INVESTMENT in Spanish housing is set to post strong results this year as one of the country’s biggest banks predicted a healthy 3.4 per cent growth in the sector.
In its ‘Spanish situation’ report BBVA noted that residential investment reached ‘surprisingly positive’ levels in the first half of the year, with the trend set to continue throughout 2016.
The bank has, however, reduced its 2017 forecast from a bullish 4.4 per cent to a more restrained 3.3 per cent, identifying Brexit and the lingering doubts over whether Spain will have a fully formed government by the year’s end, as potential obstacles to greater growth.
Significantly, the bank also predicts that favourable financing conditions will lead to increased demand for residential property, which is important given the ongoing decline in the average value of properties sold.
June sales were up 7.1 per cent compared to last year’s figures, and new mortgage signings up 13.3 per cent, but the average price of homes sold was €1,290 per square metre, down 1.9 per cent on June 2015, suggesting too much supply remains an issue.
Analysts have suggested that the price falls are indicative of renewed market stability, while it is also important to note that nationwide averages mask dramatic differences between coastal and cosmopolitan property hotspots and the more sparsely populated interior areas.