2 ranges. This indicates to us that there is high competition, sellers cannot get away with setting a higher-than-average price, so as a buyer you might expect to get a "fairer" price for your property.

In contrast, equally surprisingly, we have compact areas like Sabinillas or Sotogrande with upto 60+% difference in cost per m2. As a buyer in these areas, you might be advised to shop around because it is quite possible to find a very similar property upto 60% cheaper, in the extreme cases.

(Notice that I left out of the discussion the lower and higher data points because they seem like ouliers)

For villas the data is as follows:

Price variation per square metre for Costa del Sol villas

Location Minimum Maximum Difference % variation
Alhaurin Golf 2230 2517 287 11.4
La Alcaidesa 2056 2648 592 22.4
Bahia de Marbella 3902 5200 1298 25.0
La Linea 1221 1798 577 32.1
Calahonda 2100 3333 1234 37.0
Casares Playa 1714 2987 1273 42.6
Valle Romano 1387 2453 1066 43.4
Bel Air 1775 3213 1437 44.7
Arroyo de la Miel 1777 3375 1598 47.3
Cancelada 2797 5391 2594 48.1
Nueva Andalucia 3200 6240 3040 48.7
La Duquesa 1471 2937 1467 49.9
Guadalmina Alta 1750 3568 1818 50.9
Los Arqueros 2392 5018 2626 52.3
Benahavis 2176 4639 2462 53.1
Cabopino 2483 5384 2901 53.9
El Madronal 2872 6333 3461 54.6
Benalmadena 1622 3769 2147 57.0
Los Monteros 4018 10040 6022 60.0
Selwo 1410 3583 2173 60.6
Elviria 2205 5638 3433 60.9
Monda 1000 2750 1750 63.6
San Luis de Sabinillas 934 2600 1666 64.1
New Golden Mile 1991 5827 3835 65.8
San Pedro de Alcantara 2230 6858 4628 67.5
Puerto Banus 3542 10972 7431 67.7
Sotogrande Costa 1495 4967 3472 69.9
El Paraiso 3037 11964 8926 74.6
Torremolinos 825 3661 2836 77.5
Estepona 1582 7515 5934 79.0
Fuengirola 1197 5993 4797 80.0
La Zagaleta 3277 18125 14848 81.9
Marbella 1700 25848 24148 93.4
Malaga 1729 82529 80800 97.9
Torrenueva 2244 476958 474715 99.5

Again, if you are looking for a villa in El Paraiso, or Elviria then it might be worth your while to compare prices per m2 to ensure you are getting a fair deal in the market.

I hope you find the data as thrilling as I do :-) We have many more property statistics on our website, so if you are interested either click the links on the right or send me a PM here, I can forward you the Excel data or give you some more hints depending on your Costa del Sol area of interest.

Till next time, thanks for reading.

 

 

 



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Brexit's full 2016 effect on Spanish property
13 March 2017

Brexit's full 2016 effect on Spanish property

We now finally have the full 2016 property price data, which can allow us to advance another step in understanding the issue from my previous post "Post Brexit - how much exactly is Costa del Sol real estate affected".

The prices in the 4th trimester of 2016 rose by half a percent compared to the previous quarter, and reached 4.5% for the year for resale properties and 4.3% for new construction. The updated graph is below:

Price index for Spanish properties 2016

As you can see, 6 months after the Brexit referendum, the effect from the reduced number of British buyers has not been transmitted yet to property prices. In another previous post, I mentioned: "an interesting datapoint is the percentage of foreign buyers: 13.5% of property purchases in 2016 were by foreigners. British buyers were lower compared to 2015, as expected, from 23.9% to 16.4%, however still ahead of German and French buyers at 9% and 8% respectively". As an explanation I would offer that demand from other nationalities has picked up the gap from British buyers. We at HBC have noticed as much, especially Scandinavians and French.

As an alternative explanation for the increase in Spanish property prices, rather than the expected decrease, we could look at the GBP exchange rate. As you can see below, it has dropped like a rock after the Brexit result and has languished near 1.13 for a while now.

