4 December 2015 – El Economista
BBVA Research, the financial institution’s research service, says that house sales will grow by 10% in 2015 and that in 2016, the real estate sector will finally leave behind the recession and will consolidate its growth.
Those were the main conclusions drawn by the latest Real Estate Watch Spain report published by BBVA on Thursday, which says that the sector is showing positive signs and that the available data indicates a significant improvement in demand, in an environment characterised by an increase in credit and the stabilisation of prices.
Moreover, the report explains that the scarce supply of new homes coming onto the market is enabling a significant reduction in the existing stock, to the extent that the supply is even running out in the most active markets.
This year is also seeing a significant improvement in the amount of activity undertaken by property developers, says BBVA, which means that in 2015 the residential construction segment is going to positively contribute to GDP for the first time since the start of the crisis.
The report notes that the recovery in demand, initiated in 2014, has strengthened during the course of 2015. In fact, it forecasts that the current year will end with around 400,000 house sales, i.e. an increase of around 10% compared with 2014.
This rate of sales will accelerate during the fourth quarter and the trend will continue into 2016, say the experts at the bank, who highlight that improvements in the fundamentals of demand are driving this trend.
Specifically, it mentions the recovery of the labour market and the increase in household disposable income, the positive developments in the financial markets and the stabilisation of residential prices, the strong performance of house purchases by overseas citizens, and an environment characterised by financial stability with interest rates on mortgages at historical lows.
Meanwhile, the report sets out that the growth in demand, in the context of a reduction in supply, lends itself to the stabilisation of house prices.
According to BBVA, prices have begun their journey through the recovery phase of a new cycle, a recovery that is currently undergoing a period of stabilisation and one that is happening more slowly than in previous cycles.
By type of asset, the bank observes a similar evolution in terms of both new housing and second-hand housing. Nevertheless, it clarifies that, whilst price decreases have been more intense in the second-hand segment, the recovery has begun more quickly in the new build segment.
Original story: El Economista
Translation: Carmel Drake