22/12/2014 – Bolsamanía
The sector’s size has shrunk from 12% to 4% of GDP
Housing price may not have reached rock bottom yet. According to a study commissioned by the Swiss bank UBS, the price adjustment in the housing market for 2015 may vary between 5% and 8%. The report states that the improvement will be “weak and unequal,” although it is detecting signs of recovery in the real estate market.
Housing market recovery – slight, slow and unequal
UBS considers the housing market recovery ‘‘slight, slow and unequal’’. In its report on the Spanish economy, cited by Idealista, the bank mentions that issued home building permits totalled less than 34,000, compared to 865,000 back in 2006.
It also points out that the number of dwellings currently being built had plummeted down to 37,000 units back in 2013. It also highlights almost two million jobs have been lost in the sector and its relative importance has gone from making up 12.5% of GDP down to only 4% at present.
UBS also points out the discrepancies between official public figures and estimates of private financial institutions. While official authorities speak of a 30% fall, the rest move it up to 40%.
Furthermore, the Swiss bank estimates the price adjustment process will go on throughout 2015. Moreover, it highlights that on average a price decline between 1% and 3% nationwide over the next period will turn up in data from real estate agents. The decline will be higher in official statistics which calculate that the average housing price decrease in Spain will fluctuate between 5% and 8% over the next year.
Original article: Bolsamanía
Translation by Aura REE