A new Observatory for Socioeconomic issues set up by Spain’s notaries quantifies the toll taken by the crisis on the Spanish housing market.
With increasing signs the Spanish property market is bottoming out after seven years of contraction, the ‘Socioeconomic Reality Observatory’ set up by the General Council of Notaries has quantified the toll taken by the crisis on the Spanish housing market, and by implication society.
Peak to present, home sales have fallen more than half since 2007, the blowout year of the boom, and house prices have slumped by more than a third, on average.
Sales have gone from 854,000 per year in 2007, to 365,000 last year, a decline of 489,000 (57%).
The average price of a homes in Spain has gone from 2,000 €/sqm in 2007, to 1,272 /sqm today, a decline of 36%.
The housing market crash has left many Spanish households in negative equity, stuck in homes they can’t sell without realising big losses, whilst an estimated half a million or more have lost their Spanish homes to repossession. Family balance sheets have been hammered, leaving society feeling poorer, and the end result is where we are today – a country with higher debts secured against impaired collateral, and an economy still struggling to recover from the distortions of the real estate boom.
At least beleaguered Spanish property owners can take comfort from the news that house prices have stabilised in the last couple of years, and sales have started growing again, up 19% last year. New mortgage lending was up 43% last year, in another sign of improvement.