This is a website for buyers, owners, and sellers of property in Spain, offering reliable information and resources to help you get things done with confidence. It is run by Mark Stücklin, author of the Spanish Property Doctor Column in The Sunday Times (2005-2008), and the book ‘Need to Know: Buying Property in Spain’ published by Collins.
Spanish house prices are on the road to recovery, but it will be slow and patchy, argues Bankinter in its latest report from the bank’s research arm.
The main impediments to a housing market recovery are weak growth in demand, and the glut of homes still on the market in some areas.
Low levels of new household formation, plus gradual population decline, are reducing potential demand for property in Spain, at least in areas that do not benefit from foreign demand for holiday homes. “Demographic trends will exert quite a negative influence on demand for housing,” explains the report.
There are also economic factors restraining potential buyers, for example high unemployment, and the lack of mortgage credit.
Bankinter expect house prices to rise two per cent on average this year, and four per cent next year, but with big regional differences.
The factors identified by Bankinter that will drive rising house prices in the next two years are as follows:
1. The affordability ratio is back to sustainable levels of around 33% of gross household income, back to where it was last in 2001, and far away from the 49% it reached in 2008.
2. The Spanish property crisis brought new home building to a halt for the last five years, meaning there is now a shortage of property in some areas.
3. House prices are already rising in city centres, especially Barcelona and Madrid, and in the best areas of the Spanish coast, say Bankinter.
Peter says:
I find it very hard to see a future improvement in any property expectations when Europe is on the verge of collapse and chaos especially if Greece finally breaks free of the loop will then more than likely spread to other countries like Spain?? And if there is an upturn it will surely be short lived!?
Juan Miguel says:
Happy days are here again!! Property prices rising. Oh really then why do we see this week advertised:- luxury 2 bedroom ex Polaris World apartments on a golf course 15 mins from Mar Menor for £38,000! If that is rising prices one has to ask what were they before, Spain got into this mess by ignoring all the warning; doesn’t anyone ever learn anything. On a rainy day if you are told it is sunny outside do you believe them or look out the window?
To those whose hope springs eternal, – look outside, watch on TV ‘homes in the sun’, look in the windows of estate agents ask those who have sold. They all will tell you a different story.
Saddened at such biased journalism.
Juan Miguel
Mark Stücklin says:
This is an article about a report by a bank arguing that AVERAGE Spanish house prices will rise by 2.5% this year and next year, whilst warning that any recovery will be slow and patchy, identifying several factors depressing the market like population decline, high unemployment, etc.
The AVERAGE price increases forecast for the next two years are small by any measure, and could easily turn into real price decreases after inflation. It’s not as if they are forecasting booming house prices or anything like that.
For merely writing an article on this rather downbeat report about the Spanish property market from Bankinter, you accuse me of “biased journalism”. Please explain how the article is biased. How did I distort the Bankinter report?
You seem to struggle with the concept of averages. “AVERAGE” does not equal “ALL”. It’s possible for prices to be rising in one area and falling in another, yet the average is positive. With regard to AVERAGE prices your example proves absolutely nothing.
That said, I’m personally sceptical that AVERAGE prices are or will rise anytime soon. But this article is not about what I think, it’s about what a bank thinks.
Phillip says:
What I see on the ground too Juan. Lot of misinformation about.