The housing market is recovering after a deep crisis, but there is no sign of overheating, argues the Bank of Spain.

There has been a lot of talk in the Spanish media recently about signs of the housing market overheating, at least in certain areas like Barcelona, Madrid, and the Balearics.

The home building industry, or what is left of it, regularly has to argue that signs of recovery do not mean another bubble is inflating, and only the other day Juan Antonio Gómez-Pintado, head of the Spanish Developers’ Association, went on record in an interviewed with the Spanish daily El Mundo saying “I see no risk of another real estate bubble.”

Now the Bank of Spain has jumped in saying it sees “no sign of overheating” in the housing sector, during a presentation of macroeconomic figures by the Institution’s head of statistics. Whilst conceding that the market is showing signs of growth that “can be significant”, with transactions, housing starts and house prices all on the rise, the Bank sees this as a normal recovery after a “very significant” adjustment (bank speak for crash).

The last boom and bust was so traumatic that nobody wants a repeat, so the media jumps on any sign of recovery as a potential sign of another another bubble in the making. The Spanish planning system, tax system, and culture of pelotazos (land speculation) all encourage speculative booms, so it’s hardly surprising.