A leading property valuation company in Spain, Tinsa, is forecasting a rise in Spanish property prices for 2019. The firm believes there may be a rise of between 5-7% as experts take into the account the growing demand for property and the falling levels of unemployment. As a result of the recovery of the economy, experts believe this will lead to an increase in market prices.
The prediction comes after examining data from previous years as well as studying the number of issued building licences and a list of mortgage and sales figures. From the results, Tinsa predicts sales of residential properties in Spain will increase from 500,000 to between 625,000 and 650,000. Furthermore, Tinsa believes that the number of mortgage applications granted will also rise by around 15%.
As well as property sales, it is predicted that the number of building licences awarded will grow in a similar fashion and will reach 100,000 to 125,000 in 2019. Despite the growth, experts are quelling concerns about another boom/bust cycle. While sale prices are increasing, they are still 36% lower than the level reached before the financial crisis in 2006 and 2007.
Will There Be Price Rises Across All Of Spain?
While Tinsa predicts a rise of 5-7%, the firm predicts regional differences to show. For example, the larger cities are likely to see significant rises in property prices. However, the coastal regions and less populated areas may not see such a rise. So far, these areas have seen minimal rises, yet with a strengthening market, the rise in property prices is more likely to spread across more regions.
The prediction in a rise in property prices comes at the same time as a forecast for a slowdown in economic growth in 2019. Spain saw economic growth of 2.6% in 2018. However, this has been downplayed to 2.2% in 2019. If unemployment continues to fall, then this may stimulate more market demand, which could have an effect on property prices.
Of course, with market demand, it is likely to create an increase in interest rates, which can make it harder for younger people in Spain to get their feet on the property ladder. Furthermore, there may be another downward revision on the economic forecast, which could be a concern for investors in Spain.
November 12, 2018