Buyer profiles for housing in Spain in 2014

by

Calle de la Playa de Riazor, 22. 28042 MADRID - T: +34 91305694 - E: [email protected] www.basicohomes.com - www.bservicer.es - basicoblog.com

Buyer profiles for housing in Spain in 2014

“Because people are still buying housing in Spain”

April 2015

Buyer profiles for housing in Spain in 2014. April 2015. 2

Index

1 Introduction 3 Conclusions 4 Buyer profiles 11 Methodology 20

3

2

4


Introduction 1

The good news during the beginning of 2015 has been the increase experienced in the volume of housing transactions in 2014, especially if we listen to statistics coming from the General Council of Notaries, which places it at a 19,1%, with a total volume of 361.601 transactions. Other organisations have not been that optimistic. The INE figures of growth are at 2,2%, whiles the Association of Registrars offers a decrease of 3.1%, both statistics reaching around 318.500 transactions. ¿Who is right then? ¿Is there actually more demand and more sales of homes? ¿Is the residential stock really decreasing? Our study provides information about the purchase of homes at a micro level, based on transactions made by Básico Homes between the 1st of January and the 31st of December 2014. Between these dates, a total of 14.322 people who were looking for a home in the country were assisted, of which 1.003 ended up making a purchase. The data that originate from these “searchers” and “purchasers” of housing are analysed carefully and filtered as they constitute a source of valuable information to evaluate the behaviour of the damandants of housing and through which we believe we can get an answer for the question: ¿who bought homes in Spain in 2014?

According to official figures, in 2014 more than 300.000 residential units were sold in Spain. ¿Does this figure reflect the reality of the market?


Conclusions 2

Evolution of transactions and stock The macro data mask the reality of the market. The two sources through which we can control the transactions for housing offer an increase in the activity in 2014, but… ¿who are buying homes in the country?

Through the Association of Registrars we can know the volume of purchases made by individuals or legal entities. As we can see in Table 1, the number of transactions made by legal entities has increased notably over the last years, to almost 25% of the transactions, a reflection of the reality of the current market in which we can distinguish the purchase of large portfolios by investors.

The results for 2014 have not been published yet, but supposing an increase of only 2% in the volume of transactions made by legal entities, we would find a market situation in which the real purchaser, individual people, will have decreased in volume. Supposing that the proportion from 2013 has been maintained, the increase in activity on behalf of the final purchaser would be a little over 2%. ¿Is there really an increase in the sales?

Source: INE y Association of Registrars. Estimation of the situation in 2014 carried out by B-Servicer under the hypothesis of an increase of 2% of the transactions where the purchasers are legal enitities.

Table 1. Transactions of housing in Spain in function of the purchaser

Reparto de las compras Volumen de compras % Variación de las compras

Persona Física

Persona Jurídica

Persona Física

Persona Jurídica

Total Persona Física

Persona Jurídica

2008 94,89% 5,11% 523.869 28.211 552.080 - -

2009 92,43% 7,57% 382.099 31.294 413.393 -27,1% 10,9%

2010 93,47% 6,53% 410.886 28.705 439.591 7,5% -8,3%

2011 82,23% 12,77% 295.883 63.941 359.824 -28,0% 122,7%

2012 81,35% 18,65% 259.127 59.407 318.534 -12,4% -7,1%

2013 78,07% 21,93% 244.041 68.552 312.593 -5,8% 15,4%

2014 76,07% 23,93% 242.959 76.430 319.389 -0,4% 11,5%

% of Purchases Total Purchases % Annual variation

Individual Individual Individual Legal entity

Legal entity

Legal entity

450.000 350.000 250.000 150.000 50.000 50.000 150.000 250.000 350.000 450.0000 years5 years

10 years15 years20 years25 years30 years35 years40 years45 years50 years55 years60 years65 years70 years75 years80 years85 years90 years95 years

100 +

2024 2019 2014 2024 2019 2014


Conclusions 2

The final conclusion seems to point to the final purchaser maintaining the volume of activity in 2014 with respect to 2013, slowing down the decrease that continues since the crisis. The stock is decreasing at an inferior rate than that reflected by the total volume of the official statistics, as a consequence of the large investment operations where residential units are returning to the market to be sold or rented by final purchasers.

