Country Report Spain Q3-2019
“The low-interest-rate phase is now more of a permanent state of affairs than a temporary one.”

Dear readers,

In the third quarter of this year, the REECOX offered a good reflection of the current situation in Spain: although almost all economic parameters continue to appear positive, people are looking to the future with a certain amount of unease. Many market participants are asking when the cycle will come to an end and are already trying to prepare themselves as well as they can for that eventuality – even though there are currently no signs of an end! It’s more of a ‘perceived truth’, but is hardly surprising. The low-interest-rate phase is now more of a permanent state of affairs than a temporary one. That makes this cycle different from previous cycles, which is the very cause of the uncertainty.


Your Maria Teresa Linares Fernández

Contact

Ms María Teresa Linares Fernández
Managing Director Spain

Phone: +34 618 109905
E-mail: Maite.Linares@Deutsche-Hypo.de

REECOX Spain remains robust

The development of the Spanish real estate sector has been positive so far in 2019. Following a strong price increase at the beginning of the year, the second and now the third quarter indicated stability overall, which is a favourable development when viewed from a European perspective. At the end of the third quarter, the Spanish REECOX stood at 199 points, a 0.5 % increase on the previous quarter.

Real estate shares on the rise, business sentiment cautious

The slight upswing is due primarily to the positive momentum on the Spanish real estate market as indicated by real estate shares on the ES BCN 5 Property real estate index, which rose by around 7.9 % in the third quarter to its current level of 1,186 points – a value that has not been exceeded since December 2017. This is the third quarter in a row where a rise has been recorded, which points towards a positive trend.

The Spanish leading stock market index, the IBEX 35, also saw robust development, rising by 0.5 % quarter on quarter to its current level of 9,244 points. Nonetheless, the third quarter was marked by a temporary decline to well below the 9,000-point mark. July (-2.5 %, 8,971 points) and August (-1.8 %, 8,812 points) demonstrated negative trends, while the price gains in September (+4.9 %) delivered a positive overall result for the third quarter. By contrast, business sentiment in Spain as recorded by the Economic Sentiment Indicator (ESI) fell slightly in comparison to the previous quarter by 0.6 % to 104.2 points.

Synopsis of Input Variables and Real Estate Economic Situations Q3-2019

Country

Stock Index

Real Estate Economy Index

Economic Indicator

Base Interest Rate

Interest Rate 10-Year Government Bonds

Q2-1907/1908/19Q3-19Delta (%)
Q2-19 / Q3-19
DE
eq
up
do
eq
do
296.6
0.0
0.0
295.6
-0.3
GB
eq
up
dodo
eq
do
198.9
0.0
0.0
189.5
-4.7
PL
do
up
eq
eq
dodo
186.8
0.0
0.0
185.0
-1.0
NL
up
up
up
eq
dodo
188.4
0.0
0.0
192.0
1.9
FR
up
up
eq
eq
dodo
231.8
0.0
0.0
234.7
1.3
ES
eq
up
eq
eq
dodo
198.0
0.0
0.0
199.0
0.5