2017 and the consolidation of the real estate sector

The year just ended has been one of consolidation regarding the recovery of the real estate sector. Real estate investment in 2016 came to approximately 13,900 million euros in our country, according to figures from our members, a growth of 8% with respect to 2015 and 45% with respect to 2014.

Transactions in non-residential assets (offices, commercial property, logistics and hotels) carried out through the year are of greater relevance, given that they rose to 8,757 million euros. This is a strong indicator that we are continuing on a path of growth which began in 2015, when this kind of investment reached a record total of almost 9,500 million. For their part, the socimis, whose business transactions represent 10% of Spain’s total, have also concentrated on consolidating their assets by means of renovation and an increase in occupancy levels.

To this can be added the increase in house prices throughout the year. Thus, the price of newly constructed property experienced an increase of 3.3%, especially in Madrid and Barcelona, where the increases came to 2.8% and 3.8%, respectively. On the other hand, the buying and selling of used houses also registered in 2016 a significant rise compared to its lowest point in 2011. House purchases in 2016 totalled 400,000.

There is no doubt that factors such as the recovery of confidence on the part of foreign investors, improvement in the macroeconomic panorama, in which low interest rates have played an important part, and the rise in consumerism have contributed to this consolidation in a decisive manner.

With an economic backdrop similar to 2016, and greater political stability, everything points to the fact that 2017 will see a continuation of growth in the real estate sector. In fact, predictions indicate that house prices will experience a moderate increase of approximately 5% and apartment sales will rise by 10%. Larger transactions, for their part, will continue at a similar volume to that observed during the past three years in the offices, logistics, hotels and retail sectors

Even so, it is important to highlight the challenges which the real estate sector will face over the next few months. The most pressing is the completion of a sustainable group of green assets, either for renovation or new construction. The ever increasing concentration of the population in conurbations, and energy dependence in Spain permit no other way out except to invest in ‘green’ properties, which are efficient, and offer greater comfort to tenants. In this sense, it is essential that public administrations consider sustainability and efficiency as absolute priority on their agenda and apply them in their own management models, which would contribute a greater sensitisation on the part of businesses and citizens towards the necessity for this transition to ‘green’ to become a reality.