Spain Property Investment Up 67% In 2015; But Lack Of Opportunities Could Now Weigh

Real estateInvestors snap up coliving assets in Spain

Investment in Spain’s property sector rose 67% to a record 11.7 billion euros in 2015, according to a study by consultancy firm BNP Paribas Real Estate.  This figure is 25% higher than the total investment recorded in the pre-crisis years.

But the consultancy now predicts that investment volumes will stabilise at around 8.5 billion euros. This is due to the scarcity of adequate investment opportunities as well as a foreseeable rise in interest rates, amongst other factors.

The recovery in Spain’s real state sector has also been seen in the number of transactions in 2015, which reached a record 271 compared with 169 a year ago, BNP Paribas said. It also highlights that the retail property and office sectors were the most buoyant in 2015, with both clocking up total investment of close to 4 billion euros. Residential property assets only accounted for 5% of total investment.

The increase in investment is due in part to the price of properties in Spain, many of which still have upside and so could generate capital gains, as well as expectations for an improvement in rental yields and occupancy rates, the consultancy firm said.

According to data published by the National Statistics Institute regarding the transfer of property ownership, purchase-sale transactions rose 13.7% to 28,733 in November from a year earlier. And this figure has been rising for 15 consecutive months thanks to the increase in the second hand property market.

Of all the housing transactions registered in November, 80.5% involved second hand properties. These rose for the 21st consecutive month to 23,129, up 30.5% from a year ago. On the other hand, the number of transactions involving new homes fell 25.7%. In the 11 months to November 2015, total housing sales rose 11.5%.






About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.