Over the next few years, Spain will continue to build, albeit more moderately. The economic forecast foresees a slowdown in investment in construction in 2018 and a new rebound in 2019.
Real estate investment has at least three years of continuous growth in construction activity.
The revision of the report ‘Macroeconomic projections of the Spanish economy (2017-2020)’ updates the forecast of construction investment downwards. Moderating the reactivation up to 3.8% in 2018 and increasing it by 4.2% in both 2019 and 2020.
A growth that owes a lot to the giants of real estate investment. Companies that contribute 10% of the Gross Domestic Product (GDP). Equivalent to 111,000 million euros.
And that could be even greater to bet clearly for the rehabilitation and energy efficiency. A sector that needs better policies from the central administration.
The Bank of Spain moderates its forecasts
The new estimate from the Bank of Spain revises downwards the majority of economic data for the next three years.
According to the projections of the banking regulator, consumption will lose momentum between 2018 and 2020. As will investment in construction and capital goods.
Regarding the construction activity, the Bank of Spain expects to close 2017 with a growth of 4.5% year-on-year. Against the latest forecast (+ 3.6%).
However, for 2018, the forecasts are not so positive. Falling to 3.8% year-on-year. Nine tenths below the last calculation (+ 4.7%).
This figure will improve in later years. Rising to 4.2% in 2019 and remaining in 2020. Also with 4.2%.
Investment in construction promoted by the real estate sector
Even at levels below those before the crisis, the real estate market returns with great force.
Situation to which, in large part, investment in construction contributes. Making the ‘brick’ contribute a wealth of 111,000 million annually. 10% of GDP.
At the same time, the specialized consultancy has been invoicing more than 13,000 million euros for three years. In the first years of the recovery, driven by the socimis, and currently with the main investment funds as prominent players.
In fact, according to CBRE, real estate investment will grow an average of 60% in 2017. Compared to 67% growth in foreign investment, driven by the presence of funds.
All this at a time of ‘making cash’ for the big reits (Merlin, Lar, Hispania, Axiare and Colonial). Five brick giants with assets valued at 24,300 million euros and focused on asset rotation, obtaining capital gains and selecting their purchases.
Suspense to Spanish rehabilitation in Europe
With regard to investment in construction, the evaluation of energy rehabilitation strategies in Europe has been updated in recent days.
An analysis of the BPIE report ‘Renovation strategies of selected EU countries’, published in 2014, in which Spain ceases to be one of the best rated countries.
In the new report ‘A snapshot of national renewal strategies’, our country loses the rating of notable to obtain a suspense. Due, especially, to the lack of concrete measures in the energy rehabilitation strategy of housing.
In 2014, Spain stood out for the technical evaluation of the residential park and the opportunities for energy efficiency. While in 2017 it stands out due to the lack of practical measures, despite the existence of initiatives.
A notice for Spain that goes to the central administration. Little involved in policies of general energy rehabilitation, against countries such as Croatia or the Czech Republic.
Subjects such as the building of a national stock, the profitability of the rehabilitation and the stimulus measures to renew the construction receive a regular rating. While the orientation in the decision making of investors, and the exposure of energy saving and its main benefits receive a clear suspense.
A new pending subject for the construction in Spain and its impulse on the part of the administrations.
