Spanish housing market continues to grow stronger
# Spain Housing Market
Spanish house prices rose by 6.49% in 2018 from a year earlier (5.25% inflation-adjusted) to €1,493 per square metre (sq. m) – the biggest annual rise since 2006, according to TINSA. Quarter-on-quarter, nationwide house prices increased 1.7% during the latest quarter (1.34% inflation-adjusted)
After eight long years of house price declines, Spain's housing market finally returned to growth in Q1 2016. Spanish house prices had fallen by a total of 41.9% (46.8% inflation-adjusted) from Q4 2007 to Q3 2015, based on figures from TINSA. There were 31 consecutive quarters of y-o-y declines.
Demand continues to rise strongly. In the first eleven months of 2018, home sales in Spain surged 10.6% to 481,220 units from the same period last year, after annual rises of 15.4% in 2017, 14% in 2016 and 11.5% in 2015, according to the Instituto Nacional de Estadistica (INE). The continued increase in transactions was mainly driven by foreigners buying homes on the coast and in cities like Barcelona and on the Costa del Sol, one of the country's most popular areas with overseas purchasers. Most foreign homebuyers are Britons, French, Germans, Belgians, Italians and Swedes.
Construction activity is picking up again. During the first seven months of 2018, the number and area of residential building permits increased by 7.7% and 9.5%, respectively.
Foreclosures fell by 11.8% during the first three quarters of 2018 from the same period a year earlier to just 18,721 dwellings, based on figures from the INE. Foreclosures for existing dwellings dropped 16.1% but increased 10.2% for new dwellings.
The outlook for Spain's housing market is upbeat, with sales expected to increase from about 500,000 units last year to between 625,000 and 650,000 in 2019, according to TINSA. Nationwide house prices are projected to rise by between 5% and 7% this year.
The Spanish economy grew by about 2.6% in 2018, after growth rates of 3% in 2017, 3.2% in 2016, 3.6% in 2015, and 1.4% in 2014. The European Commission expects Spain's economy to expand by 2.2% this year and by another 2% in 2020.
Foreigners have a right to buy and resell all kinds of property - residential, commercial or land, with no limits.
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