The activity of the 21 large appraisal companies fell by more than 11% during the 2020 financial year, from 1.1 million appraisals in 2019 to 990,000 in the year of the Covid. Consequently, according to the data published this Tuesday by the Spanish Association for Value Analysis (AEV), the turnover of the twenty entities was reduced by 9%, to 249.7 million euros. The association, which brings together firms such as Tinsa, Sociedad de Tasación, Gloval, Gesvalt, Euroval or CBRE, recalls that during the months of confinement the difficulties in closing operations caused a significant temporary reduction in activity, especially in the mortgage segment.
These six appraisers, which represent more than 60% of the sector’s business volume, have substantially reduced their billing levels. As explained by Paloma Arnaiz, general secretary of the AEV, “it was to be expected that the significant slowdown in activity experienced between the months of March and June would result in a global drop in annual turnover, despite which the impact has been reasonably moderate, since we are at figures similar to those of 2016 for the sector as a whole ”.
Within all the activity of the appraisers, that of the mortgage segment has been one of the hardest hit, falling by 17% compared to 2019, to 500,000 operations, and 23.5% in the appraised amount. Over the year as a whole, the proportion of appraisals dedicated to the mortgage market has decreased slightly, from 54% to 50%, as well as that of activity dedicated to other varied purposes such as advice or expert appraisals.
On the other hand, the proportion of activity dedicated to appraisals for accounting purposes of financial entities has grown, whose representation goes from 33% to 40% of the total. This process, by which they are analyzed Assets on the balance sheet of a company is a key procedure for the financial and fiscal situation of the business, a key point in a year marked by the economic crisis.
For its part, mortgage appraisal activity in the specific segment of housing has experienced a somewhat more moderate decline than that of mortgage appraisals as a whole: a drop of 14% in volume (around 350,000 operations carried out) and 12, 5% in assessed amount. On the other hand, the average amount of the valued has increased by 1.8%, placing the average value of the appraised homes at 202,600 euros.
In other words, although fewer homes have been appraised for mortgage purposes, those that have been appraised were of higher average value than those of previous years. “This can happen either because they are, in general, larger, because they are located in regions or areas of higher value or because of other factors related to preferences and purchasing power of the demand,” they explain from the AEV.
Mortgage appraisals for project properties, meanwhile, continue to experience declines. Thus, although its volume has increased (23.2% more projects have been appraised), the assessed amount of new construction has decreased practically 50% compared to 2019, which reflects that, in general, projects valued are substantially smaller in size. On the contrary, both the volume (49%) and the amount (50%) of the rehabilitation projects remain on the rise.
Despite the fact that “2020 has been a year of great complexity for the economy as a whole and also for the real estate valuation sector”, Gloval sources explain, from the entity they make a positive balance. “We have been able to increase our share by more than 1.5 points in appraisals for mortgage purposes. This good evolution has compensated for that of our business of valuation of doubtful assets for banks, cyclical and in which last year we corresponded to a lower volume “. Likewise, both the proliferation of new business models in the mortgage sector and the fact that the pandemic has consolidated the internet as a channel, “have driven the direct hiring of appraisal by those who need a mortgage, a segment with enormous potential that already in 2020 we began to exploit clearly “.
By regions in which the appraised properties are located, the situation in 2020 is very similar to that of previous periods: Madrid, Catalonia, the Valencian Community and Andalusia continue to consistently group around 63% of the appraised assets. For their part, the cities of Madrid and Barcelona account for 8% of this total. Approximately 28% of all appraisal activity takes place in municipalities with more than 100,000 inhabitants.