Bank forecasts increasing sales and prices this year

Spanish home sales per year, including Bankinter forecasts
Spanish home sales per year, including Bankinter forecasts. Red = new build, grey = resale

Bankinter forecast that home sales will increase 14% this year, and house prices by 3%.

They forecast a total of 420,000 sales in 2016, up by 53,000 on last year, and 450,000 in 2017 (+7% year-on-year).

House prices will rise by 3% on average, and by 5% in prime locations, they predict.

More jobs, better financing, and the increasing attractiveness of property relative to other assets will all help boost the market, say Bankinter in their latest report on the Spanish housing market.

“The combination of higher demand and a very limited supply in big cities will permit an increase in average prices in 2016 and 2017,” explains the report. “This improvement in outlook will extend to the promotion of new homes, which will reawaken in 2016 on the back of a rise in planning approvals in 2015.”

But don’t expect a repeat of the boom years anytime soon, say Bankinter. A declining population, the realisation that property prices can fall – a lesson learned in the crisis – and, most of all, unemployment stubbornly above 17.5% until at least the end of 2017, are all reasons the bank gives for expecting modest growth rather than a repeat of the euphoria of the boom years.

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