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The recovery of the residential market will be slow and with controlled price increases

The recovery of the residential market is an expansive, smooth and broad cycle.  Price growth will be at a nominal 3% nominal and the construction industry will not again be, in the short term, one of the driving forces of Spanish economic growth.

These are the main conclusions of the VI Observatorio de la Valoración correspondiente al segundo semestre de 2016, which the Asociación Española de Análisis de Valor (AEV) presents, together with the collaboration of the teacher and person in charge of the Department of Applied Economics, University of Alicante, Paloma Taltavull, and a group of twenty one experts formed by the valuation society members of the association plus other recognised professionals in the area.

 

A cycle ‘expansive, smooth and broad’

According to the report, the optimism with which many analysts began the year in respect the position of the residential real estate market has cooled considerably. 95% of experts consulted support the idea that the Observatorio has maintained for some time: present data suggest that the recovery which began in 2014 will continue, but will be slow and will correspond to an expansive, smooth and broad cycle. Sector expansion and the development of house prices will be contained due to three main factors: excess stock, a significant amount of the same (25%) in the hands of the bank, and alack of demand throughout the territory.

There are also those who believe that if the economic recovery is not undermined, at the end of 2017 prices will show a recovery in proportion to the number of sales. This hesitant growth is generating a degree of calm in the majority of experts at a time of a possible new real estate ‘bubble’, although some point out certain risks in returning to the prime zones of the principle capitals.