Servihabitat, the biggest real estate servicer in Spain (platform managing and selling large portfolios of property), owned by the La Caixa banking group, has published a report on what to expect from the Spanish housing market this year. Here’s my summary of the main points.
On balance it’s a reasonably positive picture of the market today and forecast for the rest of the year. In essence Servihabitat describe the situation as a “moderate but sustained recovery.”
Here are the main points:
- Home sales will rise 10% this year to 440,000.
- Housing starts will rise 10% to 44,600, and construction completions 12.5% to 50,800.
- The new homes inventory will fall by 125,000 (25%), from 492,000 to 367,500.
- The glut of new homes is increasingly concentrated in areas with little or no demand, whilst shortages are appearing in areas of high demand like Madrid, Barcelona, and the Balearics.
- Prices will rise 3.8% on average, lead by the Balearics 6.8%, Valencian Community 4.6%, Catalonia 4.4%, and Madrid 4%.
- The percentage of households living in rental accommodation will increase to 21%, closer to EU levels, and 14% of those households will be foreigners, principally from Morocco and the UK.
- The market lift is coming from pent-up demand unleashed by the improving outlook and increased mortgage credit.
- The current political gridlock in Madrid shows no signs of undermining the recovery. More worrying are problems in the planning system at a local level.
Based on figures from the Government (Fomento) the report says that foreign buyers purchased 69,196 homes in Spain last year, representing 17% of the market overall, but as much as 39% in the Balearics, 37% in the Canaries, and 34% in the Valencian Region.
Now comes a howling mistake. They say that 93% of foreign buyers were resident in Spain, and just 7% non-resident. In reality non-residents are the bigger group. More reliable figures from the General Council of Notaries say that non-residents were 52% of the market last year, though personally I suspect the number is even higher. The origin of the mistake lies in the Government’s figures, which Servihabitat have reproduced.