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Spanish property a one-way bet for next five years?

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Spain is on the threshold of a real estate market expansion that will last five “marvellous” years, argues one of Spain’s best-known property market experts.

Gonzalo Bernardos, an economics professor and director of the real estate programme at the University of Barcelona, says this is the best time to buy a property in Spain, especially in Barcelona.

“We are on the threshold of the best time to buy a home in Spain,” says Bernardos, quoted in last Sunday’s edition of the La Vanguardia. “2016 is a year of real estate expansion in which the trend of every [property] asset is towards price increases.” That sounds to me like saying all Spanish property will be a one-way bet for the next five years. I’m not convinced as far as the whole of Spain goes, though I could be convinced in the case of Barcelona, Ibiza, Marbella, Madrid, and other hotspots.

According to Bernardos, the current environment of low interest rates helps explain why property is now such an attractive investment. “The residential market is once again a refuge [for investors] and the key to everything is low interest rates,” says Bernardos, who goes on to explain that low interest rates have now left monthly mortgage repayments “substantially” below rental prices. Why rent when it’s cheaper to buy? This raises the appetite of both investors and homebuyers.

So it all looks very rosy, as far as Bernardos is concerned. “After the dangerous decade (2006 – 2015) will come five marvellous years (2016-2020),” he claims. Investor interest, and strong economic growth in Spain (around 3%) will “finish off the hangover and carry the real estate market to a new period of growth.”

Bernardos is bullish despite concern about the global economy, arguing that the international situation will be “compensated for by an increase in Spanish household spending and company investment, especially in construction.”


Barcelona will lead the market up in terms of prices this year, he forecasts. House prices will rise as much as 12% on average for the country, but as much as 18% in the Catalan capital. The share of foreign buyers will fall as domestic buyers increase.

But when it comes to prime Barcelona, foreign investors will still pay a leading role. “The high-end will lead the market until 2018, with a second wave of crazed international demand pushing prices up as much as 25% in Sarria Sant Gervasi, Eixample, Ciutat Vella and Les Corts,” forecasts Bernardos.


Bernardos rules out a new speculative bubble building on the grounds that “if speculative demand does reappear, it will be very reduced and limited to certain areas of the big cities,” in particular the most “emblematic” streets, which would mean, for example, Paseo de Gracia in Barcelona, and Calle Serrano in Madrid. “Anyway, the bank will give far less credit for speculating with,” he adds.

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