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House prices fall in Spain in real terms for the first time in ten years
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By h.b. - Apr 18, 2008 - 8:08 AM
Data from the Ministry of Housing released this morning indicates that house prices rose in Spain last year by 4 percent.
The price of housing in Spain, in real terms, has fallen for the first time in ten years. The fall is now official with data released this morning by the Ministry for Housing. The new numbers show that on average house prices rose in Spain in 2007 by 4%, and that number is half a point lower than the current inflation rate in the country of 4.5% which is at a 13 year high.
The news comes with the arrival of the new Minister for Housing, Beatriz Corredor, and oddly meets the previous government target to reduce speculation in house price rises, and to see increases in line with general inflation. However this has been achieved in the climate of a sharp down turn in the sector, and now a more generalised fall of house prices is feared, which could in turn establish the nightmare of negative equity for some mortgage owners.
Some pessimists even claim that the down turn has been sharper than official figures indicate, while optimists say that new constructions have not been affected. The INE National Statistics Institute says that house sales reduced in number last year by 36% for resale housing and by 15% for new properties.
The previous time that house prices fell in Spain in real terms was in the 90’s when the loss of value lasted for some seven years.
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Readers' comments:
House prices fall in Spain in real terms for the first time in ten years
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By h.b. - Apr 18, 2008 - 8:08 AM
Archive Photo EFE
The price of housing in Spain, in real terms, has fallen for the first time in ten years. The fall is now official with data released this morning by the Ministry for Housing. The new numbers show that on average house prices rose in Spain in 2007 by 4%, and that number is half a point lower than the current inflation rate in the country of 4.5% which is at a 13 year high.
The news comes with the arrival of the new Minister for Housing, Beatriz Corredor, and oddly meets the previous government target to reduce speculation in house price rises, and to see increases in line with general inflation. However this has been achieved in the climate of a sharp down turn in the sector, and now a more generalised fall of house prices is feared, which could in turn establish the nightmare of negative equity for some mortgage owners.
Some pessimists even claim that the down turn has been sharper than official figures indicate, while optimists say that new constructions have not been affected. The INE National Statistics Institute says that house sales reduced in number last year by 36% for resale housing and by 15% for new properties.
The previous time that house prices fell in Spain in real terms was in the 90’s when the loss of value lasted for some seven years.
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Readers' comments:
Pops
18 Apr 2008, 11:36
18 Apr 2008, 11:36
"...new constructions have not been affected." I beg to differ. In my
particular corner of Spain, one recently-completed block of 16 flats
remains unsold and empty, one partially-completed block of 30 flats appears
to have been abandoned by the builders, and the labour force on another
partially-built block of 20 flats has been reduced to two men and a cat. So
we have a possible glut of 66 unwanted homes, as well as a score or more
smaller projects being undertaken in the hope that SOMEONE will be able to
obtain a mortgage. ...My prediction? Within a year, Mr Bean (sorry, Prime
Minister Zapatero) will bring in legislation to free-up all those piles of
illegal €500 notes gathering dust all over Spain. Use them to buy a house
and no questions will be asked.
Er_Guiri
18 Apr 2008, 13:16
18 Apr 2008, 13:16
Pops is right, it's beggining to look like it did 15 years ago: Ghost Town
urbanisations.
Personaly, being a second generation expat "gone native" who doesn't yet own a property, this is great! I'll just wait until next year, and once the prices are rock-bottom, i'll buy myself a villa! I couldn't care less about "investment properties", i just want somewhere to live and work!
Personaly, being a second generation expat "gone native" who doesn't yet own a property, this is great! I'll just wait until next year, and once the prices are rock-bottom, i'll buy myself a villa! I couldn't care less about "investment properties", i just want somewhere to live and work!
Er_Guiri
18 Apr 2008, 13:17
18 Apr 2008, 13:17
And it's not only building that has been affected, also arqueological
excavations: because it's usually construction companies that come upon
these finds, they are responsible for digging them. If theres no money,
they can't pay the arqueological team, so digging stops. Only University
excavations continue.
Please keep to the subject. Opinions published here are of our visitors, not the Typically Spanish team. Comments which go against Spanish laws or which are libellous are not allowed. We reserve the right to delete any comment we wish.
Por favor, céntrate en el tema. Son las opiniones de los internautas, y no las de Typically Spanish. No está permitido verter comentarios contrarios a las leyes españolas o injuriantes. Reservado el derecho a eliminar los comentarios que consideremos fuera de tema.
Por favor, céntrate en el tema. Son las opiniones de los internautas, y no las de Typically Spanish. No está permitido verter comentarios contrarios a las leyes españolas o injuriantes. Reservado el derecho a eliminar los comentarios que consideremos fuera de tema.
