Developers and financial institutions will meet each other in less than a fortnight in largest real estate exhibition in Spain.
The SIMA (Salón Inmobiliario de Madrid) opens its doors on the 11th of March and offers gran variety of real estate, intending to dispose of the huge stock of housing that had accumulated in recent years from foreclosure or payment in kind.
In the previous edition of the exhibition it was clear that there has arisen a ¨war¨ between them due to the sale of property in concern. So the promoters described the home sales made by banks and savings banks as "unfair competition".
We should not forget that they have the key to funding, the only key available to those who is willing to buy one of their homes and not of a promoter, as recently stated in a report by property consultancy CB Richard Ellis.
However, many developers come to the salon under the protection of an entity that ensures the operation. Not surprisingly, the restriction of credit by banks and saving banks, with the price disagreements between buyers and sellers, has resulted in many sales transactions to be ruined.
Financial institutions will be present however not as such, but through their real estate divisions: Altamira (BancoSantander), CatalunyaCaixa Inmobiliaria, BNP Paribas Real Estate, Bancaja Habitat, Casaktua (Banesto) ... All of them will again fight with the promoters for the same objective: to sell as many apartments as possible.
And it will not be an easy task, since many factors play against it. Buyers are expecting sharp declines in the prices of the apartments while the end of the relief for acquisition of housing for those earning over 24,000 euros could delay some purchase decisions. Not to mention the VAT hike since last summer.
As in the last two editions, the exhibitors have opted for the jerk that usually is between discount potential buyers, some more aggressive than others. On the coastal area, for example, there are discount offers ranging from 5% to 50% on the selling price or something that is still fairly common: trip checks to see the promotions 'in situ'. Also, in addition to reductions in the prices there are exhibitors offering 100% financing and such discounts like on parking spaces and storage rooms.
Madrid and the coastal area account for most of the supply
The exhibition of this year will be a true reflection of reality and that Spanish property shows a wide range on the coast and Madrid, two areas that account for most of the 1.1 million housing stock is estimated to exist in the Spanish property park. In 2009, the Ministry of Housing estimated that among 700,000 apartments pending to be sold, 60% were concentrated in the coastal area, while Madrid and its surrounding provinces cornered 14%.
Most real estate offers this year are turnkey projects, i.e. houses completed and ready for occupancy, also there are project options.
Right in the real estate boom, many developers and real estate agencies used to sell properties before them being finished. With the outbreak of the crisis, however, many projects were stalled while others went forward in search of buyers. The exhibition will present some of these cases as different projects in Valdebebas to be handed in the next two to three years.
SIMA, true crisis reflection of the sector
SIMA Spring (March 11-13) will be the first major real estate event of the year. The exhibition, although has failed to regain the glory that was four years ago, still remains a benchmark among exhibitors and those looking for the apartment.
The crisis, however, also has taken its toll. In 2007, in the right boom period there were sold 50,000 square meters compared to 6,000 in the latest edition.
"The debacle that existed at the exhibition between 2008 and 2009 is a true reflection of the evolution of the real estate sector in Spain," says one regular at the salon. "Now it is being sold hardly 15% of the surface which was four years ago and although we will never see a very high trading volumes, it can be said that the station of the cross is over".
Spring SIMA will kick off for this type of trade fairs. After this first edition, of March, follows another in June (from 2 to 5) and next in October (from 14 to 16 October). And that won´t be the only ones, since following ones will be held in Valencia in the Commercial Real Estate Center (between 25 and 27 March) or in Low Cost Salon in Barcelona (from 29 April to 1 May).
