The consulting firm Forcadell, together with the University of Barcelona, submitted this morning in Barcelona in an exclusive event for the main media the conclusions of the “Real Estate 2017 Report: Current Review and Forecast”.
The review of key aspects of the real estate snapshot was given by 2 outstanding speakers: Gustavo de Lio, Director of Forcadell’s National and International Investment Department, and Dr. Gonzalo Bernardos, tenured professor of Economy in the University of Barcelona (UB) and Director of the Real Estate Management and Consultancy Master of the UB.
De Lio, in the first place, analyzed the evolution and forecast of the investment market in Spain, with his presentation “Profitability and security are back in a different market.“ During his intervention he stated “National and international real estate investors continue increasing their transactions and interest in Barcelona and Mardrid amongst the global map, for their rising prices and security. This trend will continue at least until 2020”. De Lio added “The 22@ sector in Barcelona is the only urban area with a large stock of developable land to build for sustainable offices of new construction, with a large surface, which are competitive in Europe. This attracts new national and international office headquarters, and therefore, investors. Another success factor for the city.”
Next, Dr. Bernardos examined the international context, focusing in the Brexit consequences as well as the main repercussions of Trump’s economic program. Regarding Spain, he looked into the reasons why the Spanish economy is in an expansive phase; if renting is the new paradigm of the residential market; which are the main conclusions of the Plan Estatal de Vivienda 2018-2021 (Government Subsidy 2018-2020 plan) and finally, he reviewed the evolution and main opportunities in the tertiary sector (industrial, office and retail).
With regard to the international context and its repercussion in the real estate sector, Bernardos pointed out that “Trump’s success in increasing the economic growth in the US without a high inflation rate would result in a positive outcome for the spanish residential sector. If that would happen, macroeconomic conditions would be ideal to establish a long period of expansion in the Spanish residential market.”
Analyzing the housing market in further detail, Bernardos highlighted that “the growth of the spanish economy in the coming years will a reflect a decrease in unemployment and an improvement in quality of life, which will in turn make the country more attractive as a destination for economical immigration flows, allowing for a more dynamic population and the creation of households, generating an additional demand of homes”.
Dr. Bernardos has emphasized that regarding rental evolution ”there will not be a housing rental bubble”. Prices will continue rising the next year, although increasingly less. In 2017, the rise in the new contracts in Barcelona will be of approximately 8%. Bernardos also added that “Tourists apartments are not the major culprits for the increase in the rental prices”.
Regarding the Government Subsidy plan, Dr. Bernardos highlighted that “In 2017, home buyers’ market in Spain will see a large expansion. The growth of sales and transactions will rely largely upon the mortgage loans offered by banks”. Regarding housing sale prices, “These will slow down considerably in Barcelona with the increase in the interest rates from the ECB. Currently, it is more profitable to buy than to rent, and the prices for homes to sale will increase in almost 20%”
Conclusively, and about the evolution of the housing market in Spain, Bernardos underlined that “There is an overall market reactivation. In 2017 there will be a 8% increase, as long as the net domestic credit offered by financial entities is the same as that of previous years, but it will only see 5% increase if this credit figure registers a 13% rise.”
When he referred to buying opportunities, he stated that “the main opportunities will be found in the periphery relatively close to Barcelona: Viladecans, Vilanova, Sabadell, Mataró, Molins de Rei, etc. International investors are beginning to leave the Barcelona market. Soon there will be more sellers than buyers.”
About the tertiary sector, Dr. Bernardos confirmed “the main opportunities are found buying a warehouse in the periphery of Barcelona, an empty premise in a good neighbourhood street or in an office building with an occupancy rate of less than 60%.” He also stated that “prices for offices, commercial premises and warehouses will continue to increase due to the economic growth of the coming years”.
Presentation Conference for the Forcadell-UB Report 2017
The consulting firm Forcadell will be hosting tomorrow their traditional annual conference to submit the conclusions of the Forcadell-UB 2017 Report in the Auditorium AXA. The meeting gathers more than 200 participants every year, among clients, professionals and outstanding experts in the sector.
The publishing of this real estate market report is the outcome of the cooperation of both expert entities in real estate. This report is the 3rd of the new cooperation period resumed in 2015 and adds up to the past 10 editions published the previous years.