The excitement of real estate sector in Spain could have a short distance, according to the forecasts of the report EuroConstruct , which provides that the promotion of housing to slow down as of 2021.

The report, which is produced in Spain, the Institut de Tecnologia de la Construcció de Catalunya (ITEC), provides that this year the promotion of housing to grow by 11%, slow down regarding the growth of 16.3%, reached last year, and that deceleration will continue to decrease 3% in 2021. “There are reasons to be wary of the market continue to grow, ignoring factors such as the climbing prices in areas of highest demand, and risks as the cost of the credit and the progressive exhaustion of the cycle of opportunity investment,” the study reports.

The ITEC predicts that the construction will also slow for the little push of the civil work and rehabilitation

Josep Ramón Fontana, responsible of the markets of the ITEC, recognized that in these moments do not foresee difficulties in the sector, enjoying a good flow of projects and with the feeling of the companies is very positive. However, in its judgment, the recovery of real estate “it is based on factors that had to be temporary, to start the sector, as is the strong weight of investors in the purchases. But the demand that should establish a healthy market, the of families, it has not taken over, because its financial capacity has not returned to the levels prior to the crisis.” In his view, investors are a demand temporary and volatile because they with ease can opt for a move to another sector or another country.

Fontana also pointed out the danger of creating bubbles local concentration of demand, and construction in areas that attract population and have recovered from the crisis, as the big cities of Madrid and Barcelona, where they are shooting the prices. “The sector seems convinced that other geographical areas of iran joining the recovery, he adds, but for now the demand in these areas has not yet started, and neither does the promotion”.

the evolution of The market (VERS)

The political factors also have an impact. Thus, the ITEC has improved the forecasts made last year, to see how the political crisis of independence has not had the impact that was feared. In Catalonia, however, now weighs the uncertainty of the new general plan for metropolitan forces to allocate 30% of a promotion to social housing. “It seems that it has caused an acceleration of the request for the licenses, but after this first time, I might produce in the future other effects”, advanced.

Fontana recalled that EuroConstruct forecasts a slowdown in the promoter activity in the whole of Europe, in good part by the change of cycle in interest rates. “In Spain we believe that the slowdown will come also, although a year later”, he pointed out that he did not rule out that the hardness of the housing crisis, which has suffered from Spain, until recently, allow the sector “to simply make a temporary stop, to catch air”.

The crisis of Catalan has not had the impact that was feared, but the standards metropolitan sow doubts

promoting real-estate accounts for 32% of the production of the construction sector (compared to 21% of eu average), followed by rehabilitation, which provides the 30 per cent, below the 42% of the half of europe. “The rehabilitation does not just start in Spain, recognized Fontana, because the finances of the families are not very buoyant, and because the policies of public aid are not sufficiently effective,” he said. The new work is non-residential it also grows moderately (4% this year and next year), because the strength of the offices and the logistics sector is seen to be hampered by the slowdown in the construction of public facilities such as health, education or similar.

In this way, the ITEC has revised downward the forecasts published last summer and now expected the construction sector to grow in Spain to 5.7% in 2018, that percentage will be reduced to 4.5% in 2019, 3% in 2020 and to 1% in 2021, a growth this year lower than that of the economy as a whole.

The big dilemma: social spending or infrastructure

The second brake of the construction sector in the coming years will be the situation of public accounts, which will keep growth very low on the public work, after the growth of this year and the next for the municipal elections, advanced markets director of ITEC, Josep Ramon Fontana.

“The administrations have the pressure to control the deficit, and at the same time the pressure of many groups that want to improve their incomes after the crisis, as civil servants or pensioners, so that we can not provide large budgets for infrastructure,” he acknowledged.

A stretch of highway in Tarragona (Silvia Jardí / ACN)

in Addition, political uncertainty may prevent approval of the budgets, especially those of the central Government, which would take over from the municipal works. “Despite the change of government have not stopped the tenders but could it be that those projects do not have budget,” he acknowledged.

In Spain, the civil engineering contributes only 19% of construction output, compared to 21% european. For the whole of the EU, in contrast, EuroConstruct itself which provides that public works to boost the sector: in the period 2016 to 2018, the housing has contributed 70% of the growth of building, but by 2021 the civil work l will lead the growth, with a 44%.