12 July 2017 – Expansión
According to the “Residential Market in Spain” report compiled by Servihabitat Trends, the analysis platform backed by Servihabitat, house prices are forecast to rise by 4.1% on average this year and the number of sales operations is set to increase by 15.2%, to exceed 465,000.
In addition, the number of new house starts is expected to grow by 15.3% and the number of finished properties will increase by 20.2%, whilst the stock of new homes looks set to decrease by 17.8%.
According to the report, the residential market is showing clear signs of recovery this year.
The CEO at Servihabitat, Julián Cabanillas, has said that “all indicators show that the sector is enjoying sustained and established growth, albeit at different rates. The process of normalisation in the market, with an increase in pressure from demand and the consequent increase in prices, is not happening in a homogeneous way across the country”, he explained.
According to Servihabitat, demand is continuing to rise due to job stability, an increase in household incomes and an increase in the volume of loans granted.
Moreover, demand for investment is growing – it already accounts for between 20% (primary residences) and 22% (holiday homes) of all operations.
The volume of supply of new homes is also continuing its rising trend.
The number of new homes started will increase by 15.3% this year, to 75,500 and the number of finished homes will rise by 20.2% to 48,500.
In terms of construction permits, the figure is expected to amount to almost 116,000 this year, which will represent a rise of 25.9%.
The stock of new homes is set to decrease by 17.8% to amount to 324,000.
According to Cabanillas, the technical stock will amount to between 160,000 and 170,000 homes.
The pressure exerted on demand will drive up prices but in a moderate and non-homogenous way.
This year, the average value of a home is expected to rise by 4.1%.
Cabanillas rules out the possibility of a real estate bubble building in the short and medium term because “the fundamentals are nothing like those that existed before the crisis”.
In terms of the rental market, the report reveals that rental prices rose by between 4% and 5% during the first half of 2017.
Increases of between 2.5% and 5% are expected during the second half of the year, depending on the location of each property.
Servihabitat renders services for the integral management of financial and real estate assets.
Original story: Expansión
Translation: Carmel Drake