CaixaBank estimates that housing will be more expensive than expected due to the good performance of the economy | Economy

By 2024 housing will become more expensive than initially projected. The good performance of the economy caused CaixaBank Research to revise upward its indicators on the real estate market. If months ago he predicted that prices would be flat with an increase of 1.4% in 2024, he now believes they will rise by 2.7% to 3.5%, as Judith, a senior economist in the bank's analysis department, said this Wednesday. Montreal. The main reason, the expert explained, is that the behavior of the general economy in recent months has been better than expected. Indeed, he promised that Spain's GDP growth for this year will also be reviewed in the next table of macroeconomic indicators the bank will deliver in March, which is now “closer to 2%” from 1.4%. ”.

According to the latest data published by INE, the Spanish economy grew by 2.5% last year, after a growth of 0.6 points in the last three months of 2023. will rise to 1.8%,” said Montoriol, who attended a conference on real estate finance organized in Madrid by Madrid developers' association CaixaBank and Asprima. This excellent general performance is also reflected in the real estate sector, for which the expert has influenced the bank's latest forecasts: more houses were sold last year than expected (although less than in 2022) and the same happened with permits for new construction. houses.

As a result of this fundamental situation, CaixaBank Research has modified its expectations for this year, which will still be one of “real estate recession”. For example, last year's nearly 600,000 sales will continue to fall, but they will only be around 550,000 (compared to the previous forecast of 510,000). New construction visas will rise to 115,000 (previously estimated at 105,000) and will be at the most appropriate transition rates. As the market resists better than expected, these will fall much lower than expected. If until now the basic scenario has been flat (1.4% growth, actually indicating a decline in some second-hand markets), now the prices are maintained very intensively: between 2.7% and 3.5% depending on the statistics you look at (there are two official ones, the Government and the INE).

The reasons outlined by Monterio are very similar to what made the Spanish economy one of the best performing in Europe. More resistance than expected, meaning the baseline scenario for 2024 (assuming current geopolitical tensions in Ukraine, Gaza or the Red Sea do not worsen) improves significantly. and a “great machine”, tourism. Tourism GDP will also outpace general GDP this year, by 2.5% according to the bank's projections, and the sector will be a driver for others.

This is reflected in the real estate sector in home sales by foreign nationals, residents of Spain and foreigners. Montreal is an example where 2023 contracted less than expected. Last year they signed 90,000 actions. They are less than 95,000 in 2022, but the decline is much less steep than the general decline. They illustrate the dynamism shown by the archipelago's real estate markets and the entire Mediterranean arc. In fact, the provinces with the highest price growth are located next to Madrid and Guadalajara (Balearic Islands, Málaga, Santa Cruz de Tenerife, Valencia and Alicante). And it has a correlation with the demographic behavior of those areas, which attract more population and build more houses. In addition, Montoriol cited the good performance of the labor market and low housing debt as reasons that lead to an optimistic view of the real estate market, which will enter an “expansion phase” in 2025 if his predictions come true.

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