Spanish property prices set to rise again in 2019 (estimated 5%)
According to this article published today on the website Eleconomista.es the future is looking bright for the Spanish property market in 2019
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Ten years after the bursting of the housing bubble, the housing market can celebrate that it has lived its best year in 2018 after the crisis, registering a year-on-year increase in prices of 5.8% in the last quarter of last year.
It is the highest price since the third quarter of 2007, the year in which the houses touched ceiling with average prices of 2,044 euros per square meter. Now the finished housing (new and used) stands at 1,337 euros, which means that the market is still 34.7% below the peak, according to the latest Tinsa study.
The year 2019 also starts with good prospects according to the experts, although they warn that in large cities, which have been pulling the price up to now, "some symptoms of fatigue are starting to appreciate in the growth rate".
"Some symptoms of fatigue in the rate of growth begin to be appreciated".
"The housing market will continue to show clear signs of recovery because we are in an expansive cycle of the sector, but it will be a more moderate growth than we have seen this year for two reasons: the forecasts of different international organizations and of our own Government point to a weak growth and, secondly, because the context of financing will change with an eventual rise in rates and new rules in the market, such as the mortgage law ", highlights Beatriz Toribio, Director of Studies and Public Affairs of Fotocasa.
In addition, the expert says that "this recovery will be more contained because, as our studies reveal, the demand of the average citizen does not quite wake up." Although in 2018 we had a more positive macroeconomic context, the loss of purchasing power of the Spaniards during the crisis, the lack of savings, the quality and temporality of employment in our country complicate access to housing, especially in the most difficult age segments, such as young people ".
More sales and mortgages
It is estimated that the Spanish economy will grow in 2019 at a slightly lower rate than the current one, with an expected average annual variation of 2.6% in 2018 and 2.2% in 2019, according to the Funcas forecast panel for November 2018, with a lower contribution of demand (slowdown in the growth of private consumption) and perhaps a greater contribution of exports. In any case, the unemployment rate would continue to fall.
With these forecasts, from Tinsa hope that "the residential market continues to grow in number of transactions at a good pace, although somewhat more moderate than in recent quarters, while the price increases are consolidated outside the main urban areas and coastal territories, where until now the bulk of the recovery of values has taken place from a minimum, the new mortgages will grow at a somewhat greater rate than the total transactions and the new work will continue its path of recovery ".
Specifically, the appraiser estimates that the average price of the house will increase between 5 and 7% next year.
Regarding the number of operations, "economic recovery, employment and the consolidation of mortgage financing will allow" we close 2018 close to 520,000 sales transactions, which would be 12% more than in 2017 and exceed for the first time since 2008 the barrier of half a million sales, "says Toribio.
Thus, these figures will continue to increase, but at a more relaxed pace, according to the forecasts of the Ministry of Development, which expects the volume of operations to be between 625,000 and 650,000, which represents a growth of 5-10.
New housing
With regard to mortgages Toribio estimates that 2018 will close around 350,000 mortgages, 12% more than a year ago, while Notaries foresee for 2019 an increase of between 10 and 15%, reaching between 275,000- 300,000 operations.
According to the report of Sociedad de Tasación, in 2018 the average price of new housing in Spain increased by 5.4% in provincial capitals, reaching 2,348 euros per m2, with a 2.8% growth in the second half of the year, less than 3.3% registered in the same period last year. According to this study, the average price of a typical house of 90 m2 in provincial capitals is 211,300 euros.
The lack of savings, the temporality and quality of employment complicate access to housing
The provincial capitals, led by Barcelona (4,188 euros), San Sebastián (3,515 euros) and closely followed by Madrid (3,404 euros), continue to exert a driving effect on the increase in the prices of the national territory.
In the rest of the cities studied, which are not provincial capitals, the average price of a new house was 1,632 euros per m2, which represents an increase of 3.3% compared to December of the previous year.
According to the estimations of the Appraisal Society in 2019, the price of new housing will grow, on average, in a range of between 4.5 and 5%, provided that the fundamental variables of the Spanish economy and the international context do not suffer alterations of non-real estate causes."
