Housing investment is expected to grow 5.5% this year and 5.6% in 2020, after closing last year with a growth of 6.2%, while construction is estimated an advance of 4.9% and 4.7%, respectively.
This is included in the 'Situation Spain' report prepared by the bank's study service, which indicates that investment in housing will once again be one of the most dynamic items of demand during the current biennium.
The report indicates that it is expected that the ability of the economy to continue creating employment and the persistence of a scenario of low interest rates continue to favor the growth of residential demand, albeit at rates somewhat more moderate than those observed between 2014 and 2017 , when the sale of homes grew at an annual average of around 15%.
In any case, he points out that after several years of scarce initiation of housing, the excess inventory has been significantly reduced, which is an incentive to build new homes adapted to current needs and requirements.
In this sense, it expects the construction activity to continue its "favorable" evolution, although it clarifies that the uncertainty regarding economic policy in general and housing policy in particular, could condition the start-up of new projects.
Moderation of public investment
As for public demand, it predicts that it will contribute positively to the growth of activity, reinforced in part by the expansionary measures recently approved by the central government and by the electoral cycle.
In any case, the political uncertainty and the difficulties to take forward the Budgets "will condition the evolution of spending", qualifies. Even so, it expects an acceleration of the final consumption of the public administrations until 2.4% in 2019, while, in a scenario without changes in fiscal policy, it would moderate to 1.7%.
For its part, in a scenario of budgetary extension, it foresees a mild moderation in public investment, which would lead to investment in other constructions growing at an average rate of 4% in real terms during the 2019-2020 biennium.
Source: El Economista