Spanish banks predict house value increases in region of 4-7% annually

Forecasting Spain’s property market is perhaps easier today than it was, say, a decade ago, when very few people foresaw the global economic crash on the horizon.

But even with almost three years of back data pointing towards steady and continued house price growth, it still feels a little like tempting fate to suggest further increases are on the cards…

Spain’s housing industry has grown cautious, which is no bad thing considering the burnt fingers that followed the credit crunch of 2008.

However, since 2014 the state of the Spanish real estate industry has been excellent, with annual increases in sales figures and home values delivering a solid foundation for confidence.

With that in mind, many of the country’s leading banks – who know more acutely than anyone the damage caused by runaway speculation – have this week issued bold forecasts predicting that Spanish home values could increase by an average of 7% every year between now and 2020.

The most ambitious forecast was made by Solvia, the property division of Sabadell bank. Solvia believes that Spanish property values will be some 7.3% higher each year until 2020, albeit with wide regional variations.

Bankinter, meanwhile, sees a more gradual increase of 5% a year, starting this year.

According to Solvia, annual increases could be as high as 14% in Madrid, although whether such steep rises in home values will be welcomed is another matter entirely.

In terms of actual sales, the strongest markets through 2020 will be found in Málaga Province, Seville, Madrid, Barcelona and Alicante, forecasts Bankinter. Solvia believes that sales volumes will rise by around eight per cent a year until 2020.