11/12/2014 – Expansion
Recognized property market specialist Julio Gil, director at advisory firm Horizone and the new chairman of the Foundation for Real Estate Research (Fundación de Estudios Inmobiliarios), said in an interview with Expansion that after seven years of collapse, the worst is over and ‘adjustment in housing is practically a fact’. According to him, next year will be better than 2014.
‘A year and a half ago, signs of life in the property industry disappeared. Now we are at a turning point, marking the first phase of recovery. Prices in Madrid and Barcelona went stable and undoubtedly the prime markets of the main cities of Spain is emerging from the recession’, Mr Gil explained.
Moreover, the expert admitted that the year 2014 was the stabilization time after hitting the bottom. Prices still need some adjustments as by now they have achieved it in different ways. Thus, in Madrid the values dropped by 42 per cent and in other regions the correction has not crossed 25 per cent.
Asked about his opinion for the upcoming year, Mr Gil said ‘the real estate activity will rebound in 2015. If if comes to prices, there will be a moderate decline. Demand will be conditioned by demographics and employment‘.
Moreover, the economist reckons the moment to buy-to-lease is favorable as risk posts low and returns project well. ‘Demographic change will be the key to preventing subsequent property depreciation in the long run’, he assured.
The specialist also pointed out that still there are multiple opportunities of buying an interesting units at good prices.
In reference to banking sales, Julio Gil gives the following piece of advice: ‘this is the moment to implement a scheme of real estate sales to foreigners. This is one of the greatest potentials of the sector. Spanish residential tourism market is tremendously competitive all in terms of prices, infrastructures and services. What is more, holiday housing has cheapened by 50 percent. For these reasons, the time is perfect to export this type of product’.
Asked to specify the measures, the expert said the power lies in taxation and applying incentives to purchases by foreign investors. The plan would show a way out for the REO volume in banks and assets of real estate managers.
Morever, he is convinced that the industry needs better lending and a decrease of the tax on property rehabilitation.
Original story: Expansión (by Juanma Lamet)
Translation: AURA REE