Is Spain’s investment cycle ready to dip?
At a club meeting in Madrid, members discuss the reasons why the economy continues to grow despite its position in the cycle.
February 27, 2020Real Estate
2019 was a year of uncertainty and danger, mainly due to political and economic risks that appeared as a result of Brexit, US-China trade war and global stock markets, not to mention the lasting demographic changes continuing to keep operators on their toes. The country is experiencing a slight deceleration of growth in 2020, but the economic outlook still seems to be quite positive compared to previous years. Now that the cycle is reaching its (expected) peak after Spain's fifth consecutive year of increasing property values, is the country now ready for an investment slowdown, or is the growth trend going to continue?
In Madrid, on the 20th of February, a GRI Club Espana meeting titled “Spain’s Investment Cycle - Ready for a slowdown or growth trend still on?”, gathered a select handful of the country’s most senior real estate investors, developers and lenders for a morning of in depth, closed door discussion. It was said that Spain’s economy had been growing to the kind of highs reminiscent of right before the financial crisis, with values in 2020 set to grow even higher. But what could be contributing to this aberration?
Participants also acknowledged that the country had a problem with young people being able to afford their own homes; in fact this is a global trend where the rate of inflation of housing prices have soared past the rate of inflation of wages. This situation has had a positive impact on the rental market, which has of course emerged as a more viable option for millennials.
The topic of immigration was also discussed; and compared their immigration statistics with the rest of Europe and Japan. Spanish landlords were said to be relieved following this development, as the young population moving from Eastern Europe looking for work is great for both the economy and residential demand.
The most senior investors, developers and lenders active in the Spanish market will return at Espana GRI on 20-21 April.
Article by Matt Harris
In Madrid, on the 20th of February, a GRI Club Espana meeting titled “Spain’s Investment Cycle - Ready for a slowdown or growth trend still on?”, gathered a select handful of the country’s most senior real estate investors, developers and lenders for a morning of in depth, closed door discussion. It was said that Spain’s economy had been growing to the kind of highs reminiscent of right before the financial crisis, with values in 2020 set to grow even higher. But what could be contributing to this aberration?
Participants also acknowledged that the country had a problem with young people being able to afford their own homes; in fact this is a global trend where the rate of inflation of housing prices have soared past the rate of inflation of wages. This situation has had a positive impact on the rental market, which has of course emerged as a more viable option for millennials.
The topic of immigration was also discussed; and compared their immigration statistics with the rest of Europe and Japan. Spanish landlords were said to be relieved following this development, as the young population moving from Eastern Europe looking for work is great for both the economy and residential demand.
The most senior investors, developers and lenders active in the Spanish market will return at Espana GRI on 20-21 April.
Article by Matt Harris
