Real estate sector: forecast for Spain in 2013
By Maria José Rubio, JC&A Abogados
The real estate market in Spain still has a lot of recovering to do.Demand is expected to remain low due to the lack of financing, and there will be a large stock of properties for sale. Recent studies show that, in spite of the continued price cuts, the sale of real estate will not pick up again until employment is generated because, realistically, employment is the factor that stimulates consumption. Generation of employment is not expected until the end of 2013, which means that the revival of real estate development and property sales will only start in 2014.
The current stock of real estate properties is in the region of EUR 850,000- 900,000, with a slow rate of reduction expected.
It is also estimated that the average house price will suffer an additional adjustment of approximately 6%, which puts the total collapse in prices since the start of the financial and real estate crisis at 22.1% nominal, and almost 30% in real terms.
Financial entities have indicated that the increase in the average variable interest rates applied to mortgages is the main factor contributing to the price drop.
The Spanish government has announced a set of measures which aim to change the current trend in the property market. Key points for this year will be as follows:
- Price slide.
- More and cheaper rental property.
- Sales decrease.
- Euríbor rates will stay low.
The above scenario leads to the following conclusion: the situation in the Spanish real estate market offers a unique opportunity for consumers or investors who have savings and liquidity and wish to take advantage of the reduced prices. It is a "buyers' market", especially in the Costa del Sol area, which is a prime European golfing and holiday destination where the estimated average growth (1% to 3%) offers rather optimistic expectations.
Maria José Rubio, Partner
Javier Carretero y Asociados Abogados (JC&A Abogados), Marbella (Málaga), Spain
T: + 34 952 924656
Maria José Rubio is a lawyer and partner of the law firm JAVIER CARRETERO Y ASOCIADOS ABOGADOS (JC&A ABOGADOS), based in Marbella, Málaga (Spain). The firm is specialised in the real estate market and is an active member of the Association of High Range Homes "DOM3", which purpose is the analysis, development and promotion of this sector in the Costa del Sol area.