The news from the Spanish property market has improved a bit since mid-2013, but there are still reasons to be bearish about the overall market in 2015, reveals a new report from a type of think-tank of professionals in the appraisals business.
Continued weakness in demand is the main factor why the Observatory argues “the conditions are still not right for a housing market recovery.” Few of the participants expect dramatic improvements in the drivers of housing demand, such as employment and financing.
“The insecurity of new jobs, drop in income, and high youth unemployment are the most significant factors, and while they dominate, there’s no reason to be optimistic,” the Observatory finds. And even with some signs of improvement in the macro-economic outlook, there are no guarantees that this will translate into demand for new housing this year.
On the supply side, the experts participating in the Observatory agree on one thing – that there will be no return to the pre-crisis building boom anytime soon. But if there is any recovery in building activity this year, it’ll be driven by rising employment, mortgage financing, and builders adapting to the changing needs of buyers today.
Bernard Hornung says:
With fewer households being formed in Spain, leading to less demand for housing, this report appears to be accurate. The macroeconomic factors just make it almost certain that there will not be a recovery in the housing market until 2016 at the earliest and that such a possible recovery would no be felt until 2016.
Speakupboy says:
Can we get past the idea that stupidly high property prices that get even higher year on year is a good thing? Surely the term “housing recovery” should really mean a return to prices that make some kind of sense relative to what people could and should pay- i.e. we are having a real “housing recovery” now.
PeteInSpain says:
Hi SpeakUpBoy, trust me, if you bought a house in spain 10 years ago and wanted to go back to england, you would also be hoping for increases in House Prices. Negative equity is a scary position to be in, and a lot of people bought houses in Spain to retire in, not for speculation. 3 % increases in house prices every year is a good thing, as it covers stamp duty and maintenance costs, and allows people to sell and and move without taking a massive loss.
Phillip says:
There doesn’t seem to be many participants in the photo.