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Despite the recovery seen in all key indicators since 2014, the activity of the Spanish real estate sector is still far from the average levels it had just a decade ago.
The recent economic crisis continues to take its toll on the activity of the Spanish real estate sector. According to a recent simulation carried out by Euroval, this activity, considering various indicators such as the mortgages constituted, the income and expenses of construction, or the transactions carried out, is well below the levels it reached in the years of the boom in residential property.
Thus, taking 2004 as a reference period (value equal to 100), the index for 2016 would be 20 at the national level. At the level of the respective autonomous communities, the differences with respect to the reference year are equally drastic, although they vary considerably between them. In Andalusia, for example, the aforementioned real estate activity index would be 13, the same as for the Valencian Community, but five points below that of Catalonia (18) and six below that of the Community of Madrid (19). The territory where the recovery of this activity has been greatest is the Balearic Islands, with an index for 2016 of 45 and an accumulated 28 points since 2014 alone.
In this sense, the Euroval data draw attention to the fact that “there are no known cases of economic sectors” with a similar weight in the Gross Domestic Product (GDP) of a country, such as real estate had at its peak, “that suffer losses exceeding 80% in less than a decade.”
A key indicator, in Euroval's opinion, that reflects this fall is that of appraisals on homes, which, despite the significant recovery noted in 2016, is still at levels well below those of 2006, less than half: 1,399,200 appraisals in that year compared to 625,000 in 2016. The community with the highest number of appraisals in 2016 was Andalusia, with 129,200, followed by Catalonia, with 120,400, the Community of Madrid, 85,300, and the Valencian Community, 76,700.
Another reference indicator that explains this situation is the supply of housing, which also shows a parallel trend to appraisals during this period. In addition, in this case, the conclusions highlight the “anomalous behavior” of housing demand in Spain, since “despite the significant price adjustment, weak demand is observed due to the uncertainty of the economy and employment. The persistence of this fact leads to a significant and widespread decline in the supply of new housing.”
In this way, while until 2010 the annual growth rates of the housing stock in our country did so at rates of 5%, for the entire period 2006-2016 this growth has been only 8.9%. The data from the appraisal company Euroval also indicate that this weak growth has been concentrated, above all, in primary residences, which have increased from 15,0429,540 units in 2004 to 18,968,955 last year. Euroval's analyses also confirm that the fall in the number of building permits for new construction since 2004 has been 90.8%. By community, this decline ranges between 82 and 93%.
The last indicator we analyze is the evolution of homes started and completed in our country, to conclude that the comparison of both magnitudes reveals the strong contrast between the pre-crisis situation and the current one. If in 2008 the homes completed were around 536,600, almost double the number of those started that year, in 2016 these figures were, respectively, 50,351 and 34,351 units. It is to be assumed that the flow of housing entries into the market will tend to increase at least in the next two years.
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www.eleconomista.es
www.idealista.com
www.elinmobiliariomesames.com
www.lasprovincias.es
www.observatorioinmobiliario.es
www.ejeprime.com
www.elmundo.es
www.inmodiario.com
www.europapress.es
www.elperiodico.com
www.economia.elpais.com
www.realestatepress.es
www.laopiniondemurcia.es
