Spain: the real estate market regains its pre-crisis level of transactions
23 February 2018
The Spanish real estate market, hit by the explosion of a violent bubble from 2008, found in 2017 its volume of pre-crisis transactions, but prices remain lower than those observed during the bubble, according to figures. officials.
Nearly 465,000 real estate sales / purchases transactions were recorded in 2017, "the highest annual figure since 2008," says a report from the National Property Registry. Compared to 2016, the increase is nearly 15%.
The Spanish housing boom that began in the late 1990s triggered a price spike that was disconnected from the real value of the market, which peaked in 2007. The bubble then exploded from 2008, as a result of the global financial crisis which has caused the slowdown of the Spanish economy, preventing many borrowers, individuals as promoters, to repay their loans.
Prices, which had collapsed before starting again in 2014, rose sharply in 2017, averaging 7.6% over the country as a whole compared to the previous year.
However, they remain 21% below the level reached in 2007 at the peak of the bubble, says the Register.
The property recovery is fueled by strong economic growth in Spain, which reached 3.1% in 2017, its third consecutive year above the 3% mark.
"Low interest rates and declining unemployment are easing access to home ownership," said rating agency Moody's in a report released on Monday.
The level of activity, however, remains more reasonable than the excesses of the 2000s. "Although sales will probably exceed 500,000 properties in 2018 for the first time in ten years, it remains far from the level of nearly a million sales per year before 2007, "says Moody's.
Construction activity, although rebooting, "only reaches 40% of its pre-crisis levels in 2007," says Moody's.
According to the register, about 13% of real estate purchases were made by foreigners in 2017, British and French in mind, a stable figure for four years. In some popular seaside areas, the proportion is higher, as in the Balearic Islands (35%), Canary Islands (29%) or near Valencia (27%).