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Spain eyes 2015 as year for real estate sector recovery

Xinhua, April 10, 2015 Adjust font size:

2015 could be the year for Spain's real estate sector recovery, Spain's economics newspaper Expansion reported on Friday.

According to the newspaper, there are several factors that presage a recovery for the real estate sector in the country, which had been seriously affected by a property crash that triggered the financial crisis.

Seven years of recession has left Spain's real estate sector with loads of empty houses. Housing prices sharply fell as well as mortgages, on the grounds that Spanish society, facing a high unemployment rate, was not able to afford those prices anymore.

According to one of the largest independent Real Estate Valuation companies in Spain, Sociedad de Tasacion, housing prices increased by 3 percent in the first quarter this year in Spain, with eight Spanish regions seeing rises.

"It is recovering faster than expected," Expansion says, highlighting that prices are not only rising in Spain's main cities, Madrid and Barcelona, but in other places as well.

Housing prices increased by 4.8 percent in Madrid and by 0.9 percent in Barcelona, while in the Balearic Islands and Valencia, famous tourist destinations, they rose by 6.5 percent and by 5.7 percent respectively.

"This indicates a recovery on tourism demand," Expansion points out, adding that tourism demand had played a key role in housing sales 10 years ago in the country.

Housing sales in Spain increased by 15.5 percent in February year-on-year in 14 out of 17 Spanish regions according to Spain's Statistical Office, increasing by more than 20 percent in some of them, such as Madrid, Catalonia and the Balearic Islands.

The newspaper Expansion expects the recovery of the sector will consolidate this year thanks to the depreciation of the euro, a higher profitability of renting and an increase of job opportunities and activity within the sector.

However, it warns that in many Spanish regions housing prices are still falling and loads of houses, around 600,000 units, remain unsold. There is still a long way to go, the newspaper concludes. Endit