Evolution of the demand The main buyer profile of housing in Spain is the “home creator”, which corresponds to people between the age of 20 and 35. These entail 11,1 million people in 2004, decreasing to 9,3 million in 2014 (down by 15,7%). This group will descend by 1,7 million more by 2024 (another 18%), reaching 7,6 million inhabitants. This situation will influence panorama of the residential market that will be drawn in the following 10 years. However, the labour market, economic situation and the access to credit for this group of buyers is generating an important pocket that could go to market in the future if the actual conditions improve: − The people between the age of 16 and 29 that live with their families accounted for 6,5% of the population in 2008, the lowest figure from the historical series. In 2013, this percentage was 17,6% (Eurostat). − According to the Emancipation Observatory, elaborated by the Youth Council of Spain, only 22,1% of young people under the age of 30 have achieved residential independence.

The stock decreases at an inferior rhythm than reflected in the official figures, as part of the transactions of housing take place between owners and investors

The potential demand of “home creators” will be notably reduced in the following years

Graph 1. Population pyramid in Spain

Source: INE

12,1%

28,8%27,1%

10,8%

6,2% 5,7%3,8%

5,6%

15,7%

30,8%

20,5%

10,4%

6,0%4,6%

2,6%

9,3%

0%

5%

10%

15%

20%

25%

30%

35%

Menor o igual a 50.000 €

50.001 € -75.000 €

75.001 € -100.000 €

100.001 € -125.000 €

125.001 € -150.000 €

150.001 € -175.000 €

175.000 € -200.000 €

Más de 200.000 €

Evolución Precio de venta

Año 2013 Año 20142013 2014

Less than or equal to

More than

5,0%

23,3%

29,5%

14,5%11,7%

3,1% 3,8%0,6%

3,8% 4,6%4,7%

15,1%

30,0%

17,7%15,5%

3,7% 3,5%2,0%

4,0% 3,8%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

35,0%

Superficie (m2)

Año 2013 Año 20142013 2014

2,3% 8,1%

34,1%

41,5%

14,0%

Dormitorios

0 Dorm.

1 Dorm.

2 Dorm.

3 Dorm.

Más de 3 dorm.

0 Bd

1 Bd

2 Bd

3 Bd

More than 3 Bd


Conclusions 2

Characteristics of housing purchased in 2014 From the results of the study carried out with using Básico Homes’ data, we can deduce that purchased housing has the following characteristics: − Bedrooms: as we can observe in Graph 2, more than 75% acquired a home with 2 or 3 bedrooms, resulting in an average of 2,6 for the total of buyers. − Surface: the average surface was 105,8 m²c. 78,3% of purchased homes are between 50 y 130 m²c. The differences in size of the homes purchased in 2013 and 2014 are minimum. A decrease in the purchase of homes with surface area smaller than 70 m²c takes place. Conversely, the acquisition of homes with a surface area between 90 y 130 m²c increases. − Price: the average Price of purchased housing in 2014 was 97.459 €, which was greater tan the 96.680 € in 2013. In 2014 the percentage of homes located in the lower price intervals increases, though the volume of transactions above 200.000 € is notably greater, as we can see in Graph 4. The price of the most economic sale was 3.750 €, corresponding to an apartment in the province of Cáceres. The most expensive home had a price of 560.000 €, found in Madrid. The average budget that buyers had to purchase with was above the acquisition price, concretely 104.818 €.

Source: Básico Homes

Graph 3. Surface areas of homes purchased in 2014 (m²c)

