This is a website for buyers, owners, and sellers of property in Spain, offering reliable information and resources to help you get things done with confidence. It is run by Mark Stücklin, author of the Spanish Property Doctor Column in The Sunday Times (2005-2008), and the book ‘Need to Know: Buying Property in Spain’ published by Collins.
Spanish property prices may barely have fallen so far, if you believe the official figures that is (down just 0.5% in 2008), but all that is going to change in 2009, according to BBVA, one of Spain’s largest banks. Prices will fall “close to 5% in 2009 and 10% in 2010,” says José Luis Escrivá, head of research at BBVA, leading to a total fall of 25% by 2011. Swiss banks Credit Suisse and UBS have already forecast falls of 30% in a similar time frame.
BBVA also estimates that the inventory of new homes languishing on the market in search of a buyer stands at between 800,000 and 1.4 million, somewhat higher the Ministry of Housing’s estimate of 650,000 unsold new homes. Neither offer figures for the number of resale properties on the market, which is likely to be at least as big again.
With Spain’s housing glut putting prices under pressure, it won’t be until 2010 that the market starts to digest the oversupply, thanks to lower mortgage rates and a drastic fall in housing starts. BBVA forecasts that in 2010 base rates will be 1% and Euribor – the interbank lending rate normally used to calculate mortgage repayments in Spain – will be just 1.9%, whilst housing starts will be down to 200,000 per year, from more than 800,000 in recent years.
polaris-world says:
I find it incredible that the Spanish authorities can not provide accurate statistics for the state of what is probably the most important economic market for the Spanish economy.
Prices fell by 0.5%?? in 2008. Well let’s hope that rate doesn’t double to 1.0% in 2009, we could have a real crisis on our hands!!
So let’s have an unofficial and realistic view from those closest to the market…
Prices fell by up to 30% on the costas in 2008. The government figures lag, probably due to them being based on completions which can be 2-3 years delayed from contract date as developments get built and completed.
That is no excuse in the slightest for complete incompetence on providing realistic figures that give confidence to buyers and sellers alike.
However for those of us in the industry we hope and expect that most of the bad news is out of the way. While government figures catch up in the next few years anyone who wants to buy in at the real depressed prices right now (30% down!!) can benefit from the inevitable upturn.
I’ve seen a few recessions and an inevitable upturn is always further away than what is actually achieved. Recessions and recoveries accelerate beyond analysts’ expectations. Every time.
If you are not an investor, then just get on with your life. You will be 3 years nearer death by the time the official figures catch up. That’s 3 years wasted time if you can afford to buy now. http://www.polarisworld.info/time-to-buy.php
Buying property in Spain has always been about lifestyle.
Paul Williams
BSc Hons. Mathematics & Statistics
Chartered Accountant
MD Villa Cashback
http://www.polarisworld.info