Housing prices will begin to rise during 2018

CBRE, a real estate consultancy, predicts a general increase in housing prices, with up to a 10% 1Q3Q increase in the case of Madrid, Valencia, Malaga and the Balearic Islands. In this sense, it is good news for the Spanish real estate market, since after falling in demand a few years ago, it is now rising significantly.

After Spain went through a large decline in demand for home purchases, the market is currently recovering thanks to the prices that were a consequence of the decline. Furthermore, the future prospects are very favorable, so in 2018 the average price of homes is expected to grow to 6% nationwide.

Samuel Población, national director of Residential and Land at CBRE Spain, states that “In large cities like Madrid and Barcelona, we have seen price tensions but they are still at 50% average of the prices of the last ten years.” According to this consultancy, the price of purchasing homes in Madrid will increase between 8 and 10% compared to the previous year.

Although prices are going to rise significantly, the truth is that they are far from the last real estate boom. In this way, although housing prices have been growing nationally since 2014, they are doing so moderately and there are still many years left for them to return to what they were in the past.

Buy to rent

More and more people are deciding to rent instead of buying, taking advantage of an apartment

The growth of that market, many people are looking for homes to buy, to later rent.

Martín, for his part, adds that "The expansion of the rental market is attracting many investors, something that did not happen ten years ago, since they can achieve returns of between 4% and 6% at a national level."

As in the previous case, investment levels in rental homes are still too far from other types of assets. As an example, in the first quarter residential investment only accounted for 3% of all real estate, 244 million compared to the 1,759 million allocated to the purchase of offices. Most people who don't invest aren't because they don't want to or don't have the money, but because there isn't enough of a market yet.