BBVA: Drivers of Demand are Strong but the Real Estate Market has not yet Recovered its Tone

29 January 2020 – Expansión

BBVA Research has warned that the Spanish real estate market has not yet recovered its tone following the most recent regulatory reforms, despite the fact that the drivers of demand are relatively positive.

Job creation and salaries are on the rise (+2% and 2.3%, respectively), interest rates are low and net migration is positive, which all help boost demand for housing. In fact, according to the Notaries’ Centre for Statistical Information (CIEN), almost 47,000 homes were sold in November, up by 5.6% YoY.

However, variables on the supply side, such as the job market and certain production costs, are showing signs of weakness, and so, according to BBVA, the monthly evolution of house sales is more representative (down by 1.1% MoM).

Moreover, the job market in the construction sector was weaker during H2 than H1 and lost traction towards the end of the year. Finally, in November, the market for land did not consolidate its positive performance in the previous month.

Original Story: Expansión

Translation/Summary: Carmel Drake