The latest Spanish property market analysis released by experts at BBVA Bank predicts that 2017 will be a positive year for the real estate sector with the cost of residential property seeing an average increase of 2.5% driven by an improving economy, falling unemployment and the reduction in unsold housing stock.
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The general outlook is one of positivity in the Spanish property market as increased numbers of both Spaniards and overseas buyers are expected to purchase homes in 2017.
Access to continued low level mortgage rates along with increased disposable household income are expected to generate further increases in activity in both the mortgage and property markets. The banking group predicts an increase of 7% in the number of property transactions this year, slightly less than the increase witnessed in 2016 but sufficient enough for the total amount of transactions throughout the year to reach around half a million.
However, the report also warns that the current negative Euribor rates which are used to set mortgage interest rates in Spain cannot last forever, at some point these rates will begin to rise again. It is expected that 2018 will witness a moderate slow down in the number of mortgages used to finance Spanish property purchases.