A few weeks to finish the year of consolidation, savers and families look with concern at housing. What awaits the real estate market in 2018? Surely, many more opportunities than dangers.
Neither 2017 was the year of another bubble, nor political uncertainty will lead to the paralysis of the housing market. Above all, the new real estate cycle brings with it a new way of buying or selling a home.
After the crisis, specialization and professionalism characterize the new actors of the real estate sector. While technology improves service and financing facilitates access to housing.
However, after a summer with record sales, new dangers seem to threaten the sector. The political situation in Catalonia, the new mortgage law and the rental market are news that worry many people. Is it worth buying a home now or is it better to wait some time?
According to most experts, the opportunities have not disappeared. It will simply cost more to find them. This is how the real estate market will be in 2018!
Threats of the real estate market in 2018
The prices of the house, the number of purchases, the signature of mortgages and the construction permits show a stable panorama for the real estate sector. I
n the opinion of Ferran Font, de pisos.com, there is the possibility of a “certain fall in prices, transactions and loans granted in Catalonia”. However, we will still have to wait until the 21-D elections to assess the real impact of the policy on the Catalan real estate market.
Another aspect to take into account is the reform of the Mortgage Law. Standard that will mean a ‘turning point for the financial markets, providing mortgages with greater transparency and security’. But also, ‘ending the collapse to which many courts are subject by the numerous mortgage claims on abusive clauses’.
This is not only a relief for consumers but also a threat. ‘If the rigidity of access to credit is recovered, precisely now that mortgaged assumes less risk’.
Finally, there is also a serious danger to rent. Because of the conflict the difficult coexistence between holiday homes and residential markets. And the spectacular increase in rental income as a result of the tourist rental boom.
Phenomenon that has led to 22 Spanish cities have more holiday flats than hotel beds, according to Exceltur.
Opportunities for real estate investment
In addition to threats, the sector also finds opportunities for the real estate market in 2018.
Jesús Duque, from Alfa Inmobiliaria, discovers some of the most outstanding. As the general perspective of investment, the markets with greater potential and the contagious effect in high standing projects.
Real estate investment will continue to grow
With prices that are still 30% below those reached before the crisis, the real estate market in 2018 has land to continue growing. ‘We handle expectations in order to grow an annual 4% nationwide’, points out Jesús Duque.
Although the increases will be smooth and very dispersed, depending largely on the location of each property. This perspective confirms the recent estimate of BBVA in its report ‘Situation Spain. 4T 2017 ‘.
In it, investment in housing is expected to grow by 8.2% in 2017. Turning to 5.9% next 2018.
Madrid and Valencia: up markets
‘If there are two interesting cities for the home buyer, these are Madrid and Valencia’, said Duque.
Political, business, urban and cultural stability will allow these two capitals to continue growing. Being, together with the tourist reference areas and certain provincial capitals, the only markets with capacity to grow in double digits.
On the other hand, ‘areas with poor communications, poor services and deficient infrastructure will continue to fall in 2018‘.
Betting on luxury with big investors
The last twenty months have been of enormous dynamism for real estate investment. However, and looking ahead, ‘it will be difficult to match these levels of profitability’. Especially if they end up taxing the capital gains on the sale of properties in periods of less than one year. In this way, the purchase of real estate for its rehabilitation and subsequent sale will be left on the road part of the profitability.
Even so, the market offers good opportunities such as investment in luxury real estate. A market that is especially concentrated in the center of Madrid.
British, French and German investment funds, as well as private investors from Mexico and Venezuela remain attentive to any opportunity in the heart of Madrid. Giving rise to high standing projects that end up increasing the value of adjacent areas.
In this sense, Jesus Duque advises: ‘those individuals who want to buy or sell should pay attention to this type of project, because they can boost the price of entire buildings above the average market value’.
