Political Paralysis Affects The RE Sector

6 February 2016 – Expansion

The political paralysis is also affecting one of the sectors which is more vigorously climbing out from the deep hole in which the crisis left it. BBVA determines that the uncertainty generated by the parliamentary negotiations is undermining  recovery in housing activity since, although residential demand evolves positively, a lower growth in sales and mortgage granting has been observed.
 However, the research department of the financial entity stated that in the absence of data from December, 2015 will be closed with around 400,000 homes sold, 8% more than in 2014, as recorded by Efe. In the first eleven months of the year, the accumulated housing sales growth was of a 10.6% Y-O-Y and already in November the number of transactions lost vigor since, according to data from the General Council of Notaries, about 35,000 properties were sold, 2.5% less than a month earlier. Thus, BBVA holds that in recent months the sales appear to have stuck around 35,000, breaking the monthly growth they had shown in previous months.

Possible acceleration. However, given the good performance observed in the fundamentals of demand for housing, this impasse could be transient. Thus, the progressive reduction of uncertainty in the coming months could bring a further acceleration in housing sales, says the entity. Therefore, according to the Labour Force Survey in the fourth quarter of 2015, employment grew 0.8% per quarter, so that the year ended with 525,100 more employments than in 2014. Membership data also revealed an increase in employment in December and a reduction in the unemployment rate up to 20.9%, three points under the previous year.  The atmosphere of political uncertainty, added to the volatility of financial markets have also been reflected in a reduction in the consumer confidence in January, but yet it is at all-time highs. 
As well as in sales, in November, mortgage granting decreased in comparison with the month of October. According to the Notaries, signed loans decreased by 5.6% compared with October. After that reduction observed in October, visas rose sharply in November with a 29.9% increase. There has also been noticed an increase in cement consumption, in the data of the construction labor market or in the confidence of entrepreneurs.

Original story: Expansion

Translation: Aura Ree