The recovery of real estate investment in Spain, which last year rose by 45% from the previous year to almost €14 million, will continue in 2018, according to all the forecasts. According to the Institute of Economic Studies (IEE, in Spanish), investment in real estate in Spain will continue to grow by more than 4%, mainly due to investment in housing. Sales of homes, which increased by more than 17% in 2017, will increase by more than 18% in 2018 to over 550,000 transactions, according to the latest report on the Spanish residential market drawn up by Servihabitat. Julián Cabanillas, the company’s CEO, says that “2018 will clearly be the year for real estate consolidation, with a vigorous market in most of the country, as shown by forecasts for the different indicators.
The factors helping to drive the market include the pull effect of effective demand, an increase in the availability of mortgage loans, investor interest and more new developments. New building projects will therefore grow by more than 20% in 2018, while the number permits granted with grow a little less. The year 2017 ended with 76,800 homes started and the forecast is that this year will end with some 94,000 homes started, an increase of 22%. Lastly, building permits for housing grew by 28% in 2017 to 117,800 projects, and it is expected that these will grow by another 19% this year to 140,000 units, according to Servihabitat data.
The retail and office segments were also quite strong at the start of the year, with the non-residential sector growing by 40% in the first quarter. According to Savills Aguirre Newman, the volume of investment expected in the distribution sector in the coming months will be around 2 billion, while in the office segment, transactions totalling some €2.5 billion are predicted. These data reinforce the 2017 trend, which set a record for the last decade by reaching 9.2 billion in direct investment in the non-residential segment, the second highest in the historical series and exceeded only by the 10.7 billion reached in 2007. The non-residential investor profile is still dominated by funds, which represent 60% of the total, followed by real estate investment trusts (Socimi, in Spanish) with 19%. Savills Aguirre Newman also says that international capital accounts for 63% of the non-residential segment and is the leading investor in all segments except for offices.