The Spanish Association for Value Analysis (AEV in Spanish) first-quarter report on the housing market argues there is still no sign of increasing house prices at a national level, whatever the official figures say.
84 per cent of the professionals consulted by the AEV agreed that there are no clear signs of a general rise in property prices. So nothing has changed on that front since the AEV presented its first report in February, even though expectations of economic growth have improved since then.
However, the survey also revealed that property prices are rising in some segments characterised by supply shortages and investor interest, in particular on the coast where foreign buyers are also active. This confirms the emergence of a two-speed housing market in Spain, with prices simultaneously rising and falling in different segments.
The majority of professionals surveyed believe that, despite big peak-to-present declines, current price levels are not enough to kick start a country-wide recovery since the property market is largely governed by structural factors like demographics, employment levels, and the cost of borrowing. But that might change with time if Eurozone interest rates continue to stay low, and appealing investment alternatives remain scarce.
60 per cent of respondents expect the market to stabilise, followed by a slow recovery, though most also agree there is too much uncertainty around to forecast what the new cycle will look like.
Nevertheless, the AEV report does argue that recovery will be strongest in large cities and coastal areas that attract foreign demand, as happened after previous economic crises, and 21 out of 25 professionals surveyed agree with that claim.