25 April 2016 – El Economista
ST Socided de Tasación forecasts that 2016 will mark the year of house price “stabilisation” and the start of improvements in the sector, however the recovery in real estate activity, and therefore in prices, will not come until the middle of 2017.
Those were the predictions made by the CEO of ST Sociedad de Tasación, Juan Fernández-Aceytuno, in an interview with Europa Press, in which he explained that in order to talk about a recovery in the real estate sector, the number of mortgages (which are currently growing at a YoY rate of 35%) have to get closer to the number of house sales (which are increasing by 20%), and he estimates that there is still “between 12 and 18 months” to go in that regard.
Fernández-Aceytuno believes that there is still “potential” for the creation of households, mortgages and transactions, given that this year, it is estimated that 300,000 new mortgages will be granted, compared with 1.35 million in 2006, and around 450,000 transactions will be closed, a figure that peaked at 900,000 during the real estate boom. (…).
He considers that for a country like Spain, a “very reasonable balance” would be 650,000 transactions per year, which would represent a “fabulous” market.
For the time being, the surveyor says he is observing “stabilisation” and the “start of the recovery” in terms of prices, which is now extending to all provinces, and is being led by the autonomous regions of Madrid, Cataluña, the Balearic Islands and País Vasco.
Eight-year upwards cycle
The CEO of Sociedad de Tasación explained that real estate cycles in Spain seem to span periods of 16 years, eight years of decreases and eight years of increases, which means that, in theory at least, the country can now look forward to eight years of increases, although “ it would be better if the growth were not so marked, but more sustained”. (…).
According to Fernández-Aceytuno, the Socimis “will be a very significant investment engine in the rental market”; he also sees a “great opportunity” in urban renovation and regeneration. The “big question” in this recovery process is whether the generation of “millennials” will opt to buy homes or to rent, a market that has been booming in recent years.
“Over the medium and long term, I expect to see a reasonably good market. The growth rate will depend on many factors, but I am reasonably optimistic”, he added.
Uncertainty affects investments, but not purchases
In terms of the impact of the political uncertainty on the real estate market, the CEO of Sociedad de Tasación considers that for now, at the micro level, the repercussions are “limited” and are not delaying purchase decisions, but he warned about the effect on “major investments, shopping centres and funds” as a result of the regulatory risk surrounding urban planning. (…).
Original story: El Economista
Translation: Carmel Drake