A selection of forecasts for the housing market so far published,with more to come. This is the first time in years that forecasts have contained some notes of optimism.
Bankinter, a mid-sized bank, see the first signs of recovery in five and a half years, as we come to the end of what they describe as an “exceptionally weak” year. They forecast sales will grow slowly in 2014 and 2015, though house prices will continue falling at the start of next year, bottoming out at around 1,450 to 1,470 €/m2, back where they were in 2003, undermined by the economic crisis, stagnant incomes, and continued mortgage restrictions. They point out that house prices are still high in relation to incomes.
House building will start again in 2016, once the stock of new homes on the market has fallen below 500,000. There are, however, 150,000 homes on the market that might never be sold, having been built in the boom far from big cities, in undesirable coastal areas, or in ghost towns. They warn that demand will never return to the levels of 400,000 new homes sold in 2006 and 2007.
Miguel Ángel Ariño, head of the Department of Decision Analysis at IESE Business School, says prices will continue to decline in the coming months, having declined 41pc since the peak.The change in the downward trend will be slow, and will be followed by months of stagnant prices. However, he also says this is a good time to buy a home due to the value on offer, but cautions against speculating on Spanish housing.
Eduardo Molet, a real estate consultant often cited in the Spanish press, points out that the construction sector has fallen from 16pc of GDP in 2006 to 8pc now. He expects the housing market recovery to start in 2014 after seven years of big falls, but the recovery will be very gradual, and won’t gather pace until 2017. He expects sales volumes to hit bottom this year, and start recovering next year.
Molet says house prices are down 52pc from the peak, and will start to recover in some segments next year. Prices have already started to recover slightly in prime areas of the coast and cities like Barcelona and Madrid, which attract wealthy cash buyers, including foreign investors. In downmarket areas struggling with an oversupply of homes where buyers need mortgage financing, prices will carry on down.
Foro Consultores, a Spanish real estate consultancy, forecast that house prices will start rising at the end of 2014. They point to signs of confidence returning to the Spanish economy, and banks reaching the end of their provisioning cycle, after which they can start lending again
Jones Lang Lasalle, an international real estate consultancy, say that the 0.7pc quarterly rise in house prices in Q3 was a sign of things to come, and forecast that Spanish house prices will bottom out in 2014. Nevertheless, there will be no quick turn around in prices, says Carlos Ferrer-Bonsoms, head of Jones Lang Lasalle in Spain. “There is no risk of a bubble. I don’t think that prices will bounce. When they reach bottom they will stay there,” he has said, citing high unemployment, low growth, and mortgage credit restrictions. He forecasts that price will continue falling in some areas of the coast, whilst rising in others, for example the Balearics.