Spain’s residential property market in 2013 and beyond
There are some 2 million homes on the market in January 2013 and the only way to get rid of the glut of property in the medium term is selling at a loss. In our opinion we can only for see further falls, possibly another 15% pa for the next few years. The big question is for how long. At current levels of demand it will take up to 7 years to see a full recovery.
It appears that the coastal areas, where rushed apartments blocks and complexes have been built for the foreign market will take the longest to resolve.
The loss of the purchase tax breaks may force prices down further.
In our view, until local unemployment falls and bank lending levels improve the overall market will remain stagnant However, the prime and super prime market continues to be buoyant and is likely to remain the only active segment of the property market in Spain during 2013.