Prospects for the real estate market of the year 2018.
2017 was a good year for the real estate market. We are witnessing price increases, increase of new construction and buildings, and growth of the number of new mortgages (favoured by of low interest rates – mortgages).
Construction sector has increased its contribution to Gross Domestic Product, reaching levels prior to 2011. Construction employment has also increased, although with lower wages.
Spanish Statistics Institut confirms that the last quarter of 2017 construction sector has grown by 4%, and has created about 1.5 million jobs in Spain.
However, we are still far from the construction volume prior to May 2008, the date on which the real estate boom in Spain failed. However, as we say, these are positive aspects, which lead us to think of a new recovery in the Spanish real estate market.
With regard to real estate as investment, we have reached profitability levels close to 11% during the year 2017. This increases the interest of the Spanish market as a point of attraction for foreign investors looking for greater profitability of it can be obtained through other sources.
Property prices have risen slightly by 6%, although there have been areas that have reached 13, and 10%, respectively.
Thus, we see as regions like the Balearic Islands, Catalonia, Madrid has greatly exceeded the 10% increase in sales prices, followed by or Valencia región and Andalucía.
As for the rental market, large cities are already taking restrictive measures when granting licenses to register tourist apartments for rent, especially in Barcelona and Madrid. These actions try to contain the increase in the price of general rental market, and increase the offer destined to permanent residential rental.
In the same way, banks have changed the financial policy with respect to the new panorama, and are open to offer financing, encouraged by these positive points, and with a market of low interest rates.
With all this, 2018 is presented with great perspectives in real estate market for both, investment and residential.
With respect to the sale by foreign investors, also records. Transactions which bring us to other years before May 2008. British are still the leaders of purchases, being close to 19%, but is less than previous years. Then, follow French, with 8% of the total, and Germans and Swedes that reach 7%, Belgians 6.5% and Italians who almost reach 5.4%.
We are witnessing a diversification of the buyer, which has reduced the effects of the reduction of the British market after the Brexit.