Spanish property prices to fall by a further 50%

The Olive Press ^ | 14 January 2013

[Lorianne]

SPANISH house prices could drop by a further 50% and may not recover for the next 15 years, according to experts.

The Costa del Sol is among the worst affected areas in the country, with the total fall in values predicted to be as much as 75% in some areas.

There are 800,000 used homes on the Spanish property market, with another 300,000 having been foreclosed by the banks and a further 150,000 in foreclosure proceedings.

What’s more, developers have 700,000 completed units not on the market and another 250,000 still under construction.

“The market is broken,” said Fernando Rodriguez de Acuna, vice-president of Spanish economic consultancy RR de Acuna & Asociados.

“In places like Castellon, near Valencia, where over-development was mad, banks are not financing anything and there is a high probability these properties will never be sold. They will have to be knocked down.

“Banks are offering huge discounts and nobody is calling. Marbella has already fallen by 50% and prices are going down and down.”

[RegulatorCountry]

If there are people to reside in them, there is a floor to the decline, that being comparable rents. Servicable, practically new, completed structures for less than the cost of materials is a major anomaly that will represent an opportunity for the brave soul with the nerve and the reserves to buy. Government-related expense could drive it down further still, but an equilibrium will be found where demand for shelter exists. If any razing occurs, it will be decrepit, neglected older structures that are basically “totalled” to borrow an automotive insurance term, more expensive to repair than their worth on the market.

[SuziQ]

If someone had the cash, it might be a good time to buy a vacation home in sunny Spain.