The real estate investment, excluding the purchase of the first or second residence, has reached maximum levels since 2007 in the fourth quarter of 2019, according to the latest survey of the confidence of the Spanish investor of the manager J.P. Morgan AM.
The sale of homes registered a total of 501,085 transactions in 2019. This was due to the decline in second-hand housing transactions, as new home purchases increased 1.2 %, says the National Statistics Institute (INE). On the other hand, housing prices continued to rebound, according to Q4’19 statistics from the Spanish housing registers.
The average price of housing in Spain in 2019 increased by 3.6% last year. Only in December it experienced an increase of + 1.2%, according to the real estate valuation company Tinsa. The Mediterranean coast accumulates three consecutive months of price falls.
Spanish real estate still has growth to deliver. Regardless of global economic slowdown, Brexit or trade tensions, we think the country’s competitive labour market should support one of the highest economic growth rates in Europe. Spanish GDP should grow at 1.7% pa over the next three years vs 1.1% in the Euro area, according to BofA economists.
C. Ocaña and R. Torres (Funcas) | After several years of recovery, Spain housing market shows signs of deceleration, opening a debate about whether this is the prelude to the outbreak of a new bubble. At present there is no real estate bubble in Spain and, therefore, the effects of the slowdown in the real estate sector itself and in the rest of the economy will be limited. In other words, in the current scenario, an adjustment can be expected but not a “flat tire” of the real estate sector.
Círculo de Empresarios | In Q3 2019, the Competitiveness Trend Index 1of Spain fell by 0.8% in comparison to the EU-28. This confirms that, since January, the competitiveness via prices of the Spanish economy has improved due to the moderation of the CPI (0.1% interannual in October).
Credit conditions (credit volumes and mortgage interest rates) have generally contributed significantly to price increases, while economic growth and inflation have been a consistent, although less important, factor, researchers at Edmond de Rothschild point out.
Bankinter | At this point of the cycle is it more attractive to invert in real estate through traded companies than real estate assets.
The capital of Spain is one of the most cyclical markets in Europe and rents are still far from the previous peaks. According to Morgan Stanley, there is more upward potential in values with exposure to offices in Madrid. Besides, Spain is expected to grow above the European average.
Caixabank Research | The Spanish housing sector is entering a more mature phase in the cycle, characterised by a weakening in growth in demand and prices. The factors which support the expansion of the housing market (creation of employment, favourable financial conditions and elevated external demand) continue evolving positively but are losing dynamism.