A selection of house price predictions and other forecasts taken from a series of articles in the Spanish press, summarised in bullet points.
The Spanish Association of Developers and Constructors (APCE) have just finished their most upbeat annual conference in years with business growing in many parts of Spain. The state of the industry was reviewed, and predictions made, coinciding with a slew of forecasts from other sources:
- The real estate recovery is going hand in hand with economic recovery, fueled by lower energy prices, low mortgage rates, and growing employment, with 1.3 million more jobs created.
- New home building is rising fast (from a low base), with building licences up 27% in Spain between January and May, and 66% in Madrid.
- House prices are up 7% in Madrid and 9% in Barcelona.
- The inventory of new homes for sale has largely disappeared in Madrid, Barcelona and Bilbao.
- House prices will rise by an average of 3% to 5% in the next year and a half say Bankinter, a Spanish bank.
- House prices will rise 13% in 2017 led by “Barcelona, Madrid, and the islands, although central areas of the main provincial capitals will also join in,” forecasts Gonzalo Bernardos, economics professor and head of the real estate degree at the University of Barcelona. Bernardos is consistently the most bullish voice around.
- Barcelona and Madrid are “really hot markets where the recovery is intense and dangerous,” where prices are rising by “20% driven by the appetite of foreign investors, who see these capitals as part of the Champions’ League of cities in the world,” says Bernardos, referring to specific areas of the two cities in particular. In Madrid the hot areas are fun from Atocha to the Plaza de Castilla, and in Barcelona they include the Eixample, Les Corts, and the Ciutat Vella Old Town.
- Bernardos thinks prices are on course to hit their 2007 peaks by 2018, and then stabilise around +3% in 2019.
- Land prices increases an annualised 6.6% in Q2, which points toward rising house prices in the pipeline, say Caixabank Research. Land prices are a leading indicator that anticipate house price trends “by a few quarters” they say, whilst also pointing out that booming mortgage lending “continues to support the recovery” with new mortgage lending up 27% in July.
- BBVA Research forecast housing starts up 40% this year, and the glut to disappear in all but the worst locations.
- CBRE España forecast demand for new homes around 180,000 between 2016 and 2025, most of all in Madrid, where 15% of new homes will be built.
- IESE business school professor José Luis Suárez forecasts new homes demand will be 100,000 until 2020, rising to 140,000 thereafter.
- Bernardos says 175,000 in 2017, 235,000 in 2018, rising to 350,000 in 2020.
- In terms of overall sales, Suárez forecasts 505,000 home sales in 2017, 530,00 in 2018, and 540,000 in 2019, a big improvement on the crisis years but a far cry from the 900,000 boomtime peak.
- The real estate servicer Solvia forecast 450,000 home sales this year, and average price increase of 3.2%.
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