30 April 2017 – Expansión
Outlook / The experts believe that house prices will rise by around 5% and sales by more than 10% this year.
The recovery in the housing market is unequivocal and so the question that the real estate consultants are now asking is: “Will 2017 be the year of consolidation?”. In other words, “Will the recovery extend across the whole country and will the sector reach cruising speed?”. That is the million-dollar question.
The consensus of the real estate experts consulted by Expansión reveals that house prices are expected to grow by between 4% and 6% in 2017. Similarly, the overall forecast is that the number of residential property sales could reach 500,000 this year, which is regarded as the “healthy” or “normal” level for a market such as Spain.
There is also consensus that the number of operations involving new and second-hand homes will rise by around 10%, at least. Spain’s National Institute of Statistics (INE) certified that 403,866 homes were sold last year, up by 13.6% compared to 2015. It was the first time since 2010 that the figure had exceeded the 400,000 threshold, and this year will be even better, in the opinion of the analysts. House sales will grow in every single autonomous region in 2017, above all in Cataluña, the Balearic Islands, the Canary Islands and Madrid, which are the four regions that are setting the trend for the sector as a whole.
Something similar is happening with average house prices. The boost from the large cities is now having an effect on medium-sized (provincial) capitals, the majority of which are clearly recovering in 2017. Not in vain, Tinsa reported a few weeks ago that the appraisal value of residential properties experienced a YoY increase of 2.7% in March, but rose more than twice as much, by 5.5%, in the provincial capitals and major cities.
Almost all of the forecasts from the major real estate analysts place the rise in prices at around 5%, and underline the disparity in the various real estate markets in the country. Servihabitat thinks that residential property prices will rise by 4.3%. The consultancy firm Aguirre Newman estimates “growth of around 6%”. JLL predicts that prices in city centres and in exclusive locations along the coast will see “increases of more than 6%”. CBRE forecasts that house prices will rise by between 4% and 5% in 2017 and by more than 6% in Madrid and Barcelona”.
The creation of new households and, above all, the significant increase in purchases by investors is spurring on demand. These two variables, combined with the significant rise in the rental market, mean that Madrid and Barcelona are still the major drivers of the market. During the first quarter of 2017, prices rose by 12.1% in the Catalan capital and by 7.7% in the Spanish capital.
The data from the other three large cities is much less extreme. The price of homes rose by just 1.1% in Valencia, fell by 1.1% in Sevilla and increased by 2.5% in Zaragoza. Other capitals saw higher increases in house prices, including Alicante (+11.7%), Vitoria (+9.3%) and Las Palmas de Gran Canaria (+7.8%). (…).
Original story: Expansión (by J. M. Lamet)
Translation: Carmel Drake