As we near year-end, a round up of “expert” opinions on Spanish property price trends
Juan Enrique Varona, a professor at the University of Cantabria, says prices are between 15pc and 20pc off the peak, and need to fall to 35pc off. “Prices have not fallen as much as they need to,” given the market situation he says. “Demand is very low,” whilst supply is “out of all proportions.” As a result, “we still don’t know what the market prices for housing will be.”
Angel Cano, a director at BBVA, one of Spain’s top-2 banks, says prices will fall between 5pc and 10pc over the next 24 months, but not to the same extent all over the country. Some areas might even escape falls.
Nicolás Llari de Sangenís, a director of property consultants CB Richard Ellis España, says that the housing market will take “5 years to return to normality, which doesn’t mean there are no good business opportunities now.” He sees the best opportunities as primary residencies in Spain’s main cities. He points out that “you have to be clear that not all properties are falling equally (in price). Banks won’t offer these financing terms for ever, so take advantage of them now.”
Ratings agency S&P say prices will continue downwards, with no recovery in 2012.
Carlos Ferrer-Bonsoms, Director of residential property for agents Jones Lang Lasalle, says prices have already fallen 35pc to 40pc since the peak, and could fall another 15pc in areas of over-supply before they bottom out. “There are many areas with over-supply where house-prices will fall and lenders will have to offer very good financing.” Prices will not fall any further, however, in some areas where there is a shortage of sought-after homes, for example parts of Barcelona and Madrid.
According to the international firm of auditors Ernst & Young “Any significant recovery in Spanish building activity looks far off, because house-prices are still probably over-valued and we expect them to continue falling for at least the next 3 years.” They believe Spain is already in recession and won’t start growing again until 2012.
Property prices in Madrid have fallen 44.8pc since the peak in 2006, according to a new study by Spanish estate agents Tecnocasa. Most experts agree that prices have fallen more on the coast than in Madrid, so the price of holiday-homes on the coast has probably fallen by 50pc or more.
On the subject of land values, Mikel Echavarren, head of Spanish property consultants Irea, does not expect prices to fallen any further because they have already reached zero. “The market for land has disappeared. There are almost no transactions between genuine investors. Land has reached a market value of zero, or even below.” Below zero means you would have to pay someone to take the land off your hands.