Graph 2. Nº of bedrooms in purchased homes in 2014


Graph 4. Price of homes purchased in 2014


22,8% 23,5%

11,5%

18,1% 19,0%

5,1%

0%

5%

10%

15%

20%

25%

Cambia de alquiler a compra

Casarse / independizarse

Inversión Mejora o ampliación

vivienda

Segunda residencia

Otros

Motivación de compra

Rent to owner

Get Married/ Become

Independent

Invest Improve home

Second home

Others

51,3%

28,3%

20,4%

Propia

Alquilada

Vive con los padres

Owners

Rent

Lives with his parents

29,1%31,2%

22,5%

13,4%

3,8%

19,9%

36,1%

23,7%

12,3%8,0%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

35,0%

40,0%

Menos de 30 31 - 40 41 - 50 51 - 60 Más de 60

Edad

Año 2013 Año 20142013 2014


Conclusions 2

Characteristics of the demandants The average age of buyers for housing is 40,6. If we compare the average age of purchasers for housing in 2013 with those in 2014, we can affirm that there has been an increase in the age of purchase. This reflects on the percentual decrease of buyers under the age of 30 and the increase of purchasers above the age of 60. With regards to the previous residential situation, approximately half of the housing purchasers had ownership of another home before obtaining their new home. The motivating reasons for purchase are very diverse but, in general, in 71% of the cases, the purchasers will use the home as habitual residence, in 17,5% as vacational and in 11,5% as investment. Within the classification of habitual residence, the most important group continued to be “home creators”. The most relevant fact in 2014 was the special relative importance of those homes that “switch from lease to purchase”, which have a similar volume to the first group. Regarding labour situation, 62,8% of the buyers work for others, 19,6% are autonomous-businessmen, el 8,7% work as officers, el 5,6% are retired and 3,3% have a different occupation.


Graph 5. Age of the buyers


Graph 6. Residential location before the purchase


Graph 7. Motivating reasons for the purchase

More than Less than

27,1%

0,7%

2,7%

12,2%

24,3%

31,1%

1,7%

30,8%

0,2%

1,5%

7,9%

16,5%

31,7%

11,4%

0,0% 5,0% 10,0% 15,0% 20,0% 25,0% 30,0% 35,0%

No necesita

1% - 20%

21% - 40%

41% - 60%

61% - 80%

81% - 100%

100% + gastos

Financiación

Compradores BuscadoresSearchers Purchasers

No need

30,4%

0,2%

1,2%

8,9%

16,0%

31,7%

11,6%

30,8%

0,2%

1,5%

7,9%

16,5%

31,7%

11,4%

0,0% 5,0% 10,0% 15,0% 20,0% 25,0% 30,0% 35,0%

No necesita

1% - 20%

21% - 40%

41% - 60%

61% - 80%

81% - 100%

100% + gastos

Financiación

Año 2014 Año 2013

CONTADO 30,8%

Subrrogación65,4%

Otros bancos34,6%

HIPOTECA69,2%

Cómo financian las operaciones


Conclusions 2

Form of payment and financing Analyzing the form of payment, 69,2% of buyers needed funding and 30,8% payed in cash. From the cases where a mortgage was needed, in 65,4% of the cases it was done in the entity that owned the property, while in the remaining 34,6% it was done in other institutions. In 2013, this change occurred in only 19% of the cases, which means that there has been an increase in the mortgage activity on behalf of the financial entities. 83,3% of the mortgages were variable interest rates, 15,2% were mixed and 1,5% were fixed. The average amount for mortgage conceded to housing purchasers was 87.494€, the lowest being 12.000€ and the greatest being 568.000€. Los mortgages have and average duration of 27 years, ranging between 4 and 40 years. The average mortgage percentage (LTV) needed by purchasers to finance the acquisition of a property is 87,4% of the total price. As can be observed in Graph 9, the needs for funding increase with regards to what had been planned before purchase, especially in the higher boundaries. The general situation regarding the needs for funding has not experienced any changes in 2013 and 2014, as can be appreciated in Graph 10. The need for financing is directly related to the age of the buyer. This way, nearly 90% of those younger than 30 need funding, as well as more than 80% of those between the age of 31 and 40.

Graph 9. Funding: searchers vs purchasers


Graph 10. Funding: purchasers in 2014 vs 2013



Graph 8. Funding for the operations

2013 2014

No need

CASH MORTGAGE

OTHER BANKS

SUBROGATION

70,6%

86,1%

96,0%

89,2%

78,6%

29,4%

13,9%

4,0%

10,8%

21,4%

Menos de 30

31 - 40

41 - 50

51 - 60

Más de 60

Necesidad de aval según grupo de edad

NO SIYES

Less than

More than

11,6%

16,8%

36,3%

50,0%

72,6%

88,4%

83,2%

63,7%

50,0%

27,4%

Menos de 30

31 - 40

41 - 50

51 - 60

Más de 60

Financiación según edad

NO SIYES

More than

Less than

100%

87,5%

84,4%

86,3%

72,5%

12,5%

15,6%

13,8%

27,5%

Menos del 40%

41% - 60%

61% - 80%

81% - 100%

100% + gastos

Necesidad de aval según grupo de financiación

NO SIYES

Less than


Conclusions 2

Conversely, a little more than 25% of those over the age of 60 need financing. 84% of the purchases financed were done without the need for a guarantee. The request for guarantees by financial institution increases, especially, when funding for the entire purchase is needed, as can be seen in Graph 12. Mortgages guaranteed by third parties became more relevant for the youngest of purchasers and for those of an age exceeding 60.


