The recovery in the housing market won’t begin until next year, when the bank forecasts residential investment to grow by a timid 2.1pc, after seven years of contraction and a cumulative decline of around 50pc. At that rate it will take the market another decade or more to get back to normal.
BBVA say it is hard to forecast the impact on investment of recent changes such as the introduction of Spain’s so-called bad bank, the elimination of tax breaks for home buyers, and the increase in VAT on new homes. These all add to the uncertainty in the market.
BBVA also forecast that the new housing glut will experience a “modest” decline in the course of this year.
Meanwhile, and new report on outlook for the European real estate sector by PwC and the Urban Land Institute recommends that investors start looking at Spain to take advantage of the inevitable opportunities at this stage in a housing market bust.