The 2018 has ended with a very positive balance in the real estate market, with very good numbers in terms of sales and mortgages, as well as more expensive prices for sale and rental. In fact, many have returned to talk about another possible housing bubble as there was in our country more than ten years ago, but analysts agree that this error will not be committed again because 2018 has been the best year for the sector after the recession. Although, the tendency is for prices to continue rising, this time they will do so in a much more moderate way.
Anyway, when we talk about the rise prices, we must bear in mind that this increase is not the same for all the provinces of Spain. Is occurring especially in the main economic, tourist and demographic centres, such as Madrid and Catalonia, as well as the east zone and the islands. In the same way, in the most central districts is where the price increase concentrates most.
In general, we can affirm that the market evolution will face several important issues this year, such as:
1. The decline in the growth of the Spanish economy with which consumers will lose confidence to invest.
2. The involvement in the sector of the Royal Decree of urgent measures on housing which was approved last December 14 by the Council of Ministers.
3. The impact that the new Mortgage Law, which is expected to be approved in March, will have.
4. The difficulty that young people face to access a home.
5. The rise in costs for construction, which fortunately will be the same for all communities.
If we talk about buying and selling, the 2018 has been the fourth consecutive year with growth transactions and it is expected that, by 2019, the trend will be the same. In fact, experts expect that will be more operations than last year, although they will not reach the highs of 2006 or 2007.
The demand for second-hand house continues to represent a high percentage for buyers (more than 80%), with the revival of real estate developments and the increase in number of licenses granted a couple of years ago and whose construction is estimated to be completed by 2019, the sales of new housing will increase, estimating a forecast of approximately 500.000 homes, between new houses and second-hand houses for this year.
Regarding the rent, it notices a slowdown prices and we can see that, in areas such as Madrid and Barcelona, has reached a point where prices have reached their maximum and begin to register the first ' falls' since the end of the year. The problem has been that prices have risen at a faster rate than the purchasing power of Spaniards which situation couldn’t be sustained for a long time and this with the tourist rental restrictions that have been announced in the modification of the Law of urban leases, is causing the decrease of rental price.
As we pointed before, another determining factor to know if this year will be favourable for the purchase of a house is the mortgage. The approval of the new Mortgage Law that in many aspects will be positive for the mortgaged, it will also make us face some uncertainties, especially in the possible increase in these and the more than likely rise in the Euribor, which, according to the experts, can achieve positive values. In view of this issue, variable interest mortgages will be affected. In any case, we will have to wait to see the final text and what will happen with the mortgages.
With this outlook and for this year, the market will continue showing signs of recovery and the real estate sector will continue to expand, although as we said, at a much more moderate pace than in the years of the real estate boom. First, by the forecasts of both international organizations and our own Government, which point out that growth will be weak. In addition, new market rules will also influence the pending legislation and new forms of financing. Also, this recovery will be more reduced because the situation of buyers is complicated: with less purchasing power, with labour uncertainty and the lack of possibility of savings for families that prevent access to housing especially for young people.
The experts talk about moderation and not stagnation. The residential market will continue to grow at a good pace, and this translates to the activity will continue to grow according to the values that have been established again after the recession that was experienced in Spain more than a decade ago. Despite the challenges facing the real estate and mortgage sector, the ideal is for the market to begin to adjust to the current situation, so that both families and young people can consider buying a house, improving conditions of access to housing, along with an urban management plan that allows the development of new developments, so that there is more supply available and in this way, avoid the stagnation that exists in many cities where it is not built for lack of land. Regarding both economic and political factors, the ideal is that consumer’s confidence should recover that the market is not harmed. The real estate market continuing advance is a clear sign that the recession is falling behind. If we add the new legislations, we will have good options so that in 2019 we can consider to renting or buy a new home according to our necessities.