Real Estate prices increase more than 3%, so why buy a property now?

The real estate sector has been notable for its strong recovery in the past year, both in the number of homes sold and the average price of real estate. 2017 becomes the perfect time to buy a home, according to the data and opinions that the economic experts and specialists in the subject have made public.
Real Estate prices increase more than 3%, so why buy a property now?
With the arrival of 2017 many will think about new goals for this year. Although the economic news still reminds us that we are not facing a total economic recovery, it is not the same scenario for the real estate sector. If now is the time buy a home, different studies and expert voices point out that 2017 is the perfect year to do so.
According to the latest study by the Bankinter, S.A. a leading financial institution, the Spanish real estate market continues to recover with a rising trend, predicting that residential demand will continue to grow until more than 450,000 homes have been sold, which will mean a 7% more than in 2016.
Meanwhile, figures published by renowned consulting firm Price Waterhouse Coopers, under the name ‘Economic Consensus’ indicate that despite having been almost a year without a stable government and finding ourselves facing a global economy shaken by the departure of United Kingdom from the European Union, the economic prospects of the experts are very good compared to previous years. Thus, experts who have participated in this study have maintained their positive opinion regarding the demand for housing in the coming year. 34.5% of the experts surveyed bet on the growth of the real estate sector while 57.4% believe that it will remain in the same situation, not forgetting that it is a good moment of growth.
2017 is the year of buying a home. The latest data points to an increase in the price of housing, as has been happening in the past months. However, the price does not become excessively high and it is expected that in the coming months it will continue in the same trend. The mortgage interest rates remain at historic lows so it is the perfect time to take advantage of low mortgage prices before they start to rise again. In addition, one of the smartest decisions to save is to get to retirement with a paid home in full.
Figures on the price of housing
The third quarter of the year (July, August and September) closed with a 1.6% increase when compared to this same period in 2015. These figures are from data provided in the last statistics published by the Ministry of Public Works. Thus, the average price of free housing reaches 1,499.7 euros per square meter. This year-on-year figure is to be the sixth consecutive quarter of price hikes, after 26 quarters of declines. The ministry points out that in real terms and in discounting inflation, the price of free housing shows a year-on-year increase of 1.8%.
Data on the same period of time offered by the National Institute of Statistics put the price of housing with a higher increase. The price of free housing would have increased by 4% in the third quarter year-on-year rate, one tenth above the second quarter’s annual rebound (+ 3.9%). This figure would be chained ten consecutive quarters to the rise.
Increase by type of dwelling
The price of houses has positive rates in annual terms since the second quarter of 2014 and has been supported in both the new and second-hand market. The price of new housing rose 7.3% when compared to the third quarter of 2015. It repeats the same trend of the previous quarter, but with a lower point since the second quarter of the year, where the price of new housing increased 8.4%. Thus, if calculated in quarter-on-quarter rate – the third quarter over second quarter of 2016 – the price of this type of real estate increased by 0.8% and with this figure is the third consecutive quarter of quarterly increases.
Meanwhile, the housing used has experienced a quarterly increase of 1%, compared with 1.5% the previous quarter and grew by three tenths in its annual report to reach 3.5% increase.
Increase by communities

Regarding the Autonomous Communities, only nine of them have experienced a growth of the average price of housing: Catalonia, with 4.8%; Madrid, with 4.3%; and the Balearic Islands, with 4.2% being the leaders of this increase. Meanwhile, the communities of La Rioja (5.1%), Cantabria (1.8%), Basque Country (1.8%) and Aragon (1.5%) were the representatives of the largest year-on-year declines.
For its part, data published in early December by the National Statistics Institute, ensure that the price of housing grew in the third quarter in annual rates in all but Asturias. They include cities like Madrid and Barcelona leading advantages at various points on the other. In the community of Madrid, the price of housing increased by 7.8% while in Catalonia the figures were 6.6%. These two are followed by the Balearic Islands, with an increase of 5.4%, followed by Melilla and Ceuta with an increase of 3.9%. The smallest advances occurred in Cantabria and Murcia, in both cases with an increase of 0.7%, and in Castilla y León, of 1.2%.

Reasons for the increase in the average price of housing
Why this increase? Experts and specialists in housing have explained that after the reactivation of the sector in the past 2015, with the year about to end and the data collected, 2016 has been the scenario of a consolidation of a process of market normalization after years of severe crisis.
Bankinter’s 2016 real estate report explains that the Spanish real estate market is consolidating its recovery cycle in the residential sector. In fact, the Bankinter says that the combination of increased demand and a very limited supply in large cities will get a rebound in the average prices of residential properties.
Other reasons that explain this increase in price are directly related to the increase in demand that has been experienced in the last year. It seems that the Spanish population is improving their economic situation, or so they say, and mortgage rates continue at lows. At the same time, the pace of buying and selling of existing buildings previously built has been very different according to the regions, but it is true that there are numerous cities – Madrid and Barcelona – where there is little new housing on offer. In these cities one has to take advantage to develop new promotions with a view to the future.
Do you want to buy a house this year?
If you are thinking of buying or selling a house in the coming months do not hesitate to contact us without any commitment. From Deluxe we will help you with everything you need.

Posted on 31/01/2017