Where are Spanish house prices heading?

A round-up of price forecasts from leading experts and institutions. Written a few weeks ago, then forgotten about, I’ve decided it’s still relevant so here you go.

So where are Spanish house prices heading? Down, according to Nouriel Roubini, the bearish economics professor of NY University who correctly predicted the financial crisis. “Spain is the reality that everyone is ignoring,” he warned, speaking at a recent conference in Madrid. Thanks to high unemployment and the housing bust he forecasts prices will fall another 25pc.

Another 10pc down, implies the Bank of Spain, saying the market will bottom out 25pc below the 2012 peak, having fallen 15pc so far. If so, this crisis will have been as bad as the 70s, when Spain went through wrenching change after a property bust and its transition to democracy.

Josep Oliver, economics professor at the University of Barcelona (UAB) also says that prices have fallen 15pc and will fall another 10pc if past housing busts are anything to go by, and if housing affordablity is to return to “reasonable” levels.

As for Angel Cano, a Director of BBVA, one of Spain’s biggest banks, prices have already fallen 30pc since the peak and have another 5pc to 10pc to go before they bottom out. He also says prices have fallen 50pc in some coastal areas, with large concentrations of holiday homes.

José Blanco, Minister of Public Works, has other ideas. Prices won’t fall much more because “they have already fallen enough,” he argues.

In its latest economic report, the Spanish Banking Association (AEB) says only that the real estate sector adjustment is not yet over, and that both prices and stocks have to fall before things will get better.

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