BBVA Research | GDP contracted by 8.7% in the third quarter of 2020 compared to the same period in 2019, while housing sales increased by 4%. In Spain we are used to housing being the cause of recessions and being one of the last sectors to recover. The vigor of the upturn in purchases has therefore been a surprise.
Firstly, because it doesn’t come in the wake of a protracted price adjustment. Secondly, because there has been little change in financing conditions. Thirdly, because it is occurring in the midst of a period of high uncertainty. Finally, foreign demand has completely vanished.
The factors that would be supporting the recovery in sales look to be temporary and do not compensate for the falls observed during the lockdown and, eventually, the worsening of fundamentals (new waves of contagion, restrictions on movement, falls in income) may lead to a further decline in sales.
In any case, the sector is better prepared than in the past to handle the crisis, and it is possible that with the boost in activity expected with the arrival of vaccines and funds linked to the NGEU, it may be one of the leading sectors in terms of recovery.