After years dragging down the Spanish economy, the property sector will finally start expanding and contributing to growth in 2015, argues a new report titled ‘The Case for Spain III: Plus Ultra’ by Arcano, a financial advisory and asset management company.
The report claims that in 2015, both the residential construction sector, and Spanish property prices, will come back to life. This will mainly be due to (1) an improvement in credit conditions with increasing mortgage approvals, (2) a higher share of foreign investment, and (3) a recovery of demand in Spain. As a result the sector will lead GDP growth in key regions on the back of the inevitable reactivation of new-home construction.
Credit conditions have already started improving, according to Arcano, with the injection of money into Spanish bonds, whose 10-year yields reached their lowest in 200 years last autumn. The fall in yields went hand-in-hand with a rise in value caused by the arrival of liquidity that “has gradually permeated other sectors of the economy, and will accelerate in 2015,” the company claims.