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News: WHY ARE SPANISH HOUSE PRICES RISING NOW?

28 Mar 2017 Back
WHY ARE SPANISH HOUSE PRICES RISING NOW?

Gonzalo Bernardos - the university professor and real estate expert - has recently been explaining just why Spanish house prices are rising at the moment. As Senor Bernardos pointed out, the Spanish housing market is definitely growing again after years of decline, with prices up over 6% and sales up 14% over 12 months to the end of the second quarter.

Bernardos carefully explained the current factors which are pushing up house prices, whilst giving an assurance that Spain is nowhere near another housing bubble; as all the key market variables like Sales, Prices, Newbuild Starts and housing affordability are still a long way from the levels reached in 2006 and 2007.

Prime property in the best areas could appreciate by as much as 50% by 2020!

In fact, homes are relatively cheap. In real terms (after inflation) the majority of Spanish homes now cost half of what they did in 2007, and are roughly back to what they were worth in 2002, before the boom got going. Bernardos says Spanish property is now representing 'a magnificent opportunity' for a solid profit - as it appreciates in price. He forecasts that Spanish house prices will rise by a further 12% in 2017.

This takes into account the fact that the banks are willing to lend more mortgages, because banks today are 'awash with liquidity' and struggling to earn good margins on lending. They have to make up for thin margins with higher lending volumes. Mortgage loans are less risky than other types of credit, and help 'lock in' clients to cross sell other financial products. That explains why new mortgage lending rose 28.5% in July last year.



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