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BBVA: The RE Recovery Depends On 3 Cornerstones

5 June 2015 – Idealista

According to BBVA Research, the real estate sector showed clear signs of stabilisation during the first quarter of 2015. The entity has based its findings on: the opening of mortgage credit; the slight variation in house prices; and the recovery in construction activity.

The data supports this recovery. The volume of house sales increased by 2.3% YoY in Q1 2015, maintaining the trend seen in recent months. The General Council of Notaries confirmed the trend with the sale of 34,756 homes in March alone.

This growth in demand, coupled with interest rates at historic lows, has allowed more growth in the mortgage market, with a YoY increase of 22% in mortgage lending during the first quarter of the year and an increase of 20.4% in the volume of loans granted for new house purchases during the first three months of the year.

Meanwhile, house prices dropped slightly (by 0.1%) during Q1 2015 to reach €1,459/m2 on average, according to data from the Ministry of Development; they continue evolve heterogeneously by region. Whilst the Canary Islands and Aragon experienced the highest increases during the quarter (higher than 1%), Cantabria, Murcia and Asturias suffered the most significant decreases.

The third element of this improving environment is: construction activity. Despite the decline in the granting of permits for new constructions during the first quarter of the year with respect to the previous two quarters, YoY growth amounted to 23%. Moreover, the number of individuals registered for social security in the sector increased slightly, by 0.4%, in April compared with March, whilst unemployment continued to decrease in the sector.

Original story: Idealista (by David Marrero)

Translation: Carmel Drake