Graph 11. Financing depending on age


Graph 12. Need for guranteed depending on % of financing


Graph 13. Need for guarantee depending on age

Purchased housing with 2-3 bedrooms, 105 m²c and a price of

97.500 €.

40 year old buyers , who own a property and are employed by others.

Reasons for purchase are highly diversified.

Nearly 70% of the purchases are financed with variable interest , at an

average age of 27 and normally for 80% of the price or more.


Conclusions 2

Purchase times When a Spanish family begins the process of searching for a new home, they do not plan on excessively delaying their decision. Nearly 95% of the families who searched for a home in 2014 had thought of acquiring in a period no longer than 6 months (73,8% in less than 3). These limits were actually met by buyers, as an identical percentage of people achieved to buy their homes in less than 6 months. No other big differences exist between the different types of buyers that can be found in the market. We can only highlight those who dispose of a budget, who plan to extend their search a little longer.


Table 2. Purchase times

< 3 meses 3 - 6 meses 6 - 12 meses 1 - 2 años Más de 2 años Total

< 3 meses 79,6% 11,4% 4,0% 2,8% 2,2% 100%

3 - 6 meses 61,3% 21,0% 9,4% 6,1% 2,2% 100%

6 - 12 meses 45,9% 29,7% 10,8% 10,8% 2,7% 100%

1 - 2 años 66,7% 16,7% 16,7% 0,0% 0,0% 100%

Más de 2 años 50,0% 33,3% 0,0% 0,0% 16,7% 100%

Total 74,1% 14,4% 5,5% 3,8% 2,3% 100%

Tiempo real de compra

Tiempo estimado de

compra

88,5 % of buyers acquired their home within 6 months from the

start of their search.

Real purchase time

Estimated purchase time

< 3 months

< 3 months

3-6 months 6-12 months 1-2 years More than 2 years

3-6 months

6-12 months

1-2 years

More than 2 years

Buyer profiles for housing in Spain in 2014. March 2015. 11

Buyer Profiles 3

Amongst Básico Homes´ clients in 2014 we can find 6 main types of buyers. The definitions and characteristics of each one of them are the following: Home creator: This is the most numerous group. They are people who decide to buy a home with the objective of marriage or emancipation. They compose 21,8% of the total purchasers and 15,4% of the searchers. The home creators are people of an average age of 30,9 (31,8 for the searchers) and an average income of 90.694€ (106.648€ for those searching), need 77,9% financing (77,4% of all searchers) and tend to buy property of 2,7 average bedrooms (2,5 rooms for searchers). The average price of housing they buy 84.856€. Buyers who lived as tenants: This group represents 20,6% of all the buyers and 17,8% of the searchers. Composed of families that used to live rented out and have decided to purchase their own home. Typically are people of an average age of 37 (37,5 for those searching) and an average budget of 93.867€ (103.729€ for searchers), need around 73,1% financing (76,4% for searchers) and buy a home of 2,8 average bedrooms (2,7 for searchers). The average price of property acquired by those composing this group is 92.455€. Holiday home buyers: Formed by clients who generally own a home and acquire a second property for holidays or weekends. Represent 16,1% of the buyers and 15,7% of those searching. People in this group are of an average age of 47,7 (49 for those searching), with a budget of 88.267€ (96.868€ for searchers), need financing around 44,5% (44,3% for searchers)

And purchase property of 2,2 bedrooms on average (same as the searchers). The average Price of property bought by this group is 87.311€. Home replacer: Formed by people who own property and decide to switch place of residence o to liver in a home with different characteristics. The members of this profile constitute a 15,6% of total housing buyers and 22,4% of the searchers. With an average age of 43,3 (43,2 of the searchers), a budget of 141.167€ (131.632€ for searchers), they need around 65,8% financing (59,9% for those searching) and tend to purchase property of 3 bedrooms on average (2,9 rooms by searchers). Typical homes they buy have an average price of 125.754€.


