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Real estate market, forecasts for 2017

Recent reports published in Spain by banks and the INE state that the real estate market will continue its upward trend during the next year, and housing is expected to increase its price by 3.5%.

The year that we close soon may be considered as the year of the definitive consolidation of the real estate market thanks to three main factors:

  • The growth of job creation, by 2017 is expected to reduce the unemployment rate in Spain by approximately 19%.
  • The expansionary monetary policy has led to an increase in the supply of credit at low interest rates.
  • The boom in foreign demand has led to an increase in residential transactions.

The growth in the demand for housing has led to a corresponding increase in prices of the same, which has been maintained over time, accumulating ten consecutive quarters of year-on-year growth. Balearics is one of the Spanish communities that lead the ranking of growth with a price recovery of 14%. The positive trend of all these variables will contribute to an increase in the price of housing for 2017 from 3.5%.

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The purchase of homes by foreigners has experienced a 13.5% increase in Spain during 2016 and foreign tourism figures point to a new high, so it is expected that foreign demand will boost housing sales again In Spain in the next year. The recently published reports show a year-on-year growth of foreign purchases of 20.8%, with the English leading the ranking of buyers. The demand is aimed at second-hand housing, which will contribute to the increase in the sale price in 2017. It is expected that by the end of next year, will be sold in Spain around 475,000 homes, which will mean an increase at around 6.5% per year.

Another fundamental aspect that can directly influence the evolution and forecast of the real estate market in 2017 is the continuity of low interest rates within the monetary policy that will continue to be applied in the euro area.

Spanish PIB growth for 2017 stands at 2.3%, although is expected that real estate market, yet consolidated, could face this moderation in the right way and may become an important force for the coming years as a perfect moment for investment. The positive evolution of the real estate sector has led to consider the profitability of investing in the real estate sector, buying this type of property versus other alternative investments. The profitability obtained by renting houses stands out significantly compared to other investment opportunities and may lead an investor to buy a property for rent.

If you’re thinking to buy a property in Mallorca this is the moment. We, at Vogue Properties, have the most complete property listings and will find the perfect villa (http://www.vogueproperties.com/en/properties/type/326-Villa/) or country house for sale to match all individual visions and requirements. We also offer a wide range of properties at amazing prices in Mallorca.

 

 

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