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July 28, 2014

Forecasts for the development of real estate market in Spain

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Forecasts for the development of real estate market in Spain

According to estimates of a large Spanish bank Bankinter, the housing prices in the country will no longer fall during the second half of 2014. In addition, specialists believe that the demand for housing will grow in 2014 for the first time since 2010. The Bank ensures that prices will go up by 4% in 2015. Nevertheless, behind these indicators for increase is the coming to the Spanish market of foreign investors. The Bank believes that in Spain there is a “reserve” of 740,000 units of real estate, of which 100,000 are “undesirable”, and must be sold on the market at bargain prices.

The cost of real estate in Spain is at a point where the prices are ready to grow up. Some market research shows, as well as the companies involved in it, such as large national banks, indicate that specific circumstance. For example, Bankinter ensures that housing prices stop falling in the second half of 2014 and begin to rise in 2015, but not more than at 4% in general. To such a development of real estate market contributes to the arrival of foreign investors to the Spanish market, attracted by the potential benefits of the Spanish real estate market.

According to the report on the housing market in Spain, Bankinter believes that the country has a shortage of supply of real estate, as though the “margin” of unsold units is around 740,000, between which there are not less than 100,000 objects of “undesirable” properties that can be sold only by very low price, so sales of “normal” real estate will grow this year. At this point, the report Bankinter also noted that “it is not probably that construction activity or housing offer will increase significantly during 2014 and 2015”. The Bank notes that this same effect, coupled with lower sales in the secondary housing market in the downward phase of the cycle, is already causing offer constraints of the real estate in prime locations of major cities, “which allow us to predict the dynamics of the rise in prices at the best places”.

Nevertheless, the Bankinter said that this price recovery will still be “limited”, because, despite the cumulative decline in prices during the economic crisis, the abolition of tax incentives for the purchase of property and wage restraint, are visible obstacles on the demand side.

 

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