The €2.5 bn ‘Help to Buy’ measure approved last week by the Spanish government will help expand the much needed supply of new housing developments across the country, according to Borja García-Egotxeaga, CEO of Neinor Homes, Spain’s largest listed residential property developer.
The incentives, which are aimed at getting more young people onto the housing ladder, consist of a series of state guarantees for the purchase of new homes for people under the age of 35 and families with minors under their responsibility, targeted to help over 50,000 people.
Under this new measure, the state will guarantee up to 20% of the loan, but in those cases where the energy certification of the home is D or above, the guarantee could go up to 25%. The term of the guarantee will be for ten years from inception and independently of the loan repayment.
With the policy Spain is seeking to facilitate the acquisition of a house by younger generations given that the average age of a first-time buyer in Spain currently stands at 40 years old, which is one of the oldest among European peers.
‘We welcome this initiative ratified by the Spanish government last week as it should help more of the young to buy their first home by the State providing them with much needed access to attractive financing, through mortgages and guarantees, enabling them to take the important first step of the property-owning ladder,’ commented García-Egotxeaga, adding that delaying buying one’s first home negatively impacts demographic trends, such as delaying having children until later in life and reducing birth rates and the size of each household.
‘Demand-side solutions such as this are also expected to help expand the much needed supply of new housing developments through this increased demand,’ he added.
Spain built over 700,000 homes a year before the financial crisis struck in 2008, but today that figure is under 100,000, giving it one of the lowest supply per capita in the world; 66% less than France and 50% below Germany.
‘As the largest listed residential developer in Spain and with a land bank to develop close to 12,700 homes, Neinor looks forward to continuing to supply much needed new homes to meet this demand in Spain,’ García-Egotxeaga commented.
Within the coming weeks, the government and ICO (official credit institute) together with the Spanish banks will formalise the framework under which the state will provide these guarantees. The programme is expected to end by December 2025, with a two-year extension option.
Transformational year
Neinor Homes, which has a land bank to develop close to 12,700 homes, and a GAV of €1.45 bn, delivered 2,599 housing units last year, slightly above its target of 2,500 units.
The developer also recorded the highest margins in its history in 2023. The company achieved a gross margin of 29%, equivalent to €174 mln, and an EBIDTA margin of 23%, or €136 mln, despite a backdrop of high interest rates and elevated inflation.
Neinor Homes has recently raised its medium-term Net Income guidance to €80 mln, from €70 mln previously.
