House prices set to rise 3% in 2017, although not in a uniform way, according to ST Sociedad de Tasación

House prices (new and used) will increase by 3% on average in 2017, estimates ST Sociedad de Tasación.

However, this increase will not be uniform and will be greater in the large cities, especially Madrid and Barcelona “which continue to follow the engines of price recovery in the residential market”, as explained by Juan Fernández-Aceytuno, General Director of this Valuation company.

Fernández-Aceytuno pointed out that “the perception of market recovery is consolidating, albeit still far from speed of growth necessary for a country such as Spain.

Regarding 2016, ST Sociedad de Tasación fix at 3.3% the average annual increase in the price of a new house, continuing the upward trend which began in 2015, although more moderately in most cases, except in Madrid and Barcelona.

Fernández-Aceytuno emphasised that “this new real estate cycle is catalysed by rents, not by prices”. He states that rentals, “which are clearly increasing”, are putting pressure on house prices in big cities such as Madrid and Barcelona, where, as well as these increases, can be seen a certain ‘warming up’ of the rental market, which has also benefitted specifically from the holiday home boom. Faced with this market dynamic, more specialisation can be foreseen on the part of the SOCIMI and more specifically those specialising in rentals, as has happened in countries where the REITs (similar to the SOCIMI) have a fundamental role in residential letting.