What can we ex­pect from the real es­tate mar­ket in 2019?

Costa Blanca News (North Edition) - - FEATURE - Ask the Ar­chi­tect By Juan Pacheco

Analysing com­ments from dif­fer­ent ex­perts on Span­ish real es­tate, 2019 ap­pears as the year of re­cu­per­a­tion with price in­creases of be­tween 4% and 6%.

The end of this year has come and gone and it is time to ad­dress the fore­casts and tasks that the mar­ket should un­der­take in the next 12 months. The ma­jor­ity of prop­erty de­vel­op­ers and ex­perts con­sulted pre­dict that there will be a con­sis­tency in the mar­ket, but also a mod­er­a­tion of price sta­bil­i­sa­tion.

2019. This is the year

2018 was the best year for the hous­ing mar­ket since the cri­sis broke out and we ex­pect that trend to con­tinue in 2019, although in more mod­er­ate terms.

There are fig­ures from BBVA Re­search, which il­lus­trate that it is in­deed a good mo­ment.

The start of the re­cov­ery of the real es­tate sec­tor was some­thing dif­fer­ent and, on this oc­ca­sion, that re­cov­ery has been sup­ported by a buoy­ant econ­omy, when the norm was the re­verse: that the con­struc­tion sec­tor ini­ti­ated the first ad­vances in the econ­omy after a pe­riod of con­trac­tion of in­dus­try.

Dur­ing the last year the real es­tate sec­tor grew in all ar­eas and de­mand rose by around 10% over the pre­vi­ous year, which has led to the sale of 590,000 homes.

But, in ad­di­tion to these good fig­ures for the year that has con­cluded and the good prospects for 2019, other real es­tate agents un­der­stand that 2019 will be the year of the ma­tu­rity of a fun­da­men­tal sec­tor for the na­tional econ­omy.

Spain has reached a point of ma­tu­rity in which we do not ex­pect large in­creases in ac­tiv­ity, but it does con­sol­i­date or slightly im­prove the fig­ures in the new con­struc­tion pro­mo­tion busi­ness.

This new cy­cle is marked by a pro­tag­o­nist wh0, in ear­lier times, was not so present: the client. He will con­tinue to be the axis along­side in­no­va­tion and sus­tain­abil­ity, on which dif­fer­ent pro­mot­ers are al­ready work­ing on, to cover even more the needs of fu­ture own­ers. There has been in­creas­ingly new of­fer of green, modern, smart and fully adapted prop­er­ties to the new de­mands of the client.

What about prices?

One of the main in­di­ca­tors to mea­sure the health of the real es­tate sec­tor is the price of houses. By 2019, ac­cord­ing to the ex­perts con­sulted, this pa­ram­e­ter will re­main up­ward but in a more mod­er­ate way.

Re­gard­ing sec­ond-hand apart­ments, ac­cord­ing to the Real Es­tate In­dex of Fo­to­casa, 2018 closed with an av­er­age an­nual price in­crease of 7.8%, the high­est level since 2006.

"The be­hav­iour of prices re­mains very un­even and in 2018 the dif­fer­ences be­tween re­gions have been fur­ther marked, with Madrid, Cataluña and the is­lands lead­ing the in­creases with year-on-year rises rang­ing be­tween 10% in Cataluña and 19.5% in Madrid. These in­creases con­trast with the more mod­er­ate be­hav­iour of the rest of the coun­try and with the red num­bers still reg­is­tered in some re­gions.

The Di­rec­tor of Stud­ies of Fo­to­casa high­lights, in ad­di­tion, that ‘although these per­cent­age rises are rem­i­nis­cent of the years of the boom, the av­er­age price of sec­ond-hand hous­ing is still 36.7% be­low the max­i­mum of those years’. This to­gether with the checks on fi­nanc­ing and the sta­bil­i­sa­tion of the mar­ket, dis­tances the pos­si­bil­ity of a ‘real es­tate bub­ble’.

Look­ing ahead to 2019, Fo­to­casa ar­gues that this sec­tor will con­tinue to grow at a good pace and prices will con­tinue their up­ward trend although they will sta­bilise.

All the fore­casts in­di­cate in­creases be­tween 4% and 6%

Car­los Zamora, res­i­den­tial di­rec­tor of Knight Frank, points out that ‘prices are around 1,800 eu­ros per square me­ter in new con­struc­tion and about 1,600 eu­ros in sec­ond hand, and by 2019 we ex­pect the growth ex­pe­ri­enced in some cities such as Madrid and Barcelona to soften, while the re­cov­ery in other mar­kets is con­sol­i­dated’.

Tinsa pre­dicts that there will be a ‘grad­ual sta­bil­i­sa­tion in Madrid, Barcelona and other cities with no­table re­cent in­creases, and con­ti­nu­ity of in­crease in their ur­ban ar­eas’.

“In the rest of the re­gions there will be pos­si­ble mod­er­ate in­creases," ex­plains Rafael Gil, di­rec­tor of the Tinsa Stud­ies Ser­vice.

From Aedas Homes, its CEO, David Mar­tinez, says: "We ex­pect and want healthy in­creases around 3%, 4% and 5% na­tion­ally."

Ob­vi­ously, and due to the high het­ero­gene­ity of the mar­ket, there will be lo­ca­tions where they in­crease at a faster rate and oth­ers in which the in­creases will be slower.

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