Spain's property market heading for second crash in a decade
June 24, 2020 - Spain
Spain's property prices are predicted to fall between 6.5% and 15% this year,as a result of the coronavirus pandemic.
Although it’s too early to make predictions regarding property prices, experts such as Barcelona University’s Economics Professor Gonzalo Bernado believes that “prices will have dropped by 12%,” by the end of the year.
Raymond Torres of Madrid’s Funcas think tank and Property Consultant Alejandro Inurrieta also predict declines of more than 10% this year.
Bloomberg analysts have revealed a direct correlation between levels of Covid-19 infection and declines in asking prices for homes.
Data compiled by Bloomberg from the Ministry of Health, the INE statistics agency and property website Idealista.com, reveal that Navarra and Castilla y Leon – two of the regions with the highest Covid-19 rates - “showed some of the biggest declines in asking prices” last month (May), compared to a year earlier.
Still, there are some indications that a housing market collapse won’t be as severe as in the previous crisis.
Prices for second-hand homes in Spain will fall 6% to 7% this year but bounce back much faster, said Miriam Goicoechea, head of residential and alternative research at CBRE in Spain.
“We don’t have an excess of supply that needs selling and neither do we have the levels of indebtedness that we saw in the 2008 crisis,” Ms Goicoechea said. “Those two factors will mean we’ll have a much faster recovery.”
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