(…) This will be the worse year in history for the property market. These are not surprising news, but they are important. Above all if we compare them with the Government´s opinion, as it continues to assure that it is a good moment to buy a property.
The real estate consulting company Horizone made it very clear yesterday, as it presented its annual report on the situation and the prospects of the real estate market. The conclusions are obvious. To start with, the building industry will destroy another 100.000 jobs in 2013. That is, 10% of the total occupation within the sector, which reaches one million workers. “No matter what measures are taken, the destruction of jobs is irreversible”, Julio Gil, managing partner at Horizone, declared.
Also, the price of properties will continue decreasing steadily. At least, a fall of 30% in all regions. “We cannot know how much property prices are going to fall, as they depend on the transfer policies of the financial institutions”, Gil assured. From the point of view of the demand the intensity of the fall will be linked “mainly to the job market”.
According to Horizone, there are other factors with push prices down: “the oversupply of properties (between 800.000 and 850.000), the increase of the VAT, the scarce financing to individuals and the mortgage interest rates, which continue to rise even though the euribor continues to fall”. As for the stock, it will scarcely diminish in the next few months.
At the end, the capacity of the real estate companies depends on their financers. Also, the marketing policy of Sareb is not clear”, Gil added. This is why small and medium sized developers will continue to disappear, in his opinion.
The director of Horizone believes that the effect of the bad bank in the real estate market “will not be very high in 2013. Any influence will only be seen at the end of the year”. In fact, “all institutions are on the loo-out”.
Anyhow, the demand would reach minimum levels, especially in the first six months of the year, “due to the advance of the purchases made in 2012, the worsening of the tax conditions and the macroeconomic deterioration”, the report details.
“It will be the worse since statistics started to be worked with”, it stresses.
Another negative figure within the sector would be the offer. Less than 44.000 properties will be authorized and 95.000 will be built, while “the number of finished properties will be below the 119.980 reached in 2012”.
With this scenario in view, the real estate future will be even blacker. “The only subsector that could hold the drain of unemployment would be the restoration”, Gil assures. But the restoration will not work “if the corresponding financing is not there”, he added. (…)
Finally, Gil proposed “the temporary suppression of the reservation of plots” intended for subsidized housing, which are not built.
Conclusion: in the real estate sector, the best thing about 2013 is that 2014 could be even worse.