Growth on all fronts for the Spanish property market

The research division of Spain’s second biggest banking group is upbeat about the prospects for the market this year.

BBVA Research forecast that house prices will rise 3% on average this year, sales will rise 10% to around 440,000 homes changing hands by year end, and planning approvals for the pipeline of new homes under construction up by 30%.

BBVA Research have huge resources and data at their disposal, and one of the biggest names in Spanish banking, so their quarterly “Spanish Real Estate Situation” reports are taken seriously in Spain, and get wide media coverage.

The fair outlook for the market as they see it comes from positive macro trends like rising employment and household income, which they explain “will have a positive role and continue stimulating demand for housing.” New mortgage lending rising at a good clip is also “playing a relevant role in the housing market recovery and will be key to its development in 2016.”

The Spanish property bubble burst with a monumental glut of more than 600,000 new homes for sale with no buyers in sight, which dragged down the market for years. But the glut has shrunk on the Mediterranean coast and in the big cities, and has “ceased to be a problem,” say BBVA Research. There are even some market segments where new homes “are already in short supply,”

In conclusion we are gradually running out of bottom price properties. We are starting to see a rise in sales due to buyers having more confidence in the Spanish economy leading to a gradual increase in house prices.