20 December 2016 – El País
House prices will grow by around 2.3% in 2016 and will gradually increase to reach a growth rate of 5% in 2018. That figure will then remain stable until the end of the decade, according to forecasts presented in the twentieth edition of the Spanish Real Estate Market Statistical Yearbook for 2016, published by R.R. Acuña & Asociados. According to the report, the evolution of prices in each local market may “be very different from the rates expected for Spain as a whole”.
In 2015, price rises were recorded in just 46.8% of Spain’s municipalities, and price decreases are still expected to be seen in a decent number of them over the next few years. The consecutive decreases in prices over the last eight years arose due to the significant mismatch between supply and demand, which has characterised the performance of the Spanish real estate market, still weighed down by the high volume of stock.
Demand has strengthened in the main metropolitan areas and along the tourist coasts over the last two years, thanks to the expectations of economic growth and the significant improvement in employment. Similarly, growth has been observed in terms of demand and sales, and that trend is expected to last for the short term, at least, given the current economic forecasts.
The conclusions of the yearbook point to a return to equilibrium, thanks to an increase in sales and the recovery in prices in some areas of the market. In this way, the study predicts that the supply of new homes will reach a minimum of 40,000 finished homes in 2016, and that over the next two years, there will be sustained growth in specific areas of expansion across the country, where the stock of new housing is practically non-existent.
Demand for new homes
Meanwhile, demand for new homes will reach a minimum this year, with almost 82,000 homes. R.R. de Acuña forecasts that a quasi equilibrium between supply and demand will be reached in 2018, with a stock of 341,000 homes.
This would mean that the dissolution of most of the new home stock would be practically unfeasible over the long term and that the adjustment of the new home stock in areas of expansion will have been completed. Estimates indicate that a stock of 1.468 million empty homes was put up for sale in Spain in 2015. 218,000 homes have been dissolved since 2010.
In terms of second-hand homes, bequests of the net second-hand supply will continue to grow and will represent between 40% and 50% of demand for second-hand homes. The demand forecasts for second-hand homes indicate a dissolution of almost 330,000 homes each year until 2018, which will become increasingly moderate.
In 2015, the total housing stock amounted to 25.5 million, of which 18.6 million were primary homes, 4.4 million were secondary homes and 2.5 million were empty homes, resulting in a ratio of 1.4 homes per household, compared with the EU average of 1.12.
Original story: El País
Translation: Carmel Drake