According to a study carried by the BBVA Bank, during 2018 housing prices will continue to rise but at a slower pace than in previous years. We already wrote about the facts and figures that show how during the first term of 2018 housing prices were making great strides. In the first three months of 2018, real estate deals increased 23% with regard to 2017. The study carried out by BBVA Research, estimates that 570.000 real estate properties will have been sold by the end of 2018, which is 7% more than in 2017. We must admit that these are good numbers. However, the numbers are substantially lower than in 2017 which amounted to no less than 16,3%. If we compare these facts and figures with the ones in 2013, when only 300.000 real estate deals were signed, having been the lowest number during those years, then we can say that the recovery of our real estate sector seems to be a reality.
ANALYSING THE RISING OF PRICES
If the report carried out by the BBVA Bank is fulfilled, then housing prices in Spain will increase 5% when 2018 ends. This fact assumes that there will be a rise of 4,5% which is similar to the one in 2017. As a matter of fact, we have recently written, in this blog, about housing price increase in Spain. In that article we stated that during the first term of 2018, housing prices rose 3,8%. This fact worried some analysts because it might mean the possibility of a new housing bubble. In this regard, the Bank appeals for calm and considers it highly unlikely that the same situation can be repeated. The Bank points out that in those days, banks offered credit facilities on mortgage loans and this does not happen nowadays. According to the BBVA Bank, the current development of Spanish real estate is in line with the level of prices. In 2017, the highest increase in prices took place, firstly in the region of Madrid (with an increase of 35,6%), followed by Catalonia and the Balearic Islands with an approximate increase of 28%.
Another issue to bear in mind is newly built housing. It is calculated that by the end of 2018, there will be 15% more issuances of visas with regard to 2017. In 2017, there had been an increase of 26% in newly built housing with regard to the previous year. These facts and figures inject optimism even though we should be cautious. In these last months, political instability in Catalonia has significantly determined real estate deals in the region. We must wait and see what happens and if Spanish real estate carries on along the correct path.