Tinsa forecast 5 to 7 per cent rise in Spanish property values in 2019
Increased demand and falling unemployment lead to higher market prices as the recovery spreads
Leading Spanish property valuation firm Tinsa is forecasting an average rise in the market value of housing in this country of between 5 and 7 per cent in 2019, basing its forecast on the current trends regarding the number of building licences issued and sales and mortgage figures.
Extrapolating from the data of the last couple of years, Tinsa expect the number of residential property sales in Spain to increase next year from its current level of just over half a million to between 625,000 and 650,000, while the number of mortgages granted on property is forecast to rise by around 15 per cent to between 275,000 and 300,000. The upward trend in the number of new properties for which building licences are awarded is also expected to go up by a similar amount to between 100,000 and 125,000, according to the firm.
These significant increases should not lead to fears of another boom and bust cycle, though, as Tinsa point out that sales figures are 36 per cent short of the level reached at the peak of the speculative buying boom in 2006 and 2007.
The firm also recognizes that the average increase in housing prices still conceals a great deal of variation from region to region, town to town and even district to district. Large cities and conurbations tend to show significant rises, while in many coastal and less populated areas the value of residential property has barely risen since bottoming out, but as the market continues to stabilize the recovery is forecast to spread to more areas.
The forecast also takes into account the slight slowdown in economic growth which is forecast for next year in Spain (2.2 per cent in 2019 as opposed to 2.6 per cent this year), although it is likely that unemployment will continue to fall and this will contribute to stimulating more demand in the market.
In general terms the forecast for 2019 is a positive one, then, but there are some factors which create uncertainty. Within Spain these include a probable increase in interest rates on mortgage loans, the difficulties which are faced by young people in climbing onto the first rung in the property market ladder and a possible downward revision of the economic growth forecast, while on a global scale the economic slowdown, falling consumer confidence indices and protectionist trade policies could be causes for concern.
Source: Murcia Today