Buyer profiles 3

Investment buyers: People who decide to acquire housing as a form of investment. This profile of buyers represent 10,5% of the total buyers and 11,4% of all searchers. Investment buyers are of an average age of 48 (46,2 for those searching), with a budget of 88.044€ (90.909€ of searchers), need around 28,1% financing (30,6% of searchers)and tend to buy property of 2,1 average bedrooms (1,9 for searchers). The average purchase price of housing they buy is 69.784€. “Prime” buyers: This group includes people with a budget above 250.000€, independent of the type of previous residence and type purchased. PRIME buyers compose 2,4% of the total buyers and 8,5% of those searching. Integrated by people of an average age of 44,4 (42,1 for those searching), with an average budget of 299.136€ (332.715€ for searchers) and who need around 50,3% financing (57,4% for searchers). Tend to acquire housing of 3,2 average bedrooms (the same for those searching), with an average price of 302.354€.

COMPRADORES 2014 Presupuesto Precio Venta Edad Dormitorios % Financiación % sobre totalFormador de Hogar 90.694 € 84.856 € 30,9 2,7 77,9% 21,8%Cambio alquiler a compra 93.867 € 92.455 € 37,0 2,8 73,1% 20,6%Residencia Vacacional 88.267 € 87.311 € 47,7 2,2 44,5% 16,1%Reponedor de Hogar 141.167 € 125.754 € 43,3 3,0 65,8% 15,6%Inversor 88.044 € 69.784 € 48,0 2,1 28,1% 10,5%PRIME 299.136 € 302.354 € 44,4 3,2 50,3% 2,4%Otro 101.662 € 92.692 € 47,5 2,3 46,7% 6,5%NS/NC 105.059 € 85.847 € 47,0 2,5 21,0% 6,4%Total 104.818 € 97.459 € 40,6 2,6 60,5% 100%


Table 3. Types of buyers and main characteristics

With regards to previous years, “home creators” are still the most numerous, with “buyers who used to live as tenants” gaining in strength and “home replacers” decreasing in number

Home creators Buyers who lived as tenants Holiday home buyers Home replacers Investors Prime Others N/A

Buyers 2014 Budget Selling price Age Bedrooms % Financing % Of total

15,4%17,8%

15,7%

22,4%

11,4%8,5% 8,8%

21,8% 20,6%

16,1% 15,6%

10,5%

2,4%

13,0%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

Formador de Hogar

Cambio alquiler a compra

Residencia Vacacional

Reponedor de Hogar

Inversor PRIME Otro - NS/NC

Perfil Buscadores - Compradores

Buscadores CompradoresSearchers Purchasers

Home creators

Buyers who lived as tenants

Holiday home buyers

Home replacers

Investors Others Prime

22,2%

14,5%

17,8%

20,7%

12,1%

1,6%

7,3%

3,9%

21,8% 20,6%

16,1% 15,6%

10,5%

2,4%

6,5% 6,4%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

Formador de Hogar

Cambio alquiler a compra

Residencia Vacacional

Reponedor de Hogar

Inversor PRIME Otro NS/NC

Evolución Perfil

Año 2013 Año 20142013 2014


The distribution of these profiles show us that those who buy housing for the first time, either for emancipation from parents or to switch from renting to purchase, compose more than 4 out of every 10 sales. As can be seen in Graph 14, the “home creators” and “buyers who used to rent as tenants” have a greater have a greater relevance as purchasers than as searchers, while “home replacers” represent a smaller part of purchasers than those who search. This can be motivated either by the greater urgency to buy in the first two groups or because they find what they look for in Básico Homes. If we compare results in 2013 and 2014 we can observe that the profile for “buyers who used to live as tenants” gained importance, mainly in detriment to “home replacers”.

