An industry association of appraisal companies expects Spanish house prices to rise slowly in future, whilst pointing out reasons not to expect another boom anytime soon.
The Spanish Association of Value Analysis (La Asociación Española de Análisis de Valor or AEV in Spanish), which represents valuation companies in Spain, forecasts a “slow but sustained increase in average house prices,” in it’s latest ‘Valuations Observatory’ report, based on a survey of experts in the business.
But the tone of the report is subdued. With signs of stabilisation in the Spanish real estate sector after years of crisis, they suggest this could “incentivise investment and drive new building in certain areas and types of product,” if the trend consolidates.
They reveal that 90% of the experts surveyed for the report think that conditions still have to improve for Spanish buyers before the building industry can hope for a proper recovery.
“The job market is still unstable and precarious, the real purchasing power of families has declined, and mortgage loans still require a level of savings that is unthinkable for the majority of mid and low income families,” explains the report.
The continuing oversupply of homes on the market, many of which are still in the hands of banks, is another obstacle in the way of a recovery, they say.
Spain’s political situation is not helping. House prices would have a better chance of rising with a strong and stable Government in power in Madrid, they suggest. That would also encourage foreign investors, many of whom are now choosing to “wait and see.”
Bear in mind the report is talking about the Spanish housing market in general, rather than specific segments. In reality some areas are doing much better than others, especially prime city and coastal areas where foreigners tend to buy.