Tuesday, 15 March 2016 14:00

 

Good for Real Estate Market in Spain and Barcelona

 

According to property market analyst and consultant Mark Stücklin at Spanish Property Insights, the growing number of business startups up in the Spanish property sector bodes well for the real estate market.

In the online monthly newsletter he explains that close to 95,000 new business startups were registered last year – the highest level since the final boom year of 2008. The biggest increase came from the property sales and development sector as revealed by the latest statistics from the College of Registrars.

Mercantile register, leading indicator for the housing market

He continues to state that as a result, real estate sales and development companies rose from 7.1% to 7.9% of all businesses, increasing by 11% in 2015, whilst agriculture and industry operations declined in relative size. At the same time, the number of businesses (all sectors) going to the wall fell last year for the second year running.

Stücklin makes clear that the relative changes in the fabric of the economy tell us something about where wealth is being created in Spain. Real estate wealth creation is back on the rise as the sector expands, is what these figures suggest according to the author of the ‘Spanish Property Doctor’ column in the Sunday Times. According to the expert, Spain is still a long way from the unhealthy situation in the boom years, when construction and housing made up 18.5% of Spanish GDP, almost double the European average.

He suggests looking back at the boom years to help illustrate how data from the mercantile register can be a leading indicator for the housing market. Figures now showing a double-digit growth in the Spanish property industry, were flashing red back in 2005, two years before house prices began to fall, and the bust began in earnest. Stücklin ends on a positive note stating that this time around those figures might be a sign of better times to come. Let’s hope so!