Spain’s Housing Market Heading For ‘Another Crash’ Confirm Property Experts

Spain’s housing market – from the Costa del Sol to Costa Blanca – is heading for another crash, according to property experts. 

PROPERTY analysts predict declines of 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, as the country is still reeling from the impact, 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, in fact, 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 (per 100,000 residents) –  “showed some of the biggest declines in asking prices” last month (May), compared to a year earlier. However, regions with the fewer infections, such as Andalucia, Murcia and the Balearic Islands, actually “saw home prices climb 3.8% to 6%”, according to Bloomberg data.

On a positive note, many experts believe that this year’s property crash won’t be as severe as the last one. Given that the country does not have an “excess of supply that needs selling and neither do we have the levels of indebtedness that we saw in the 2008 crisis,” Spain will have a “much faster recovery”, stated CBRE’s Head of Residential and Alternative Research, Miriam Goicoechea.