[vc_row][vc_column][vc_column_text]Residential construction in Spain is expected to rise by 5.6 % in 2018 and gradually increase at a moderate rate until 2021.
House prices are expected to rise
In concrete terms, the sector expects house prices to rise by 4.3% in the next year, by 3.5% in 2020 and by 3% overall in 2021. For this year, it is assumed that economic indicators, falling unemployment and low interest rates will continue to favor the rise in real estate prices and the recovery of the real estate market. The reason given for this is that, despite substantial increases in recent years, house prices will reach 24% of their 2007 peak at the end of 2017.
In addition, the sector points out that with increasing sales acceleration, the average selling time in the second quarter of this year has fallen from 8.3 months in the same quarter of 2017 to 8 months.
However, there is still a large difference between the respective regions in terms of demand and housing stock. The result of this are “considerable differences” in price growth. For example, in the second quarter of this year, prices in the region of Madrid rose by 15.5% a year, while in Extremadura they fell by 3.4%.
There are no fixed prices
The rating agency also comments on Spanish GDP growth. According to this, the current level is expected to slow to a growth rate of 2.8% in the coming years. Private consumption and various investments are expected to be the most important growth factors here. As far as economic risks are concerned, according to the company this can be largely attributed to political uncertainties.
This can be illustrated by the following comparison between the cities of Madrid and Barcelona: while prices rose by 18.9% in the second quarter in Madrid – where increases were sometimes strongest – they fell to 6% per annum in Barcelona.
Ultimately, the prognosis promises particularly attractive mortgage rates for house purchases, although the agency expects that the rent and the relationship between prices and citizen income will continue to deteriorate, but should remain definetely below the status of 2007.
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