Big Increase in Construction Activity in Spain
Do you have a property for sale in Spain? Spain’s property market has made a strong comeback recently. This can be witnessed by the massive increase in construction activity across the country, especially in cities such as Madrid, Barcelona and Valencia.
Real estate service firm CBRE Group Inc. says that there are over 250 cranes currently in use in Madrid, the capital of Spain. This is up by 5 percent since last year. CBRE has been analysing the surge in construction activity with the help of Airbus satellite images. They say that there is no question that construction of new homes and buildings are on the rise.
Lola Martinez, CBRE research director says in an interview with Bloomberg, “It shows a positive trend as it implies that projects quickly replace each other and therefore activity is constant. We’re recovering lost time.”
Construction in Spain is very much in the recovery stage. This comes after a massive decline in home sales by 96 percent from its peak in 2006 to the trough in 2013. The banking crisis had a severe impact on Spain, leading to an economic crash.
There was widespread unemployment in the country, which was as high as 25% for a while. But since then, the real estate sector has largely recovered. There is a tremendous increase in the demand for homes, villas and apartments for sale in Spain.
Construction activity in Spain has increased by as much as 4% this year and this pace is expected to be maintained right unto 2020. The Spanish economy is all set to grow by 3 percent for the 3rd year in succession. 2017 has been a great year so far, especially with a stable government in power at the centre. Prime Minister Mariano Rajoy’s pro-business policies have been lapped up by foreign investors.
What’s different about this economic recovery is that Spain has been relying on exports and consumption, and not so much on real estate for economic growth. Felix Lores, an economist at BBVA Research says that this change is important for the property market as a whole.
“There is an important difference from the past. Usually a surge of the construction activity preceded an expansion of GDP, which was relying on this sector -- now it’s the other way round,” Mr. Lores says.
The demand for apartments in the biggest cities in Spain such as Madrid and Barcelona has been very high. Barcelona has had a tragic time in recent weeks. There was a terrorist attack in Barcelona in which 14 innocent people were killed.
The city is still recovering, but that was certainly a major shock to the system. However, Barcelona is still a safe city to live in and the terror attack will be seen as an isolated incident. So the impact of the terrorist attack on the property market in Barcelona is expected to be non-existent.
Certainly, this is as good time as any to be buying or selling a house, apartment or villa in Spain.