The price of housing in Spain will rise by 8.6% in the next three years, according to Moody’s
The growing proportion of the young active population and the greater affordability of the houses will boost the price of housing in Spain by 8.6% in the next three years, according to the forecasts of the agency Moody’s, which analyzes the impact of demographic trends on the price of the residential real estate sector in seven large European markets.
In the Spanish case, the risk rating company is betting on an increase of 5.6% in the price of housing in 2018, while in each of the following years up to 2020 this increase will be limited to 1.4% per year .
“Low interest rates, improved economic conditions and a higher proportion of the young active population will support the housing market,” says Greg Davies, an analyst at Moody’s, adding that over the past decade the proportion of young workers has increased. 8%
The agency notes that the current environment of low interest rates and economic recovery that is reducing the still high youth unemployment contributes to the affordability of housing in Spain. However, he points out that wage growth remains low, which prevents some young professionals from buying a home, something that Moody’s hopes will vary in the coming years.
In this regard, the agency recalls that in 2014 about 14% of full-time workers in Spain earned less than 2/3 of the median income, compared to 7% in Italy and 9% in France.
On the other hand, Moody’s stresses that Spain has experienced a decline in the demand for new housing, while much more activity can be seen in the second-hand market, adding that the construction activity currently represents 40% of that recorded in 2007, reflecting, among other factors, sovereign deleveraging, including the banking sector, which has led to a substantial reduction in residential investment.