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Great Return of Real Estate: Construction to Better 1% & Prices to Rise in 2015

22/08/2014 – El Economista

As per a report by credit and business risk rating agency Cesce, the construction sector will see a turn in downward tendency as soon as the next year. It is expected to rebounce by 1%, above all driven by building construction, while civil engineering will still need some time to hit the bottom. Once it is accomplished, this area will grow by 3% in 2016, the study says.

Residential building development´s future seems the brightest with a predicted growth of 6% in 2015 and 8% in 2016. Prior to that, this year, the subsector will have to bottom-out. Likewise, from 2015 onwards, demand for homes is believed to improve for the first time in seven years.

On the other hand, foreign markets will continue to be the trigger for the domestic market. At the end of 2013, internationalization already equalled to 82.8% of the totality of large builders´portfolios. Leaders in the sector like ACS, Acciona, FCC, Ferrovial, Sacyr and OHL focused their activity mostly on Southern and Central Americas.

The Recovery of Investment Will Arrive Later

On the contrary, return of once-battered trust will take some more time. Over the past four years, the investment in construction has been continuously falling (by 10% on average). For that reason, the forthcoming data will indicate an increase. Nothing could be farther from the truth as, according to the report, this specific expenditure will post -2% in 2015.

In spite of all, the construction sector is starting to show signs of close recovery. For instance, the rise in the number of new builder companies, registered at 105.734 in February this year, compared to the 104.127 business-startings in the same month in 2013. Another proof is that at the end of 2014 property development is expected to decline by 6.2 to 6.7 per cent. Although negative, the figures would be by 14% better than the 2013 score.

 

Original article: El Economista (after Europa Press)

Translation: AURA REE