10 February 2016 – El Mundo
Housing demand will continue to grow in Spain to reach 420,000 properties sold in 2016 and 450,000 in 2017, according to a report of Bankinter, which indicates that nonetheless the price increase will not exceed 3% in average or 5% in the case of the best locations.
These transaction figures mean an increase by around 20% with respect to the 354.100 homes sold along 2015, according to National Statistics Institute (INE) data In addition, the report points out that second-hand homes will continue to be the dominant alternative in a scenario of economic recovery, with over 85% of all transactions in the coming quarters.
As properties which have started to be built from the second half of 2015 are put for sale, says Bankinter, new home sales should increase, reaching rates above 15%,so that these transactions could reach 60,000 or 70,000 units per year.
The financial institution says that this increase in demand is explained by the predictable improvement in employment, low interest rates and higher attractiveness of housing as investment.
On the price side, the report notes that the residential market is heterogeneous, but it will increase in average, driven by the lack of supply in places like Madrid or Barcelona. In this regard, it also notes that the first increases in land value could begin to affect the final price of housing.
However, Bankinter states that price increases will not be “substantial”, partly because the purchases will come in part from the process of marketing of homes awarded to banks, which have heavily discounted prices.
On the other hand, as a result of these market developments, the ‘stock’ of unsold homes could be reach levels below 500,000 homes in 2016
New housing will advance if there is political stability
At the same time, Bankinter points out that the improved outlook of the sector will extend to the promotion of new housing, which “will experience a new awakening in 2016 under the increase of work certifications in 2015, provided the political context does not result in a loss of confidence.”
“Promoter activity is currently going through a turning point and it will emerge over the next two years “, the financial institution ends with.
Recovery is already being talked of
For all those reasons, Bankinter says that “the consolidation of the recovery cycle in the residential property sector it is a reality “. It also notes that the commercial sector is already in a “clear upturn”.
Thus, the report indicates that the commercial sector will strengthen in 2016 and 2017 the positive trend of income, occupancy rates and revaluation improvement of the assets.
Again, Bankinter warns that the investment boom experienced in 2015 “will be slowed down by the lower number of large transactions and a situation of uncertainty that can postpone or cancel the launch of new projects.
Original story: El Mundo
Translation: Aura Ree