Why The Spanish Property Market Is Getting Safer
Predictions that say the worst is over for the Spanish property market have been promoted by self interested parties for the last couple of years. Buty now with some realistic predictions from some top institutions they could now be right.
A new market forecast report from Instituto de Practica Empresarial (IPE) business school predicts that the market is set to grow by between 5% and 7% in major cities such as Madrid and Barcelona and 3% in other cities.
The IPE says that home prices on the Costa del Sol are already up 10% this year, and now represent 5% of all sales nationwide and if sales continue growing at their present trend, the property market in Málaga province will increase to 20% of the overall Spanish market.
The growth is buoyed by foreign demand for holiday homes on the Costa del Sol and the IPE report suggests that surging sales will help reduce the glut of new homes on the coast. Indeed, the excess inventory of new homes is expected to fall by 50% this year.
The analysts at credit ratings agency Standard & Poor& are also predicting that the slump in the Spanish property market will finally become a thing of the past by the end of this year, with an annual increase of 2.5% The S&P report is based on the perception that the general economic recovery in Spain is gaining momentum, and the analysts also believe that prices will rise by another 2.5% in 2016 and by 4% the following year.
Prices in some of the most desirable areas of Spain have fallen by up to 50 per cent since 2007, but the market appears to be on the path to recovery. According to Eurostat, the statistical office of the European Union, prices in Spain were up by 1.6 per cent year-on-year during the first quarter of this year. And according to the research department of La Caixa, one of Spain’s biggest banks, there will be no more big falls in house prices over the coming months and Spanish property is as cheap as it gets
The Spanish real estate growth is buoyed by foreign demand for holiday homes on the Costa del Sol and the IPE report suggests that surging sales will help reduce the glut of new homes on the coast. Indeed, the excess inventory of new homes is expected to fall by 50% this year.