Servihabitat: House Prices Will Rise By 6% In 2016

18 November 2015 – Expansión

According to Julián Cabanillas, the CEO of Servihabitat, the volume of house sales could reach half a million units in 2016.

This data indicates that we can expect an acceleration in the level of activity in the sector with respect to this year. The company expects 2015 to close with an increase in house prices of between 2.3% and 2.6% and the sale of around 400,000 homes.

During an informative event organised by Europa Press, Cabanillas echoed the messages of the President of Merlin Properties, Ismael Clemente, and the CEO of Neinor Homes, Juan Velayos, in highlighting the trend towards recovery in the real estate sector. (…).

“In the absence of externalities, we are facing a positive cycle, at least in the real estate sector, where we should have a strong tail wind for an extended period”, said the President of the Socimi, who said that the current expansion of the sector could last for up to seven years, “if it is properly managed”.

In terms of the segment for the development and sale of homes, “it has taken a bit longer to get going, but their ducks are now all in a row”, said the CEO of Neinor Homes. “We expect to see a flurry of activity over the next few years”, he said.

Nevertheless, Velayos considers that one of the challenges facing the sector, which could strenghthen this recovery, is for developers to stop being so “self-centred” and to think less about supply and more about demand, in terms of the types of homes that citizens actually want. According to his predictions, the sector is facing some “important challenges”.

In this sense, the CEO of Servihabitat said that the stock of unsold homes accumulated during the crisis is reducing at annual rates of 30% and that now certain areas are experiencing significant demand, including parts of Madrid and Barcelona, “where clients are no longer able to find the real estate products they are looking for”.

Moreover, he said that the “rental market is here to stay”, highlighting that the percentage of households that live in homes under lease arrangements has risen to represent 21% of the total, from 15% before the crisis. And he predicts that this figure will continue to rise.

Cabanillas attributed this increase in demand for rental housing to changes in social and family structures, as well as to the need for labour mobility and the fact that, after what happened with the crisis, citizens are more reluctant to get themselves into debt.

“These changes are going to force the sector to change and adapt”, said the CEO of Servihabitat. “Increasingly, more Spaniards can afford to take out a mortgage, but they are not doing so because owning a house is not something that they are even considering. In the same way, they are increasingly less likely to want to own a car, they would rather just rent one”.

Original story: Expansión

Translation: Carmel Drake

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