The month’s property news in bullet points
- 20% of potential sales are falling through for lack of mortgage financing, up from 5% a year ago, reports the Spanish daily El Mundo.
- Housing starts in Spain will fall to less than 200,000 this year, down from 700,000 in 2007, predicts the investment bank Lehman Brothers.
- Spanish property prices will fall by 20% over the next 4 years argues a new study sponsored by the BBVA foundation. The fall is expected to be gradual, which will enable the banking sector to cope without problems.
- The high price of Spanish property means there will be a million unsold properties on the market in Spain by the end of 2008 says a new report from the property sector association ASPRIMA.
- Antonio Trueba, president of Parquesol, one of Spain’s largest listed developers, has said that developers raised prices too quickly, shutting potential buyers out of the market. He forecasts that prices will fall by 15% in the next 3 years.
- Prices at the very top of the market are reported to be stable, whilst other segments start to decline in price.
- The amount of money invested by Spanish companies and individuals in property outside Spain rose by 50% in January. Foreign investment in Spanish property rose by 18.8% in 2007 after falling in between 2003 and 2006.
- Spain’s housing market downturn has lead to a surge in companies going into administration that has overwhelmed the courts. In the Valencian Region, the number of companies seeking protection from creditors rose by 40% last year.
- Castellon’s city council (capital of the Costa Azahar) is working on a financial stability plan that involves raising municipal taxes to bring the city’s finances back into balance.
- The town hall of Benidorm, governed by the right of centre PP party (arguably just the political wing of the local real estate industry), ignored 93 demolition orders issued on illegally built properties between 1994 and 2004.
- Spain’s budget surplus fell by 51.4% in the first quarter of 2008, largely due to falling VAT receipts caused by the property market downturn. Later this year the budget will also be hammered by a 6 billion Euro tax rebate.
- An association of developers in Catalonia (ACDEI) is selling 2,000 flats at cost price, offering discounts of up to 40% of the list price. This initiative is an effort to shift properties they can’t sell in the present market.
- Whist the property market seizes up, and transactions fall, property prices continue to rise in Galicia, according to the savings bank Caixa Galicia. Average Galician property prices rose 6.9% (annualised) in the last quarter of 2007. Unemployment in the constructions sector in Galicia rose by 9% in the same period.
- Spanish construction sector activity rebounded in February, according to Eurostat, the EU’s statistics office. Construction output rose by 1.2% in February, having declined each month since November 2007.
- Asking prices for 56% of the resale properties listed at the Spanish property portal facilisimo.com have fallen by an average of 5.7% in the last year. Asking prices fell the most in Madrid, where 75% of resale properties now have lower asking prices than a year ago.
