House prices in Spain will fall up to 30%

House prices in Spain will fall up to 30% in real terms within three years and the property sector faces at least two years of recession, said the head of one of Spain’s biggest real estate firms, Colonial, on Tuesday.

“I see very few short-term solutions in the property business,” Mariano de Miguel told a business conference organized in Madrid by savings bank Caja Madrid.

“The next two years are going to be very hard. We need to win time and to put on our hard hats because hard times are on their way,” said Mr. De Miguel – the first high-profile property executive to forecast such a steep fall in Spanish house prices.

His analysis of the state of the Spanish property business contrasted sharply with comments from other executives in the sector and Beatriz Corredor, the Housing Minister, who have played down the extent to which prices will fall.

According to the Housing Ministry, Spanish property prices have yet to fall, rising 3.8% in the first quarter.

Mr. De Miguel forecasts that within two or three years house prices would be “between 20% and 30% cheaper” in real terms.

Spanish property firms have said diversifying into the rental business and away from residential construction can shield them from the effects of slowdown in demand for housing.

Mr. De Miguel said the property rental business would also be hit.

“Assets are going to fall and a situation of empty properties is going to occur,” he predicted.

2 Responses to “House prices in Spain will fall up to 30%”

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  2. […] Spanish house prices dropped by 0.3 percent between April and June, while home sales fell 31.5 percent in the second quarter from last year, the Housing Ministry said earlier this month. […]

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