Thursday, January 20, 2005

Price of houses in Spain
It looks as if the prices of houses in Spain are at last starting to come down. Yesterday the Housing Minister, Maria Antonia Trujillo, said that latest figures published suggest that trends in the Spanish property market were starting to change.

However, Trujillo declined to make any concrete prediction regarding a possible drop in house prices, or to comment on the possibility that Spain may soon be experiencing the same sort of downward trend in property prices as that experienced by the real estate market in Britain. She measured her words very carefully - "It is true that certain figures (related to the property market) indicate change".

The other day El Pais newspaper published an article about the future of the property market in Spain. The article said that most of the factors which caused the massive rise in prices experienced by the Spanish real estate market some years ago, have largely disappeared:


- The market is getting smaller because, unlike in the past, today betweeen 82
percent and 90 percent of Spanish families are home owners

- Economic growth in Spain is slowing down

- Spain will soon cease to receive funds from the EU cohesion funds

- Spanish families are more in debt than they used to be, and have less and less
capacity for getting further into debt

- More houses are built in Spain than in all the other countries in Europe put
together (according to El Pais)

- There are more than 3 million empty new homes in Spain. Many of these may
come onto the market when their owners realise that prices are about to come
down, which will lead to an excess of supply and will further bring prices down.