The evolution of housing prices is on the rise, once the bottom was hit in the last quarter of 2012. The trend change seen in 2014, materialized in 2015 and continues its upward trend in the first quarter of 2016. However, it should be kept in mind that housing prices are currently in the amounts of the beginning of 2003.
It has importance in these new increases of sales, the economic situation of Spain, and its economy in particular, as well as the international investment in the real estate market.
In 2015, these investments accounted for more than 13% of total operations, having acquired more than 46,000 homes.
From the nationalities of these acquirers, stand out the British, with 23.95% followed by the French (8.17%) and German (7.79%). On the other hand, there has been an increase in purchases by Chinese (3.88%) and a drop in the number of Russians who have remained at 3%. The table is as follows:
Housing purchases have been marked by a new historical increased that represents 81.17%, although they begin to show some collapse, beginning to appreciate a certain degree of recovery in the initiation of new housing, which will materialize in 2016.
On the other hand, mortgage indebtedness continues to maintain its upward trend as a result of the increase in the price of housing and the reactivation of the mortgage market.
Interest rates also continued to fall, reaching 2.49% in the fourth quarter of 2015, consolidating a very favorable performance, strengthening the dynamism of the mortgage market and the accessibility conditions.
All this has led to accumulate around a year and a half with growth of prices, since the appearance of the first positive rates in 2014.
The confluence of certain elements, such as the low or zero profitability of bank deposits, the Euribor in negative rates, the instability of the stock market, the liquidity of the system, and the improvement in the economy of the country, sparkled the interest of many investors in Spanish real estate market, with important business opportunities, not only for acquiring assets whose evolution in the price is being seen day by day, but also through their leased operation which can generate returns that make them unbeatable with the financial products, becoming a refuge for certain profiles of investors, who flee from high risks.
The conclusion is that house prices – in major cities and certain tourist locations – are expected to continue to raise, which, together with the demand for housing by a growing population sector, represents an attractive investment product that deserves to be taken into account.
In Barcelona, on May 2016
Leonardo Cárdenas Armesto
Partner Real – Estate Department