According to the Times, the Spanish property market is about to burst. This leaves many sellers, buyers and property owners in an insecure position. What is going on? Is the real-estate market in Spain really about crash?
The Telegraph believes that there is no reason for any panic. In Spain the prices of the houses have been rising through the roof since 1997. Luckily, this increase is stabilizing. This leaves the market with more realistic prices than in the past, with advantages for both sides, chances for selling are higher and it will go faster and buyers pay reasonable prices.
According to the Spanish government the property inflation is slowing down from 18.5% in 2003, 17.2% in 2004, 12.8% in 2005, and 9.1% by the end of 2006. The first three months of this year the prices have increased with 7.2%. That is the lowest quarterly increase of the last few years. After the prices have grown with incredible rates in recent years, property prices are finally stabilizing.
The fact that the Spanish property market is over-provisioned cannot be neglected. Therefore there is a possibility that, in some isolated areas, the prices will slightly drop. But there is little chance that this decrease will occur in all of Spain. The prices of the properties in popular areas like the Costa Brava, Costa Blanca, Mallorca and Barcelona will most likely continue to grow because of their value– but more slowly than recent years.
Instead of heading towards an inevitable crash, the Spanish property market is preparing itself for a soft landing. Property owners and buyers around the areas mentioned do not have to fear a sudden depreciation of their properties, since these properties will hold their value in the future.