The housing market in Spain continues to progress slowly and smoothly. In June there were nearly 40,000 real estate transactions in Spain.
But the growth is largely limited to five major cities and their surrounding areas: Madrid, Barcelona, Alicante, Malaga and Valencia. The total number of sold properties for the first six months amounted to 207,593.
“Private equity funds” are the new builders. Their object is to provide a profit on building homes. Residential construction is partially funded by foreign investments mainly flowing into Madrid and Barcelona. The housing market accounted for nearly a third of the nearly 22 billion euros of foreign investments in Spain in 2015.
Figures from the official statistics agency “INE” shows a demand for everything from homes for the great middle class to luxury apartments in major cities and in industrially strong regions such as in the Basque Country. This shows that Spain’s recovery is going in the right track despite the political deadlock after the two elections that have not led to any solution.
The analysis shows that we in the course of this year will see an overall increase in the residential sector, mainly within existing homes. Bankinter recently published a forecast pointing to a need for 400,000 homes this year. This would involve a ten percent increase from last year. Prices are expected to increase by between 3% and 5%, according to the bank. Bankinter expects a turnover increase of around 6% this year.
Low interest rates
The interest rates will continue to be low, according to Bankinter, which means that there is little to be gained from having money in the bank. This makes bricks and mortar a better investment option to get value for your money, especially since banks are now keen to lend money to homebuyers.
After seven months and two elections, Spain still has no government, but it does not seem to scare away the investors. Madrid ranks fourth in Europe in 2016 in a comparison of European cities that the consultancy company PWC has developed. The rating is based on a survey of investors and builders views on the housing markets that have the best conditions.
Spain is now in its fourth year of recovery and all signs point to continued stable growth. Source: El Pais.