Sourcee: Básico Homes

Graph 14. Buyer-seller profiles


Graph 15. Profile evolution

Buyer profiles 3

Home creators

Buyers who lived as tenants

Holiday home buyers

Home replacers

Investors Others Prime N/A

13,2%

0,0% 1,4%

6,1%

22,6%

39,6%

17,0%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

35,0%

40,0%

45,0%

No necesita 1% - 20% 21% - 40% 41% - 60% 61% - 80% 81% - 100% 100% + gastos

Financiación Formador de hogar

No need financing


Buyer profiles 3

Home creators This is the most numerous group, represented by 21,8% of purchasers for housing in 2014. The need to purchase by the members of this profile give them a greater importance among buyers than among searchers. The searchers with biggest budgets aren´t the ones that end up buying and generally, purchasers tend to go for a price lower than their budget. Where do they work? Buyers: 77,8% are employed by others, 10,8% are government officials, 8% are autonomous and 3,3% have other occupation. Searchers: 82,7% of the buyers are employed by others, 7,2% are government officials, 7,1% are autonomous and 3,1% have other occupations. How do they buy? Buyers: 41,5% buy alone, while 58,5% need help in the purchase. From those who need help, around 60% do so with aid from their parents, 37,3% with their sentimental partner, and the remaining 2,7% buy with help of other family members. Searchers: 27,1% of the searchers do not need help in buying, while 72,9% do need it. 50,8% of those who do would buy with their sentimental partner, 45,7% with help from their parents and the remaining 3,5% with help from other family members and friends.

Graph 16. Financing for home creators



Table 4. Home creators

Do they have friends/family in the area? 78,4% of purchasers have family or friends in the area where the property is located. With regards to searchers, it is 53,3%. Do they need financing? Nearly 80% of buyers corresponding to the home creator profile need more than 60% financing to buy their home. On the other hand, 13,2% do not need funding.

FORMADOR DE HOGAR

Buscadores Compradores

Presupuesto 106.648 € 90.694 €Precio Venta n.a 84.856 €Edad 31,8 30,9Dormitorios 2,5 2,7% Financiación 77,4% 77,9%% sobre total 15,4% 21,8%

Home creators Searchers Purchasers

Budget Selling price Age Bedroom % Financing % Of total

CAMBIO ALQUILER A COMPRA




Buyer profiles 3

Buyers who lived as tenants Composes 20,6% of the total housing purchasers in 2014. Formed by people that lived as tenants and who decide to buy their own property as son as they have enough economical solvency. This is the group that has most grown in the last year, representing a greater percent of buyers than searchers.

Graph 17. Financing for buyers who lived as tenants



Table 5. Buyers who lived as tenants

Where do they work? Buyers: 69,6,% are employed by others, 14,9% are autonomous, 9,3% are government officials, 1,5% are retired and 4,6% have a different occupation. Searcher: 76% of searchers are employed by others, 9,3% are autonomous, 8,3% are government officials, 3,2% are retired and 3,3% have another occupation. How do they buy? Buyers: 50,3% purchase on their own, while the rest receive support from others. From those who need help, 63,9% buy with their sentimental partner, 27,7% with aid from their parents and the remaining 8,4% with help from other family members. Searchers: 32,5% of searchers do not need aid to buy. Out of the other 67,5%, 78,9% make a decision with their sentimental partner, 16,6% are receive help by their parents and the remaining 4,5% do so with other family and friends. Do they have friends or family in the area? 74,6% of buyers have friends or family in the area where the purchased property is located, though this percentage decreases to 48,5% for searchers. Do they need financing? More than 70% of these buyers need at least 60% funding in order to purchase.


Buyers who lived Searchers Purchasers as tenants

21,5%

0,5% 1,0%4,2%

16,2%

37,7%

18,8%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

35,0%

40,0%


Financiación Cambio alquiler a compra

No need financing

44,7%

0,0% 1,3%

14,0% 14,0%

21,3%

4,7%

0,0%5,0%

10,0%15,0%20,0%25,0%30,0%35,0%40,0%45,0%50,0%


Financiación Residencia vacacional


Buyer profiles 3

Holiday home buyers Composed by buyers that already own a property and are buying a second home for vacational use or weekends. This type of buyers need less financing than the previous buyer profiles. Over the last years, the average age for these type of buyers has progressively increased. ¿Where do they work? Buyers: 58,2% are employed by others, 24,2% are autonomous, 9,2% are retired, 7,2% are government officials and the remaining 1,3% have a different occupation. Searchers: 58,2% of searchers are employed by others, 16,8% are autonomous, 15,1% are retired, 7,1% are government officials and the remaining 2,8% have a different occupation. How do they buy? Buyers: 49,6% buy alone. From the rest, 89,8% receive help from their sentimental partner, 6,8% from their parents and the remaining 3,4% are aided by other friends and family. Searchers: Half of the searchers do not need help to purchase property, while the other half do. Of those who do, 91% would buy with help of their sentimental partner, and the remainder would do so with help from friends and family.

