CaixaBank estimates housing will become more expensive than expected due to strong economic performance | Economy

Housing in 2024 will become more expensive than originally planned. Good economic performance has forced CaixaBank Research to revise its performance in the real estate market upward. If a few months ago he predicted that prices would tend to stabilize in 2024 with a rise of 1.4%, he now believes they will rise by 2.7% and 3.5%, as senior executive said this Wednesday bank research economist Judith. Montoriol. The main reason, the expert explained, is the behavior of the economy as a whole in recent months, much better than expected. Moreover, he assured that in the next table of macroeconomic indicators, which the bank will present in March, Spain’s GDP growth for this year will also be considered: from 1.4%, as it is now, to a percentage “close to 2%. “

The Spanish economy grew by 2.5% last year, after growing by 0.6 points in the last three months of 2023, according to the latest data published by INE. to 1.8%,” said Montoriol, who took part in a conference on real estate financing organized in Madrid by CaixaBank and Asprima, the association of real estate developers in Madrid. And this improvement in overall performance is also reflected in the property sector, where the expert influenced the bank’s latest forecasts: more houses were sold last year than expected (albeit less than in 2022), and the same happened with building permits new houses.

As a result of this base case, CaixaBank Research has changed its expectations for this year, which will continue to be a year of “slower property market growth.” For example, the nearly 600,000 sales that occurred last year will continue to fall, but will only reach the 550,000 mark (compared to the previous forecast of 510,000). The number of new construction visas will rise to 115,000 (105,000 at the previous estimate), and the most significant change will be in prices. Since the market is resisting better than expected, they will slow down much less than expected. If until now the base scenario was a leveling off (an increase of 1.4%, which would actually mean a decline in some secondary markets), now prices are supported more vigorously: between 2.7% and 3.5%% depending on statistics you’re looking at. (there are two official ones: government and INE).

The reasons outlined by Montoriol are very similar to those that make the Spanish economy one of the most efficient in Europe. The resistance is larger than expected, meaning that the base case (assuming current geopolitical tensions do not worsen in Ukraine, Gaza or the Red Sea) for 2024 improves significantly. And as a “great engine” – tourism. Tourism GDP will also grow above overall GDP this year, by 2.5%, the bank forecasts, and the sector will become a driver for others.

This is reflected in the real estate sector in the sales of houses by foreign nationals, both Spanish residents and foreigners. Montoriol cited this as an example of the sector contracting less than expected in 2023. Last year they signed about 90 thousand transactions. There are fewer than 95,000 in 2022, but the drop is much less steep than the overall decline. And it is they who explain the dynamism that the real estate markets of the archipelagos and the entire Mediterranean arc demonstrate. In fact, the provinces with the highest price increases are located there (Balearic Islands, Malaga, Santa Cruz de Tenerife, Valencia and Alicante), as well as Madrid and Guadalajara. And this correlates with the demographic behavior of those areas that attract more people and build more homes. In addition, Montoriol cited strong labor market performance and low household debt as reasons that make him optimistic about the real estate market, which will enter an “expansion phase” in 2025 if his forecasts pan out.

Follow all the information Economy And Business V Facebook And Xor in our weekly newsletter

Five-day program

The most important economic quotes of the day, with keys and context to understand their scope.


Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button