Spain’s property slump will deepen for much of the next decade, and tracts of buildings along the Mediterannean coast will have to be demolished, the country’s top consultants have warned.
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“The market is broken,” said Fernando Rodríguez de Acuña, the group’s vice-president. “We calculate that there are almost 2m properties waiting to be sold. We have made no progress at all over the past five years in clearing the stock,” he said.
“There are 800,000 used homes on the market. Developers are sitting on a further 700,00 completed units. Another 300,000 have been foreclosed and 150,000 are in foreclosure proceedings, and there are another 250,000 still under construction. It’s crazy.”
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The government says the housing market has already “touched bottom” after falling 30pc since 2008, even though premier Mariano Rajoy admits that there will no economic recovery until 2014.
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As a member of the eurozone, Spain no longer has the monetary levers to engineer a soft landing for “nominal” house prices. This makes it much harder to break the vicious cycle of debt-deflation. The property sector and the banks are each dragging the other down. The share price of nationalised Bankia fell 14pc on Thursday after the authorities said the lender is worthless, with “negative value ” of -€4.2bn (-£3.5bn).
Full article: Spain’s house prices to fall another 30pc as glut keeps growing (The Telegraph)
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