Graph 18. Financing for holiday homes



Table 6. Holiday home buyers

Do they have friends or family in the area? 60% of those buying have friends or family in the area where the property is located, a percentage similar in size for those searching for housing. Do they need financing? Nearly half of the holiday home buyers (44,7 %) do not need funding. Only 1 out of every 4 buyers need more than 80% financing.

No need financing

RESIDENCIA VACACIONAL




Holiday home Searchers Purchasers buyers

23,8%

0,0%2,0%

8,6%

17,9%

37,1%

10,6%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

35,0%

40,0%


Financiación Reponedor de hogar


Buyer profiles 3

Home replacers Constituted by people who own a home but due to diverse reasons decide to substitute it for another one with different characteristics or in a different location which will better match their life style. Home replacers were the most numerous group for those searching for housing, but not for those purchasing. Possibly the lesser need for acquiring a new home leads to them not buying if they do not find the “ideal home”.

Graph 19. Financing for home replacers



Table 7. Home replacers

Where do they work? Buyers: 64,5% of home replacers are employed by others, 16,4% are autonomous, 8,6% are government officials, 8,6% are retired and the remaining 2% have a different occupation. Searchers: 65,7% are employed by others, 14,7% are autonomous, 9,3 are government officials, 8,5% are retired and the remaining 1,8% have a different occupation. How do they purchase? Buyers: 42,2% buy alone, while 57,8% share their purchasing decision with others. Out of these, 91,9% buy with help from their sentimental partner, 5,4% are aided by their parents and the remaining 2,7% are helped by other friends and family. Searchers: 32,3% do not need help in buying, while 67,7% do. 86,4% of those that need help are aided by their sentimental partner, 10,4% are helped by their parents and the remaining 3,2% receive support by other friends and family. Do they have friends or family in the area? 67,4% of the purchasers have family or friends in the area where the property is located. This percentage decreases to 51,4% for those who are searching. Do they need financing? 23,8% do not need financing to buy, while, on the other hand, nearly half (47,7%) need a mortgage of at least 80% of the property´s value.

No need financing

REPONEDOR DE HOGAR




Home replacers Searchers Purchasers

64,6%

0,0% 1,0%

9,1% 8,1%15,2%

2,0%0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%


Financiación Inversor


Buyer profiles 3

Investors This group is composed of people in a good economical situation that decide to invest in housing with part of their savings. These are people who need Little or no financing. Approximately 1 out of every 10 purchases are made by people from this group. The average price of housing bought by them is around 70.000 €, nearly 20.000 € lower than the average Budget they have to purchase with. Where do they work? Buyers: 44,7% are autonomous, 31,9% are employed by others, 0,6% are retired, 6,4% are government officials and the remaining 6,4% have different occupations. Searchers: 45,6% of those searching are employed by others, 32,6% are autonomous, 11,2% retired, 7,5% are government officials and the remaining 3,1% have different professional situations. How do they purchase? Buyers: 75% buy alone, while only 25% need help purchasing. From those who are aided, 82,4% buy with their sentimental partner and 17,6% with help from their parents. Searchers: 45,9% of those searching do not need help in buying. Out of the 54,1% that do, 81,2% would buy with their sentimental partner, 10,7% are aided by their parents and the remaining 8,1% wit hhelp from other friends and family.

Graph 20. Funding for investors



Table 8. The investors

Do they have friends or families in the area? 51,6% of buyers have family or friends in the area where the property is located, a percentage that decreases to 27,3% for those searching. Do they need financing? 64,6% of the investors do not need funding. Only 17,2% need more than 80% of the value of the property purchased.

