22/01/2014 – Expansion
The houses continue being overvalued in Spain and the adjustment will continue this year with a fall of 2% before their stagnation in 2015, according to the quarterly forecasts published today by Standard and Poor’s (S&P).
The credit rating agency points out that, in a report on the European real estate market, the prices in Spain continue between 12% and 20% above the long-term average and that the slowing down in the observed drop in the end of 2013, but this does not mean a change in tendency.
That is why, and taking into consideration that there is still an excessive supply of accumulated houses although only few houses have been built in the last years, it is estimated that the drop will continue, after the decrease of 5% in 2013 that is accumulated to the previous financial years: 10,5% in 2012, 7,1% in 2011, 3,3% in 2010 and 6,6% in 2009.
S&P underlines that the Spanish economy is improving but “only gradually” and thus predicts that this year the activity will grow 0,8% and 1,2% in 2015 with what the unemployment rate will fall only up to 25,5% the following year.
Moreover, although the private debt has begun stepping back “only slightly” from the first quarterly, the real wages are decreasing despite the low inflation and considering the high level of unemployment the wage moderation will continue.
The study authors add that the demographic trends will influence the house prices, in particular, the decrease of the population to 2,6 million people in the following ten years as forecasted by the National Institute of Statistics (INE).
Along with Spain, S&P also anticipates a decrease in the value of the real estate this year in France (3%), in Italy (1%) whereas it forecasts an increase in Portugal (0,5%), Belgium (1,5%) and above all in Ireland (3,5), Germany (4%) and United Kingdom (5%).
In 2015, Spain will be the only country from those studied for which an increase is not forecasted, and once more the biggest increases will be in United Kingdom (5%) and in Germany (3,5%).