9 January 2018 – El Periódico
BBVA Research predicts that house prices will rise by 5% during 2018.
The real estate sector was responsible for more than 11.2% of the growth of the Spanish economy during the first three quarters of 2017. And the strong end to 2017, despite rising uncertainty in the final part of the year, will make way for a 2018 in which the economy will grow once again, supported by both domestic and overseas demand, according to the findings of the report “Real Estate Situation in Spain”, published by BBVA Research.
Although the rate of growth will be more moderate in 2018, forecasts indicate that around 550,000 house sale operations will be closed, which will drive the growth in house prices to around 5% and will increase the granting of building permits to around 92,000. Moreover, increasingly more autonomous regions will show a normalised real estate market, having overcome the crisis.
The scarce data (to be released so far) relating to the final quarter of 2017 indicates a moderation in the growth rate. During the middle two quarters of 2017, house sales maintained their growth rates, which favoured the increase in prices and the launch of new projects. With the official data for the final quarter yet to be published, this report indicates that the balance for the sector during 2017 as a whole was positive, thanks to the strong foundations, which are still having an effect.
Between January and October 2017, 432,500 homes were sold, up by 16.4% compared to the same period in 2016. That figure was made possible by the strong performance of the mortgage market: the volume of new loans to buy homes grew by 16.4% YoY during the first 11 months of the year, and the granting of mortgages increased by 14.7% between the months of January and October. All of this, in a context in which financing costs are at minimum levels, with mortgage interest rates of around 2.2%. The increase in demand favoured construction activity and between January and October, 28.0% more permits were signed, taking the total to 60,695. In this way, house prices rose again during the third quarter, following a moderation in Q2 (by 2.7% according to the Ministry of Development and by 6.6% according to INE).
The Catalan uncertainty
The uncertainty resulting from the political events in Cataluña will influence the evolution of the market. It already forced the moderation of the growth forecasts for the sector as a whole in 2017 and has determined the projections for 2018. Although most of the data from the last quarter has not been published yet, the figures that have been released indicate a certain deceleration, such as house sales in October, which grew by less than expected.
Between the months of June and September, house sales in Spain remained at relatively high levels. The data reveals that house sales amounted to around 45,000 transactions per month, according to data from the Notaries’ Centre for Statistical Information (CIEN). Meanwhile, during the month of October, house sales decreased by 9.3%, the greatest decrease recorded in recent months and that may be related to the increase in uncertainty.
Alicante, Málaga, Valencia, Madrid and Tarragona are the five provinces that attracted the most resident buyers from other provinces between January and September. Nevertheless, when we compare the total number of homes sold in each province, we see that those where second residences have the highest market share are those that are closest to large cities. Such is the case of Ávila, Segovia and Toledo, provinces close to Madrid where around 35% of homes sold in each one are acquired by residents from other provinces. The same thing happens in Cantabria, close to Bilbao and its surrounding area, and in Tarragona, close to Barcelona.
Original story: El Periódico (by Max Jiménez Botías)
Translation: Carmel Drake
The post BBVA Research: House Sales Will Exceed 550,000 in 2018 appeared first on Aura Real Estate Experts.
Source:: AURA Real Estate Experts