Spanish Property Recovery Starts Now Says Government Official

Mario Garcés (left), with Ana Pastor, Minister of Public Works.

Mario Garcés (left), with Ana Pastor, Minister of Public Works.

Things are looking up for the Spanish property sector this year, claims Mario Garcés (pictured left), under-secretary of state at the Ministry of Public (Fomento), talking at a conference organised by the Spanish Property Studies Foundation.

This year more properties will be sold, more homes built, and more mortgages approved than in recent years, he claimed.

He also said that the rental market will increase significantly, having gained two per cent market share compared to property ownership in the last 18 months.

Garcés’s optimism is based on data showing a recovery underway, he said. House prices have started to rise, and sales are up, especially to foreigners. 21,300 new mortgages were approved in February, according to the latest data from the NIE, an annualised increase of almost 30 per cent, and the best month for mortgage approvals since 2011.

Garcés was particularly optimistic about the prospects for the rental market following the recent reform of the long-term rental law (Ley de Arrendamientos Urbanos in Spanish). Owner-occupiers are 78 per cent of households in Spain, and rental tenants just 15 per cent, leaving the rental market lots of room to grow to reach anything like the levels of 50 per cent common in some other European countries like Germany. The percentage of Spanish households living in rented accommodation has increased by two per cent in the last 18 months.

“We’re turning the property situation around,” said Garcés. “After considerable effort, we’re in recovery mode, and this is here to stay”. He also insisted that Spain must learn lessons from the past to avoid a repeat of boom and bust.

Garcés also mentioned the recent Urban Reform and Refurbishment Law (Ley de rehabilitación y regeneración urbana in Spanish), introduced by his Ministry to encourage the refurbishment of the old quarters of Spain’s many historic cities. He claimed that some €2,400 million will be invested in property refurbishment in the next three years direct 50,000 jobs and 200,000 indirectly.

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