The adjustment of property prices is far from finishing. According to several studies, it has not even crossed its equator. The Economist has been the last one to certify that there remains a long way downwards, as it states that property prices in Spain are still overvalued by 20%, after having adjusted its prices by 24,3% since the maximum levels reached in the last quarter of 2007.
This means that after five years of falls, the final sales could go on until reaching a devaluation of more than 44%. Properties will end up costing half their price than during the boom.
This goes along with the conclusions of Spanish experts, who declare that prices will drop an additional 30% during the next five years.
The British publication certifies that Spain closed 2012 with the biggest drop in property prices of all the countries included in the study, with a drop of 9,3%, higher than the Netherlands (-6,8%), Ireland (-5,7%) and Italy (-4%).
“The problems property owners are facing have worsened all throughout Europe”, the magazine declares, adding that “the agony is deeper in Spain”. It also establishes that “the Spanish collapse reflects a surplus of properties built during the real estate boom”.
The information indicates that , opposite to the tendency seen in Spain, other parts of the world are experiencing important increases in real estate prices, such as South Africa (5%).
Meanwhile, the Spanish National Institute of Statistics (INE) certified that the sale of houses decreased by 6,1% in November, down to 25.655 operations. This is a surprising relapse, as there were supposed to be increases in the last two months of the year, due to the end of the tax benefits from January 2013 on. This indicator breaks the upwards tendency generated during the three previous months.
The sale of properties was able to end a 17 month period of falls in August, when it increased after the government announced the end of the tax benefits on the purchase of properties and the increase of the VAT for newly built homes from 4% to 10% from January 2013 on.