Spanish property prices have fallen by 30% since Spain’s economic downturn began last year, says Santiago Baena, president of the API real estate agents association (Colegios Oficiales de Agentes de la Propiedad Inmobiliaria).
Speaking at a recent conference on Spain’s property crisis, and reported in the Spanish press, Baena said that the adjustment in Spanish property prices currently underway is “brutal”, and that the situation this year is “radically different” to last year, when the sector was already “absolutely paralysed”.
Spain’s construction sector won’t stabilise and start to recover until 2009, forecasts Baena.
Baena also pointed out that many of the sector’s problems are due to a lack of regulation in the sector, and called for more legal protection for consumers. He recommends stronger legislation and the introduction of professional qualifications for real estate brokers. According to Baena, “minimum rules of the game” are needed to prevent “a market of the law of the jungle” in which “anyone can operate” without any code of conduct or oversight.
He also called for a reform of local government financing, so that town councils don’t have to rely on the construction sector for their finances. Baena described the present situation as “shameful”, and called for new legislation.
Baena then had a go at banks, who he said lent with “enormous generosity” in the good times, but who “now won’t lend to anyone.” He accused them of doing a disappearing act “when the going gets tough.”
Despite everything, Baena argues that now is a good time to buy property in Spain.