Although in the last two years symptoms have already been detected and very positive data has been recorded in the Spanish real estate sector, it is in this year 2018 when the housing sales figures are expected to reach their best data since the end of the economic crisis.
The figures expected for this year according to numerous studies would reach 550,000 transactions so that all expectations would be exceeded. In fact, in the first quarter of the year, the average price of housing completed in Spain grew 3.8% year-on-year driven by Madrid and Palma de Mallorca, which recorded the highest increases with 17% and 14.7%, respectively. Prices are rising at a good pace and recovering much of the value lost during the economic crisis when the price of housing sank. And it is estimated that the price of housing rises this year around 5 percent, which added to the increases of previous years shows a clear recovery of the real estate sector.
At the state level, prices rise moderately, construction slowly recovers, gaining little by little in numbers of workers and employed in the sector and sales are growing at a good pace, but this does not mean that there is a bubble in the market. What the data do indicate is that there is a shortage of empty flats in the center of large cities and in important tourist spots such as Mallorca or Alicante.
Another phenomenon to take into account is that according to Aptur, 60% of the owners who can’t regularize their situation choose to sell and practically all operations are carried out to foreign citizens.
Another of the thermometers that marks the recovery of the sector, perhaps the most important, is the price of real estate. All the forecasts pointed out that the increases throughout this year would be around 2.5% to 6%, although in the big cities such as Madrid and Barcelona, and also in the Balearic Islands, the increases would be even more pronounced. Prices are growing at a similar rate (5%) to what they did in 2006, but they are still 40% below the highs of those years, except in large cities and islands, where that distance is reduced to 20 % or 30%.
Experts believe that the main levers that drive the demand for housing are the economy and employment, so they consider that the good prospects in the short and medium term in these two areas invite us to think of a residential market embarked on a path of recovery of prices and transactions. As employment stabilizes and wages increase, it is expected that it will also improve the access capacity to face the purchase of a house.
Similarly, the flow of investment, derived from the unusual context of low rates (attracted by assets adjusted in price by the crisis and with good prospects for profitability by rent), has led to intense growth in certain areas of these two large cities and in municipalities of great tourist attraction, such as Palma de Mallorca.