20 October 2015 – Expansión
One of the main signs of stabilisation in the real estate market is the fact that the recovery of the housing market is progressing in line with expectations. (…). Furthermore, all of the forecasts for the end of 2015 indicate that the residential sector has now emerged from the recession and put the days of negative numbers behind it. But, what about next year? What does 2016 hold?
The latest report from Servihabitat provides an answer to that most basic of questions: In 2016, “the upwards trend is expected to continue”, with an increase in sales (up by 14.5% compared with 2015), a reduction in stock (down by -24.5%), and above all, more expensive homes. Prices will increase by 6.3%, on average.
In fact, prices are expected to rise across the whole of Spain, but will increase by more than 6% in 12 autonomous regions: Galicia (8.6%), Madrid (7.2%), Murcia (7.2%), Extremadura (7%), Aragón (7%), Valencia (6.9%), País Vasco (6.8%), Asturias (6.7%), Islas Canarias (6.6%), Andalucía (6.4%), Cataluña (6.4%) and Navarra (6.4%).
Before that, house prices will close 2015 with an increase of 2.6%, driven above all by increases in Castilla y León (4.1%), Cantabria (4%) and Castilla-La Mancha (3.9%), according to the study, the first one to be conducted by the think-tank Servihabitat Trends, which forms part of La Caixa and which was “created with the aim of analysing the evolution and forecasts of the country’s financial and real estate sectors”.
Most of the estate agents surveyed for the report say that “the stabilisation of house prices during the first half of the year” will serve as a prelude to a notable increase next year. “The forecast upturn in house prices is a clear indicator of the signs of recovery in the sector”, says the report.
Most of the operations involving the purchase of primary residence homes “will range between €79,000 and €167,000, depending on the geographic location of the product”.
Be it due to the cautious opening of the mortgage tap or because the days of price decreases are now behind us – in aggregate terms – the fact is that house purchases will grow strongly in both 2015 and 2016. Specifically, by 26.6% this year, to reach 403,000 transactions and by 14.5% in 2016, to reach 461,000 sales. These forecasts sit at the top end of the range predicted by other experts. For example, the President of the Foundation for Real Estate Studies (‘la Fundación de Estudios Inmobiliarios’), Julio Gil, thinks that “last year, there were 365,594 transactions and this year we expect to see between 350,000 and 400,000”. But he adds, “We do not expect sales to increase significantly YoY during the second half of this year. That would leave the final figure in a range between 370,000 and 380,000 house sales”. It is worth remembering that 190,135 homes were sold during the first half of the year, according to the Ministry of Development.
Servihabitat also predicts a sharp decline in the number of homes for sale without a buyer. The stock, which amounted to more than 675,000 units at the end of 2014, will decrease by 31.5% in 2015 to 462,000 homes. In 2016, a further 24.5% will be absorbed, taking the total to 349,000.
The study concludes that “a process of gradual normalisation is taking place in the residential market in Spain with an increase in house sales and a gradual appreciation in house prices”. And that normality is certainly welcome news.
Original story: Expansión (by Juanma Lamet)
Translation: Carmel Drake