Spanish house prices stay flat, but industry upbeat

Calpe, Costa Blanca Photo: Lugaresparavisitar

Spanish house prices stayed flat at the beginning of 2016, but the industry remains upbeat about the market’s outlook for the year.

Resale asking prices were an average of 1,597 euros per square metre in January 2016, according to Idealista’s index, just five euros higher than a year earlier. The figures highlight the bottoming of the Spanish housing market, as prices halt their previously dramatic decline, but despite monthly growth of 2.1 per cent, there is little evidence of a rapid rebound in the near future.

Leading industry expert Javier García del Río, though, is optimistic about the market’s prospects for the coming 12 months. The head of Solvia spoke to El Mundo recently, noting that the market is recovering at a varied pace across the country, with some regions reporting stronger growth than others. Indeed, as micro markets are driven by local factors, the overall national average can be a misleading indicator of the health of the country’s real estate.

“We don’t expect nor want an aggressive rise in house prices,” Javier told the newspaper. With 28.6 billion euros of assets under its management, including the real estate portfolio for “bad bank” Sareb, the company is a significant presence in the country’s property industry.

“In Solvia we are convinced that in this 2016 the growth trend in the real estate sector will remain. However, we think that it must be sustainable and gradual in the future. We believe that housing prices will rise slightly,” he continued, adding that the glut of new homes in some areas – and shortage in others – are all set to play their part.

In the Community of Madrid and the Basque Country, the stock of new housing is now less than 1.5 per cent of the total housing stock, he explains. In populated and popular tourist hotspots in the Valencian Province, meanwhile, development activity is climbing.

Rather than house prices, though, Garcia del Rio argues that growth in demand is the most important step in the market’s recovery.

“The percentage of people who think that prices are going to rise is starting to increase, and therefore so are transactions,” he adds.

His comments follow a report from Solvia at the end of last year, which highlight Madrid as marking “the pace of recovery in the sector”.

“It is positioned as the hottest market, showing great promoter activity, especially in the north and northwest of the city and rising prices,” added the report.