5/11/2014 – Idealista
In its latest update on the financial stability of the country, Spanish central bank states the real estate market is very close to full adjustment. The entity says the future change of the prices will largely depend on Spain’s economic performance, lending and pace of absorbing the present unsold housing stock.
Citing the data published by the Ministry of Public Works, the Bank of Spain reminds that at the end of 2013, the stock represented more than 560.000 units. During that year, only 3% of the total was absorbed and around 13% of the 2009 peak.
Good news is that demand for homes ‘shows a certain improvement’, though ‘far away from the upper levels seen during the boom’.
When it comes to prices, the central entity says that since the 2007 peaks, they fell by 30-40%. As per its report, the adjustment took place in two phases (2008-2009 and 2011-2013), ‘aligned with the twofold recession in Spain’.
The Bank of Spain assures that the most important market indicators started ‘to confirm a significant slowdown in the sector’s slump’. It supports the statement with the following arguments: home sales stabilization, advance in mortgage approvals and building permits issuance, as well as moderation in the abrupt price decline.
Original article: Idealista
Translation: AURA REE