The recovery in Spanish residential investment won’t start until next year, according to Spain’s second largest bank.
The amount of money being invested in Spanish residential property will fall another 8.3pc this year, according to the latest forecast by the research department of BBVA.
The recovery in the housing market won’t begin until next year, when the bank forecasts residential investment to grow by a timid 2.1pc, after seven years of contraction and a cumulative decline of around 50pc. At that rate it will take the market another decade or more to get back to normal.
BBVA say it is hard to forecast the impact on investment of recent changes such as the introduction of Spain’s so-called bad bank, the elimination of tax breaks for home buyers, and the increase in VAT on new homes. These all add to the uncertainty in the market.
BBVA also forecast that the new housing glut will experience a “modest” decline in the course of this year.
Meanwhile, and new report on outlook for the European real estate sector by PwC and the Urban Land Institute recommends that investors start looking at Spain to take advantage of the inevitable opportunities at this stage in a housing market bust.
David RG says:
Again the gurus of the real state sector, claiming that we are hitting rock bottom prices and now the opportunities will flourish….Just as a matter of fact, why dont they put their money where they put their mouth and PwC don´t start purchasing all those candies for them selves¿?
They are full of rubbish, the property market will continue in a dramatic fall as the country is doing so.
Corrupt and incapable PP at office… foreign investors mesmerize about all the media highlights, let´s name them: corruption, unemployment rate, dull youngsters good for nothing, lack of investment on R&D and what is more worring no productive sector as an alternative to the real estate and property promotion as the thrust engine of the domestic economy…who will put a penny here having the chance to invest in up-market emerging countries?
I rather invest in Southern Asia or SouthAmerica than here, and in a couple of years or 3 rape the profit as it will be a better scenario…
The country will go for about 10 years of flat economy as bad as Japan did in the 90´s.
SteveA says:
What does it mean ‘back to normal’? Historically ‘normal’ in Spain has always meant dirt cheap properties. The brief boom 2001-2008 was abnormal not normal. My betting is that prices will fall at least another 10% or so then stick there for ten years.