No need financing

INVERSOR Buscadores Compradores



Investors Searchers Purchasers

33,3%

0,0% 0,0%

16,7% 16,7%

33,3%

0,0%0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

35,0%


Financiación PRIME

PRIME Buscadores Compradores



Buyer profiles 3

Prime buyers This group represents a small percentage of housing buyers in Spain. Just like the first 2, this group is composed of families looking for habitual residence. Prime buyers are those with a high budget (above 250.000 €) and who do not need much funding. Where do they live? 72,7% own a property before buying a new one, 22,8% live as tenants and 4,5% lived with their parents.

Graph 21. Financiacing for prime buyers



Table 9. Prime buyers

What are they looking for? 59,1% buy to improve or enlarge their home, 18,2% switch from renting as tenants to buying, 9,1% purchase due to marriage or emancipation, another 9,1% are investors and a 4,5% buy as second residence. Where do they work? Buyers: 71,4% are employed by others, 14,3% are government officials, 9,5% are retired and 4,8% are autonomous. Searchers: 74,9% are employed by others, 12,8% are autonomous, 4,8% are government officials, el 4,7% are retired and 2,8% have a different occupation. How do they buy? Buyers: 37,5% buy alone, while 62,5% receive help from third parties. Of those, 60% do so with help from their sentimental partner, 20% with help from their parents and the remaining 20% are aided by other friends and family. Searchers: 40,6% would do so alone, while 59,4% would not: 77,1% of those would buy with help from their sentimental partner, 20,1% with their parents and the remaining 2,8% with other family and friends. Do they have friends or family in the area? 61,1% of buyers do, a percentage that decreases to 45,1% amongst those who are searching. Do they need financing? A third of prime buyers do not need financing, another third need more than del 80% of the value and the remaining need between 40% and 80%.

No need financing


Prime buyers Searchers Purchasers


Methodology 4

The database used for the preparation of this study is constituted based on answers obtained from interviews to Básico Homes' clients. These interviews were carried out by Básico Homes sale agents, all of which received a specific training so that the data obtained meets the quality and consistency required. The purpose of this program is to train all field staff who will be involved in the study on the questionnaire and methods of administration. The questionnaire was validated in a pretest in which the difficulty in comprehension of the questionnaire´s content was evaluated. The proposals for modification were submitted.

To the study´s management team and were validated before its definitive implementation. Study´s population: Searcher-purchasers for housing in Spain in 2014. Size of the sample: clients between the 1/1/2014 and the 31/12/2014. In total, 14.322 interviews, of which 1.003 were buyers. Once the interviews were conducted, the data is computerized through the identification of inconsistencies, purification and standardization of information. This way, measures are taken relating to quality control and supervision of field work. A statistical analysis on the study’s variables is performed using the standardized, obtaining logical groupings based on the answers that customers have given to the various questions, such as the reasons for purchasing, the main use for the property, the price of the property or their purchasing budget. 6 main groups are made, including categories that may result interesting to the study but are minorities with regards to the other groups under “others”. Amongst these we can find cases like purchases for labour mobility and residential use, purchase of primary residence by parents of those who will inhabit the property, etc. As well as these groups there is another small percentage of NA/NK (no answer/does not know) corresponding to people who did not answer the used for classification.

¿Quién compró vivienda en España en 2014?. Marzo 2015. 21

Básico Homes was born in June 2009, created by professionals from the real estate world, with great experience in the management, development, construction and commercialization of assets (land, housing, shopping centers…), acquired during their previous phases in large Spanish developers: Metrovacesa, Ferrovial Inmobiliaria, Urbis, Riofisa... All this experience, applied in collaboration with Spanish financial entities, have allowed Básico Homes to become an independent company, leader in management, commercialization and realization of technical work for these institutions. Básico Homes also participates in the commercialization of real estate portfolios belonging to the main servicers, investment funds and other real estate investors.

About:

About:

With the knowledge acquired in these years of intense work, the commercial experience accumulated and an experimented and qualified team, B-Servicer started their activity in June 2012 with the objective of helping investors in the uptake of portfolios, its valuation, management, administration and subsequent sale, unit by unit. In this short space of time, B-Servicer has advised different investment funds in the study of portfolios of loans (PL, NPL), developments and REO, participating in the main acquisition projects of important assets around the country, such as Bull, Teide, Hércules, Valonia, Lake, Lion or Aneto.

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Buyer profiles for housing in Spain in 2014

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