After the economic crisis began, the Spanish real estate sector barely survived for six hard years. But now there has been a rise of 35% in building permits for residential use, between January and November 2015. More than 44,000 permits were issued for new construction, which translated into a rise of 39.5% in apartment blocks and 25.0% in individual homes.
This is happening even though there are already hundreds of thousands of empty properties in Spain. Around 700,000 houses were built every year until 2008, more than other countries, like Britain and France, combined. Euros were also spent in massive infrastructure projects that now stand equally empty, like the Huesca airport.
Before the economic crisis there were almost 2 million people working in the construction sector, but now fewer than 700,000 are employed. With the permits rise this sector has already created almost 10,000 jobs in November 2015.
So, this increase in building permits is good news for investors in the housing sector, as this economic indicator is used to determine the state of future economy. Investors like Carlos Slim, a telecommunications magnate who’s worth nearly $73 billion, have returned to the Spanish construction sector after this growth. Slim is about to become the main shareholder of FCC, a Spanish builder.
Slim is not the only foreign investor betting on the Spanish real estate market. In 2014, more than a fifth of transactions (55,187) were made by foreign buyers.
Real estate is, therefore, starting to be the best investment again. In middle and up market city districts in Spain, real estate provides a combination of high expected capital gains and rental yields. Spanish houses saw their prices rise 4.5% in 2015. The rental prices are also rising, at an average of 3.3% last year, with the Basque Country retaining its title of most expensive region at an average of €10,01 per square metre per month.
The real estate community agrees that the prospects are for a continuing growth and recovery, but there’s disagreement about how strong or consistent that growth will actually be. But with a rise of the GDP to 3.2% in 2015, those prospects look positive.
If you’re considering investing in the Spanish real estate sector, contact us for more details or call us on +44 (0)208 863 8680. Our commercial property agents in London are here to help and advise you with any question you might have. You might also want to follow us on Facebook, Twitter, Instagram and LinkedIn for our latest news and updates.
