The combined forces of fewer home sales and lower prices have crushed the Spanish property market’s size as a proportion of GDP.
The chart above, by the analyst and university professor Kiko Llaneras, illustrates how home sales have declined 70pc since 2007 (red line), and average house prices 30pc over the same period (yellow line). The result is a housing market that has gone from 70pc of GDP in 2007, to just 6pc now (first chart below), whilst unemployment has exploded (blue line in second char) and the economy has stagnated or contracted (green line).
“We can imagine and speculate as to the consequences this is having on private debt, the destruction of jobs, the fall in Government revenues, and the weakness of the Spanish system,” says Llaneras, writing in Spanish at the blog Nada es Gratis (Nothing is Free).
One thought on “Spanish property market falls from 30pc to 6pc of GDP in just 5 years”
Willie Brannigan says:
In Spain, there may be some bargains to be had now in comparison to the dizzy house price heights of 5 yrs ago. But as a consequence this has led to a fall in govt and local tax revenues. As house prices drop the stamp duty paid at current levels is difficult for the spanish authorities to accept!! Buyers beware you will be charged a higher stamp duty tax based on the highest value of the property in recent years , regardless of what bargain price you pay for it now !…. ie that previous €1 million villa, now costing just €250k will set you back €65k and not €16.25k in stamp duty. Remember Spain has a massive budget deficit to cut, and even if the revenues have dropped they still have public sector wages to pay.