This blogpost will briefly analyse the housing price trends in the UK, Sweden and Spain.
The housing prices in the UK continued to rise in June by almost £3000 reaching £216,823, which is the highest level since the financial crisis in 2007. According to Halifax, it is still a too early stage to determine what kind of impact Brexit will have in the housing market, but the institution is acknowledging an eased pace of the growth. Yet, between the months of May and June, the price of the average UK home rose by 1.3 per cent. This means the cost for the average worker to purchase a home will require the equivalent of 6 years salary.
In Sweden, the housing prices increased by 10% throughout the entire nation and 15% in the Stockholm region. In 2015, Swedish property advisor Lennart Schuss was going to invest in the so called “million program”, which aims to construct one million residential properties with low energy consumption, but has now decided to head in a different direction after the significant increase in housing prices in the Swedish capital. Furthermore, interest ratesremain low as housing prices are rising within the country. However, the central bank of Sweden fears that Sweden is in an unsustainable bubble that could break anytime. According to HSBC economist James Pomeroy, the Swedish housing market continues to be a major threat to the economy. Heargues that if shall roll over at any given point during 2016 or 2017, the impact could be of recession-like nature, which would mainly affect consumption and employment within the country.
After many years of falling house prices, the Bank of Spain reports a strong increase for this year. It appears the real estate market was unaffected by the continuing failure of the country´s politicians to form a national government. In the first quarter of 2016, house prices rose by 6.34%. According to Spanish News Today, Spanish property sales will continue running at the highest level for the next few years.
Foreign property investment remains very strong and contributes to the Spanish economy. UK citizens are the number one foreign property owners and account for 21% of all purchases that are made by foreigners followed by France, Germany and Sweden who account for 6-7% respectively.
At Housers we encourage everyone, both Spanish and foreign, to take full advantage of this advantageous opportunity that is presented in the Spanish real estate market. We have simulated an annual average value appreciation of 17.6% and an annual net rental return of 3.3% by 12/08/2016.
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