Goodbye to 100,000-euro apartments: Sareb withdraws 40,000 cheap homes from the sales market, which will be transferred to Sepes for rental.

The transfer of Sareb’s housing and land assets to Sepes to create the new state-owned housing company will remove the largest stock of affordable homes from the free market, significantly impacting Sareb’s revenues—estimated at a loss of at least €5.9 billion.

According to Isabel Rodríguez, Spain’s Minister of Housing and Urban Agenda, this operation will involve the handover of around 40,000 homes and nearly 2,400 land plots, on which up to 55,000 new homes could be built. The transfer process will be carried out gradually.

Most of these revenues, roughly €4 billion, come from the sale of homes that will now form part of the public housing stock and be made available as affordable rentals.

However, this measure implies the immediate withdrawal of 40,000 affordable homes from the open sales market. Sareb’s properties had an average price of about €100,000, making them particularly attractive for buyers seeking low-cost housing in Barcelona and other parts of Spain.

In the first half of 2024, Sareb sold 4,353 homes, generating around €443 million, at an average price of €102,000 per unit. Additionally, 877 more homes were sold through foreclosure processes, with an average value of €71,500.

These operations were concentrated in areas with strong real estate activity and rising prices, such as the Valencian Community (28.1% of transactions), Catalonia (18.9%), Castilla y León (9%), and Andalusia (8%).

The removal of these assets from Sareb’s portfolio and their transfer to Sepes will substantially reduce the entity’s future revenues, since residential sales accounted for 58% of Sareb’s total income in the first half of the year, according to official data.

This change means Sareb will have less capacity to repay the debt guaranteed by the Treasury, which will be transferred to the State when the company enters liquidation, scheduled to begin in 2027.

Sareb was created in 2012 with €50.781 billion of debt and, by June 2024, had managed to reduce that figure by 42.1%, bringing it down to €29.411 billion. Its main function has always been to generate income through the sale and management of real estate assets in order to cancel as much of the State-backed debt as possible.

In 2023, then-CEO and now president Leopoldo Puig admitted that the company closed the year with negative equity of €14.6 billion. This already indicated that a significant portion of the debt would be impossible to repay, and the loss of these expected revenues pushes that possibility even further out of reach.

Of the €5.9 billion in revenues Sareb will forgo, €800 million stand out as the amount it expected from the sale of its developer Árqura. That deal, which had attracted interest from major Spanish real estate players (including Aedas, Neinor, and Aelca), involved the transfer of land to build up to 16,000 homes. However, the transaction—managed by Deloitte—was halted in December of last year.

Since its launch in 2019, Árqura has marketed 9,550 homes, of which 3,912 have already been delivered, according to data as of the end of the first half of 2024.