According to the agency Standard & Poor´s, the price forecast of housing in Spain will increase till 2020. Last August, this agency carried out a report which showed that a rise in housing prices is very feasible throughout the next three years, given that the Spanish real estate sector is at present undergoing good times. This agency has calculated a phased rise in 2017 of 4% and in 2018 of 4,5%. As for the following two years, after 2018, the price rise will be more moderate and it has been estimated at 3,5% in 2019 and 3% in 2020. A few weeks ago we stated that housing in Spain is on the path of recovery. In that article we pointed out that the pace of growth varied depending on the different autonomous communities. It is expected that in 2017, 500.000 will be sold in all, a figure which will exceed the 475.000 sales carried out in 2016. If we take into account that in 2016 real estate buying and selling rose nearly 14%, the maximum growth since 2010, then we get an idea of the significance of the facts and figures of 2017.
7 YEARS ON THE RISE
If Standard & Poor´s forecast comes true, then in 2020 there will have been 7 years in a row of an increase in prices in Spanish real estate. It is pure coincidence that the Spanish real estate crisis after the bubble burst also lasted for a similar period of time. According to the report of the North American agency, the key factor which allowed the Spanish residential sector to take off, was the drop in interest rates. If we compare Spain with other European countries, we can see a significant difference. In Spain, the interest rates dropped 53% more than in Italy and 30% more than in France. Foreign investors play a leading role in Spanish real estate. For instance, in the first term in 2017, 13% of the deals were carried out by foreign purchasers. However, we must bear in mind that the British are the main foreign buyers. Nevertheless, what will happen after the Brexit?
UNCERTAINTY OF THE BREXIT
Indeed, the Brexit has created great uncertainty in Europe as well as a cause for concern. However, regarding real estate in Spain there does not seem to be cause for alarm. Nowadays, second residences are the driving force behind Spanish real estate. Moreover, a large number of them are bought by tourists. We must also take into account that the largest number of tourists are British, 17 million per year. The British are also at the top of the list regarding the purchase of a second residence, accounting for 19%. Logically, there are growing fears that second residences will suffer from the effects of the new situation. In any case, Standard & Poor´s show reason for optimism as they believe that there will not be a marked variation. Likewise, the agency states that the development of Spanish real estate in the years to come will follow in the footsteps of other growing European markets, such as the German one which is expected to rise considerably in 2018.