29 July 2015 – Expansión
Bankinter expects average house prices to rise gradually in the short term, with increases of close to 2% this year and 4% in 2016, in select locations.
Price rises are a contributing factor to the recovery of the sector, which is also marked by an increase in the volume of house sales, according to the report.
The entity believes that the improvement in employment, lower financing costs and the increased attractiveness of housing as an investment compared with other types of property, will all act as catalysts for demand, which will grow at a moderate rate in the short term to exceed 400,000 homes in 2016.
Furthermore, although the current recovery cycle is not expected to generate a new “boom” in housing demand, it is creating the conditions for sales to increase during the course of this year to 380,000 homes and next year to 420,000 homes.
Bankinter considers that 50,000 new homes will be sold in 2015 and that this figure will increase to 70,000-80,000 new homes in 2016.
In this sense, the entity points out that the outlook for the sector is continuing to improve and that 2015 will be the second consecutive year to register an increase in house sales of almost 4%.
In this context, Bankinter considers that the era of price adjustments is now over and that 2015 will be the year of stabilisation, prior to future price increases. However, it does not expect that house construction will ever return to the peak levels seen in the years before the crisis.
The possible increase in demand in the residential real estate market next year will depend on the acceleration of economic growth, the conditions for accessing financing and high liquidity and the attractiveness of housing as a good investment.
On a positive note, the entity highlights the increasing volumes of investment in large asset portfolios for their subsequent rental and management, as well as the rise in average rental prices for offices and shopping centres – their future evolution depends not only on changes in town planning regulations, but also on political uncertainty, which is leading to the postponement of certain investment decisions.
In short, the real estate sector is offering attractive investment opportunities, says Bankinter, which considers that the best investment options involve the purchase of real estate assets in prime locations in large cities and tourist resorts, with a target net return of around 3% and a minimum investment period of 3 to 5 years.
Nevertheless, the behaviour of the sector will also depend on the decline in the population and the unemployment rate, which it forecasts will continue to exceed 19%.
Original story: Expansión
Translation: Carmel Drake