8/04/2014 – El Confidencial
Trust in Spanish real estate market is being restored in dribs and drabs. Appallingly high unemployment rate, the Government´s decision to put an end to tax relief for property purchase or the VAT crippling new house acquisition have been recognised as the most serious obstacles for market recovery that in turn is the engine for overall economy improvement.
The Consumer Confidence Index report by ST Sociedad de Tasación represents an advance from 31.4 up to 38.1 points. The data suggests a 7 bp appreciation over 100, however the score is still far away from the 50 points confirming recovery. The index has been based on opinion of 700 appraisers from every corner of Spain about the past and the future quarters in the market. (…).
The dreadful unemployment is undoubtedly one of the factors that affects the market revival in the harshest way. Although in March the number of jobless diminished by 16.620 individuals, the real estate sector activity remains fragile due to decline in income of families. In fact, many of them have been forced to migrate outside of Spain in search of more stable future. Moreover, access to financing is quite limited and therefore the purchase is only available to investors with their own funds. As a consequence, the demand also goes down.
(…) Although celebrating the market revival might be premature, experts from the Sociedad de Tasación are positive about the future. This quarter is expected to bring improvement in sales in all the segments (i.e. housing developments, land, main and second houses).
´The trust in economy and the sales betterment has been increasing over the last five consecutive quarters. Although it is happening very slowly and the figures oscilate around negative area, the recovery is expected to arrive in short-term´, explains the report.
It also adds that the equity funds present on the market for the last quarters will contribute to faster stock absorption. (…).
Original article: El Confidencial (by Elena Sanz)
Translation: AURA REE