BBVA, Spain’s second largest bank, argues in new report that the Spanish property market is at a turning point between crisis and recovery.
In a report they call a ‘Spain Real Estate Flash’, prepared by BBVA Research in collaboration with the bank’s real estate division, and offering a monthly analysis of the market, BBVA forecast double-digit growth in demand, leading “towards price stabilisation,” with a reasonable probability that “2015 will mark the start of a moderate recovery in residential development.”
“The information available in November on the real estate sector confirms a turning point in demand, with two-digit growth rates, in a context of progress towards price stability,” explains the report’s introduction. “The slight increase in the number of building permits during the summer months suggests that the sector has already bottomed out, in terms of building activity, and that 2015 may mark the beginning of a moderate recovery in residential developments.”
Looking at data up to November 2014, the publication reports that the latest figures for purchases of Spanish property show “an improvement in demand”, thanks to better employment prospects, and the subsequent increase in consumer confidence. “2014 will see a turning point in transactions,” it adds.
Furthermore, this improvement can also be seen in the rise in new mortgage loans, although the report puts particular emphasis on the increase of new property construction permits up to September – up 5.7 per cent according to the Spanish Ministry of Housing – and the rise in property investment in the third quarter -up by 1.3 per cent as per data from the Spanish National Institute of Statistics.
With these figures in hand BBVA argues that “the sector has bottomed out as far as construction activity is concerned,” in a situation where “property price adjustment is still going on” but moving towards a “stable” scenario.
You can read the full report in English (pdf) here.