GBP to EUR graph over 2016

(graph from http://www.xe.com/currencycharts/?from=GBP&to=EUR&view=1Y )

However, regardless of what final decision is taken (this poster does not speculate politically!), it seems that there is strong support at the 1.10 point. Currency money managers are usually ahead of the game and I look to hints in their behaviour to try and predict the future. Note how the volume graph shows that there were hardly any trades of currency at the lowest points - noone willing to sell more? Rising volume on the up and declining volume on the down, that in my humble opinion is a sign that the currency managers do not expect further British pound declines. Property buyers want stability so that they can arrange their budgets, and this stability at an albeit lower level is perhaps the reason why British buyers are still interested.

A third reason of course may have nothing to do with Britain and simply be lack of alternatives in a terrified world for retirement/holiday properties.

In any case, it seems that prices are rising despite the "wall of worry" being climbed by the market. This month will be decisive for Brexit and we are eagerly awaiting final decisions so that we can finally get through to the other side!

Thanks for reading.



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3 graphs you need to see if you are selling your Costa del Sol property
04 March 2017

Always on the lookout for possible trends! And trend changes.

I have been looking at price data for Costa del Sol properties lately to confirm or reject the rising trend of 2016. I then realised that I could get an advance hint of the possible future price behaviour by looking at the supply side. As we know, the price is a function of supply and demand. As we have seen on previous posts, the demand has been steadily rising from Scandinavia, France and Germany, even though it has clearly dropped from the UK. Overall sales have increased. By looking at how the number of properties has changed with time, we can try to identify any trends to get a feel of probable future price movement.

I will simply put the graphs and datatabes here first and analyse them below.

Number of villas on the market in Costa del Sol:

Number of villas on offer on Costa del Sol

Date   Number of villas
15-Oct-16 6702
19-Nov-16 6644
17-Dec-16 6712
14-Jan-17 6641
11-Feb-17 6536

 

Number of townhouses on the market in Costa del Sol:

Date   Number of townhouses
15-Oct-16 3068
19-Nov-16 3106
17-Dec-16 3109
14-Jan-17 3063
11-Feb-17 3048

 

Number of apartments on the market in Costa del Sol:

Number of apartments on Costa del Sol

Date   Number of villas
15-Oct-16 6702
19-Nov-16 6644
17-Dec-16 6712
14-Jan-17 6641
11-Feb-17 6536

 

I hope you can agree that there is a clear downward trend in the number of all three types of properties in the market since 2016. I would assert that, given the fact that sales have not decreased and in fact have risen, the price is likely to go up as supply of available properties in the market goes down. Obviously this would bring more properties in the market as more owners are motivated, but the point is to show that we may be witnessing the beginnings of a new dynamic in the market. Coupled with my previous post on how many of price changes are currently increases rather than decreases, this indicates to me that the probabilities of increased property prices are higher.

For more details and further confirmation you can check out our graphs on our website, the trend is similar accross the board, from Sierra Blanca villas to Marbella apartments.

Looking forward to your comments, I hope you enjoyed this post.

 

 

 



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How to claim Spanish mortgage expenses from banks
24 February 2017

It is not widely known that the Supreme Court in December 2015 declared certain mortgage clauses as abusive. Most banks imposed on their clients the payment of all expenses of formalization of mortgages, when it was deemed that banks should assume at least a part, since it is reasonable that also the banking entity is equally interested in registering the mortgage deed. The banks are evidently feeling the pressure, since some of them, such as BBVA, Banco Santander, CaxiaBank, Banco Sabadell, Bankia and Ibercaja have already modified their clauses to assume part of these expenses, although they have not yet officially announced it. Several campaigns are under way to claim these mortgage settlement costs. The first step is to go to the Client Service department of the client of the corresponding bank, which in practice means asking for the "libro de reclamaciones".

