Is it finally safe to talk about a new property market cycle in Spain?
The Spanish property market has suffered a deep adjustment since its peak in 2007, but signs of recovery are appearing with increasing frequency all around. Until now, only the most optimistic experts -or those with vested interests- have been talking of a turnaround. But it finally feels fairly safe to say that the worst is over and that a new expansive cycle is beginning.
The most recent data of property transactions and other data such as building activity cannot be seen as anything but good, after such as long period of bad news. The monthly statistic elaborated by notaries compiling property transactions (arguably the most trustworthy reflection of the market) has shown significant rises in recent months, with respect to the same month last year: in January, sales were up by 62.3%, in February, by 39.8%. At the same time, house prices were up by 9.4% and 0.6%, and mortgages by 58% and 35.9%. Simultaneously, the building sector has seen an increase of 23.9% – well above the European average of 5.5% , only surpassed by Slovenia (33.1 %) and Hungary (28.3 %) and light years ahead of Italy, bringing up the rear with -7.9 %.
According to El Pais newspaper, the notaries have interpreted these increases as a clear sign of a market recovery. It appears that investors now believe that the adjustment in prices has run its course, and banks are slowly starting to lend again. Other positive economic data are the decrease in unemployment figures, the growth in the number of tourists, and the general improvement of the Spanish economy.
However, it may well be the case that instead of the fast-paced price increases of past decades we now enter a period of slow growth or even stabilization of the market.