Signs of recovery in the Spanish property market are starting to have a positive impact on other areas of the economy, like rising employment and consumption of construction materials, but especially on demand for urban land, reports the Spanish press.
After crashing more than 45 per cent since the peak, urban land prices rose 5.2 per cent last year as a national average, according to official data.
During 2014, the number of building land sales rose to a total of 15,900 transactions (9.2 per cent more than 2013),reveal figures from the Spanish Ministry of Development.
Increases in demand for building land were most noticeable in Andalusia, Madrid, Catalonia, Galicia, and the Basque Country – regions that have seen some of the best improvements in home sales.
Rising home sales are starting to filter through into building land demand, the key ingredient in the development of new homes.
Increased mortgage lending is one of the main drivers of growing demand for homes, explains the latest market report from BBVA Research, part of Spain’s second biggest bank.
Unbeatable fixed-interest rates, plus the expectation that Euribor base rates will continue to fall, are driving consumer optimism and encouraging Spaniards to take out new loans against real estate, as memories of the bust start to fade. Mortgage approvals went up by 19 per cent in February compared to the previous year.
Sentiments and activity in the construction sector are also starting to rise, albeit from a very low base. Concrete consumption rose 8.2 per cent in March (yoy), and new planning approvals rose for the first time in seven years last year.