Bankinter report forecasts a brighter outlook for 2015

THE demand for housing in Spain is set to pick up in 2015 resulting in higher prices.

Experts are predicting that house prices are set to rise by an average of 1.5 per cent this year and by up to five per cent more in 2016.

According to the bi-annual report by financial institution Bankinter on the real estate market in Spain, the diversity of the Spanish property market means that prices in most of the provincial capitals and towns will remain stable and may even fall slightly, but in prime zones such as big cities and popular tourist areas such as the Costas, prices could register increases by as much as three per cent in 2015.

The report cites the country’s economic recovery as the main factor in the projected rise in housing prices. An estimated GDP growth of 2.2 per cent will lead to a better work environment, increased confidence and more access to funding, which will in turn lead to higher prices.

However, the report also predicts that unemployment will remain above 20 per cent in the next two years and in turn the recovery of the sector will be relatively slow. Bankinter expects that there will be demand for 400,000 homes in 2015, rising to 450,000 in 2016.