You will remember and I you don’t I am here to refresh your mind that as long ago as April of this year I wrote an article called “The price of housing is soaring in Barcelona and Madrid”. In this article I did warn of the next property rise especially on the large cities of Barcelona and Madrid a prelude for the rest of Spain to follow.
In that article according to Servihabitat one of the main Spanish portals for selling and buying property in Spain expected average increase in house prices of up to 6.3% in 2016.
We also examined that it took about 10.5 months as an average to sale a property in Spain.
Well, all indicate that property recovery is here to stay.
The Spanish Association of Value Analysis (AEV) has analysed, from valuations data from its partners, confirms the evolution of the situation in residential housing over the past two quarters and the resurgence of flats under construction and rehabilitation and the increase in housing mortgage valuations.
During the first half of the year, the number of assessments for mortgage purpose aimed at residential buildings under construction or rehabilitation has increased by 53% in number (reaching a total of 5,373 buildings) and 51% in value (4,277,000 euros) compared with the equivalent figures for the same period of 2015. In particular, it is significant the growth rate of mortgage valuations for buildings made on second homes: exactly 205% in number and 74% in value.
Increases in number and in amount.
Although valuations of residential buildings recently built, still indicates that few housing started in 2013 and 2014, not showing a similar dynamism, significant increases are seen in mortgage valuations of individual houses (mostly second hand), which in this semester reached more than 173,000 (31,000 million of Euros in bold figures) with increases of 17% in number and 19% in amount. In addition, when comparing the first and second quarter, we see that all these figures experienced significant acceleration in the second quarter. Thus, mortgage appraisals for residential buildings under construction or rehabilitation increased by 33% in this quarter (22% in value), the buildings completed 25% (40% in value) and individual housing by 14% both in number and value.
In the words of the Secretary of AEV, José Manuel Gómez de Miguel, "the different types of residential mortgage valuations, which largely constitute a leading indicator of future mortgages indicator and, therefore, future transactions, maintain a positive behaviour both in the scope of supply, through valuations of buildings under construction or recently completed, and the demand side, well represented in the valuations of individual houses to the extent that the residential market is essential in the assessment of the situation of the sectors of construction and real estate, the figures outlined represent an essential reviving to sustain the growth of the Spanish GDP sector and even induce some hope of effectively improving the financial situation of families."
So it seems we have here the indications for a revival in the construction industry.