The Spanish Association for Value Analysis (AEV), that groups the main appraisers with a market share higher than 90%, finalizes the details of the new information that will include the appraisals from the last quarter of this year.
It is a rating that, following the outline of the notes issued by agencies such as Moody’s, Fitch The Standard & Poor’s, will measure the risk they have the homes of suffer a significant loss of value in the six years after the loan is granted. The initiative takes into account that, statistically, most of the credits that are unsuccessful are among the third and sixth year from the concession, therefore, this is the period during which it is most important for a financial institution to be sure that the value of its mortgage guarantee has not suffered a depreciation with respect to the moment in which the credit was granted..
As explained by general secretary of the AEV, Dove Arnaiz, “We conceive the mortgage qualification of the properties as the previous step to the development and implantation, by appraisal companies, of a homogeneous mortgage adjustment system ”. Thus, under the same criteria as those established by the ECO order 805/2003, it would be about establishing the mortgage value of the properties, understanding this as "a prudent value whose calculation mitigates the effect that the birth of some kind of bubble may have on prices", adds Arnaiz.
How will this note be associated with each home? As they explain from the AEV, the grade will consist of a set of three notes (type AAA, ABD, for example). The first will refer to the situation national macroeconomic and of the autonomous community The province where the property is located. Secondly, the most important aspects of the local property market and thirdly, the house will be analyzed according to its physical characteristics and functional, such as if it is located in flood zones o de high seismic risk, if it is a semi-basement or is located on a ground floor in an interior patio.
Also, It will be taken into account if the house is part of a building where there are other floors with problems of squats, or if he suffers serious constructive pathologies.
Offices and shops
The AEV ensures that so far they have advanced in the model to be applied to residential buildings, although it is foreseen that it will gradually reach the rest of the uses that are going to be valued by the comparison method, how Offices The malls. Also, explains that this rating will be granted for each home individually when its valuation is requested as Mortgage, reason why its cost will be included in the cost of each appraisal. As work is progressing to have this initiative fully implemented, The same sources indicate that the first appraisals that will include this innovative rating will be ready for owners and banks from the last quarter of this year..
What parameters will the appraiser take into account when evaluating the market situation and the economic situation? There will be key indicators that cannot be ignored, such as the evolution of the gross domestic product (START), or the busy rate, both considered good thermometers of the state of health of the economy, whose cycles are closely linked to the progress of the real estate sector.
The appraisers assure that the demography and factors as determining as the aging of the population will also be closely watched., associated with lower future demand for housing.
AND, like is logic, you will not lose sight of the evolution of the effort rate that is required at all times to buy a home. For all this, The differential between GDP growth and the evolution of real estate prices and mortgage payments will be analyzed., two indicators that usually offer clues about the appearance of bubbles.
For the first time, key indicators will be taken into account to identify paralyzed markets, such as the total supply volume on the housing census or the ratio of the number of quarterly transactions on the offered stock. All to offer as much information as possible to help gauge the chances of losing value in the medium term..
OTHER MARKET KEYS
The weight in the foreign market. He 6,9% of the mortgages about housing in 2017 were formalized by foreign, beating the 21.000 loans, as it appears from the Yearbook 2017 of Real Estate Registry Statistics elaborated by the College of Registrars. By autonomous communities, Catalonia (20,2%), Valencian Community (19,2%), Andalusia (17,4%) and Madrid (14%) were the regions where the foreigners weight on total mortgages Was greater.
The improvement of the activity is consolidated. In the last year, They registered 310.640 mortgages about housing in all Spain, what represents a increase in 10,90% with respect to the previous exercise, according to the cited Yearbook.
Increase in appraisals. The valuations whose purpose is to serve as a mortgage guarantee amounted to 650.000 operations in 2017, what represents a 24% plus that a year before.
Turnover. In global terms, the 23 major appraisers obtained an income of 283,8 millions of euros, figure that supposes a 17,1% more than the previous year, a rate of advance that almost doubles the of 2016.