New Build Villas Costa Blanca
BBVA highlights the good performance of the real estate market in Spain in 2017
BBVA Research points out that the real estate sector rose sharply in the first quarter of 2017, with a positive performance in sales that accelerated price growth. However, this bank points out that it showed a high geographical heterogeneity in the prices.
This is reflected in the latest Real Estate Observatory of Spain, prepared by BBVA Research, the financial institution's study service, which shows a positive evolution of housing sales, as according to data from the Center for Statistical Information of Notaries ( CIEN), in the month of March sold 48,695 homes.
This meant that, after adjusting for the series of seasonal variations and calendar effects, sales stagnation compared to the previous month, but in year-on-year terms residential sales increased by 19.5%. Thus, up to March, there was a 16.2% year-on-year increase in sales, above the 2016 average, thanks in large part to the fact that the main determinants of demand maintained the positive tone of the first measures of the year .
In this sense, he emphasizes that employment continues to show a positive evolution, as Social Security affiliates in April and May grew at a monthly average of 0.4%, above the monthly average of the first quarter (+0.3 %). In addition, household confidence continued to improve in May.
After a good April survey, in the second quarter of the year, households have reinforced optimism regarding the economy in the next twelve months, notes BBVA Research, adding that all this occurs in a context in which Financial conditions remain propitious for household indebtedness, as the new 12-month Euribor decline, which in May stood at -0.127%.
Heterogeneity in the rebound of prices
On the other hand, housing price growth accelerated in the first quarter of 2017. According to the Ministry of Development, the average price of housing in the first quarter was 1,525.8 euros per square meter, 0.7% More quarterly, once the seasonality of the quarter (CVEC) was corrected, 0.2 percentage points more than in the fourth quarter of 2016.
On the other hand, in the first quarter the year-on-year performance showed an acceleration of the growth rate to 2.2%, 0.7 percentage points more than in the previous quarter. In any case, BBVA Research notes that the evolution of the price of housing continues to show a high geographical heterogeneity between January and March. After correcting the seasonal series of the quarter, there were spikes in nine autonomous communities (Andalusia, Canaries, Cantabria, Catalonia, Valencia, Madrid, Murcia, Navarre and Basque Country), highlighting the promotions registered in Cantabria, Navarra and País Vasco, three of the regions that had shown less dynamism in the previous quarters.
In contrast, in the rest of autonomous communities the average price of housing fell in the first quarter compared to the previous quarter, with Aragon and La Rioja, with inter-quarterly declines of around 2%.
Construction is coming back.
Finally, the first quarter of 2017 ended with a new growth in construction activity. The practical stagnation of new housing visas for March (-1%) did not prevent the first tranche of the year from ending with a year-on-year increase of 18.7% in visas. Thus, in the first three months of the year approve the initiation of almost 20,000 homes, 3,141 more than in the same quarter of 2016.
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