Good forecasts for the Spanish property market in 2018

The Spanish property market closed 2017 with very good figures. Higher profitability, more mortgages, increased sales and new construction are some of the improvements that have occurred in the sector over the past year and, as expected, the forecasts for 2018 will be no different.

New property sales are growing and financial institutions are improving mortgage conditions. In addition, interest rates continue to fall and therefore benefit borrowers. Property sales in Spain increased by 16.9% in 2017 compared to the previous year, exceeding 472,000 transactions. The market finally contracted at the end of this year and finally did not break the barrier of half a million homes, as predicted a few months ago, but it is still the highest figure since 2008.

Already in 2018, some forecasts say that 560,000 homes will be sold, so the market will increase by 18.3%. Other forecasts are more cautious: “The total number of transactions in 2018 will grow by 9.7%. The growth will be hampered by the situation in Catalonia, which will develop below its potential,” says José Luis Suárez, professor at IESE Business School.

Experts say: Private demand is back. In addition, the profile of the investor who puts his savings into buying a rental apartment, whether tourist or traditional, will remain very relevant, while maintaining high returns. According to the Bank of Spain, the long season is 10.9% per annum (including rent and revaluation of housing).

New housing will become more popular in 2018. The year closed with about 85,000 new properties, and in 2018 it will reach 120,000 units.

But the main thing for future buyers is prices. In 2018, real estate will become more expensive. But, fortunately, improvements in mortgage conditions will support the buyer. One example is the new mortgage law, which, in particular, indicates that the number of fixed-rate mortgages will increase thanks to the funds of the new law.