The research division of Spanish bank BBVA forecasts that home sales this year will be 10% higher than last year, and break through the 500,000 barrier for the first time since the boom turned to bust.
BBVA have upped their home sales forecast by 3% since their last report on the Spanish property market because of the improving job market at home, continued low interest rates, and the improving EU economy, they explain.
The Spanish property market has recovered well so far this year, with sales up 14.5% to 213,074 transactions in the first five months of the year, promising another year of growth. This will be the fourth consecutive year of growth since the market touched bottom in 2013 with just 300,000 homes sold that year.
BBVA forecast that house prices will rise 3% on average this year to 1,570 €/m2, bringing them back to where they were 13 years ago in 2004. Commentators point out that the increase won’t be uniform, with prices rising faster in some hot local markets, whilst continuing to fall in other areas.
BBVA also forecast that new home building will continue to recover this year, with 80,000 planning approvals, up 20% on last year, and that residential investment will drive almost 10% of Spain’s economic growth in 2017.
BBVA have scoffed at suggestions of another house price bubble inflating. “During the crisis house prices fell 35%, and in the last three years they have increased by 5%,” says an economist at BBVA Research, quoted in the Spanish press. “It’s going too far to say there is a new bubble. Moderate growth is what there is.”