The actual text of Decision 705/2015 of December 23 of the Supreme Court is as follows (non-professional translation):

"All taxes, commissions and expenses incurred in preparing, formalizing, correcting, writing, altering, including division, segregation or any change that implies alteration of the guarantee - and execution of this contract, and for the payments and refunds derived therefrom, as well as for the constitution, maintenance and cancellation of its guarantee, as well as the premiums and other expenses corresponding to the insurance of damages, which the borrowing party is obligated (by the bank) to have in force" .

This clause continues, authorizing the borrower to charge the Bank with:
- registration of the mortgage in the Land Registry
- notary expenses
- accountancy (Gestor) expenses

In case of non-payment by the bank, the decision also allows for the judicial or extrajudicial claim of the debt, including attorney and attorney fees.

Similarly, and in some cases identical, this clause is written in almost all mortgage loan agreements.


What is the way of proceeding if you were required to pay all expenses, commissions and taxes of the mortgage loan?

In the first place, a complaint must be made to the Customer Service Department of the Bank or Entity with whom the mortgage loan was contracted, or, if applicable, the new Entity that has merged or absorbed the one to whom it was requested.

After two months from the complaint, whether or not the Customer Service Department has replied, or if the response has been negative, you may proceed to file the corresponding legal action before the judicial party of the domicile of the borrower or of the Bank's registered office.

What must be requested in the lawsuit brought before the Court, will be the "nullity of the abusive clause", and the restitution of expenses paid as a result of that agreement, which must be perfectly documented with their corresponding invoices. For the type of procedure to be filed, it will be necessary to use a lawyer.


What expenses, taxes and commissions can be claimed?

Assuming that only the restitution of the costs corresponding to the formalization of the mortgage, and not of the sale, can be requested, the following will be object of claim:

 -   Notary's Invoices and Property Registry. The Supreme Court says in its ruling that, "with regard to the formalization of notarial deeds and registration of the same (necessary for the constitution of the security right - that is, the mortgage), both the fee of notaries and the notary of the registrars of the property, attribute the payment obligation to the applicant of the service in question or to whose favour the right is registered. And it is undoubtedly the lender who has the main interest in the documentation and inscription of the deed of mortgage loan, because he thus obtains an executive title, constitutes the real guarantee, and acquires the possibility of special execution". In other words, the Courts are siding with the borrower since it is deemed s/he had the weakest negotiating position, therefore the registration expenses need to be borne by the strongest party.

By not allowing a minimum reciprocity in the distribution of the costs incurred as a result of the notarial and registry intervention, making all the debtor pay, an imbalance is generated to the consumer, reason why the clause is abusive.

 -   Tax of Documented Legal Acts. According to the Law that regulates the Tax on Patrimonial Transactions and Documented Legal Acts: "the acquirer of the property or right and, failing that, the persons who request or request the notarial documents or those in whose interest they are issued"

The Supreme Court understands that in reference to the Tax on Documented Legal Acts, the payer of the tx is the Bank or lender. So it is advisable to include these in the claim.


What documents do I need to collate for the initial complaint to the Bank?

- The title deeds (look for "Escritura de Compraventa")
- Invoices by the Notary office
- Invoices by the Gestoria, ideally detailing the tax paid and specifically look for the initials "AJD" which stands for "Actos Juridicos Documentados")
- Model 600 form which shows the actual tax paid. It is a yellow form, an example of which you can see below:

If you want to employ the services of a Gestor to draft your complaint you can search for "gestorias reclamar gastos hipoteca" and you will get a selection, hopefully in your area. In case you want to draft it yourself at this initial stage, here you can download a sample document in Spanish to make your claim.

 

What is the deadline for requesting the nullity of the clause and claiming the return of the amounts paid?

The term for those mortgages that are still in force, is 4 years to be counted from the day following the date of the Judgment of the Supreme Court, i.e. that term will end on December 24, 2019; And for those mortgages that have been fully paid, the claim can be made if your total payment was made within the 4 year period between December 23, 2011 to 2015.

Hope the above helps as a start. Remember, there have been around 80,000 claimants already according to consumer associations, so there are a lot of claims pending without final decisions. It remains to be seen how this judgement will be applied.

And remember: this is a blog of an interested party - NOT legal advice! :-)

 



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