8 September 2015 – El Economista
BBVA (BBVA.MC) Research, Studies Service of the bank, say that the rise in prices and in activity in the housing sector is not surprising at all because it is part of the typical rebound/recovery that occurs after an overreaction in/of the adjusting.
This was explained by the head of Developed Economies of Research Department, Rafael Domenech, on Tuesday, in the press conference presenting the Economic Watch report of BBVA Research.
Thus Domenech was referring to the latest data published by the National Statistics Institute, which indicate that housing prices rose by 4% in the second quarter and sales and purchases increased by 13.9% in July.
When talking about the recovery of housing, we must keep in mind that it grows on very low levels, said the chief economist for Developed Economies, recalling that in some variables the sector has fallen by 60% or 80%, so that the increases of 5% or 10% is a minor recovery.
The rise in activity and pricing is not surprising at all, he noted, adding that in the spring of last year it was already said that the sector had hit the bottom and there were signs of recovery, which is confirmed by this data.
For this year, BBVA expects that house construction will contribute to GDP growth of 2015 in an amount similar to the other economic variables of around 3%, and that it can improve over the next year to rates as high as 7%. It is a manageable and desirable process for the economy which is far from the real estate boom levels.
Original story: El Economista
Translation: Lee La