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It will be necessary to build 100,000 new homes in Spain every year between now and 2020 to meet annual demand, increasing to 140,000 per year for the following five years, according to José Luis Suárez, a professor of financial management at the IESE business school.

In 2006 construction levels in Spain were hovering around the 800,000 mark, from 2007 (when the property market crashed) to 2014 the average level of construction dropped to just 75,000 per year. Construction levels bottomed out last year reaching under 50,000 leading Sr Suárez to believe that construction levels in Spain will recover and prices will continue to rise until 2025.

In 2003 the average price of property, per m2, rose by 13%, but after the crash seven years of declines followed taking prices from €2,062 per m2 to €1,400 per m2 in 2014. In 2025 property prices will reach peak values previously seen at the height of the property boom, Suárez estimates.

If the professor’s estimations are correct then property prices could increase by as much as 40% over the next nine years, making Spanish property an attractive investment opportunity.



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