20 Jun 2007 3:48 PM:
while the market has had a major recent correction and is softening, as you indicated, that is still coming off a strong base, ie the "reduction" to 500,000 homes still shows quite a strong demand and secondly, the overall population has been growing at about 2.1 % (2005) and the immigration is still coming, albeit perhaps at a slightly reduced rate.
May 29 El Pais ran an article about a recent meeting of ASPRIMA (Assoc de Promotores Imobiliarios) for the upcoming Salon Imobiliario de Madrid.
Galindo (president ASPRIMA) identified 3 growth areas : young first homers, low income and immigrants who have settled in Spain.
Some notes from the article:
De-accelaration in rate house prices are rising:
2007 down 3%
2008 stagnation
2009 less 1% negative
New homes "down" from 700,000 to 500,000 in 2008 (but still half a million new homes to built and supposedly sold which indicates a strong demand fo 5 to 7 years)
Spain's current 4 million immigrants represent 4% of total workforce. Influx is dropping but nevertheless could contribute some 100,000 new homes on top of the 500,000. Fewer immigrants means lower unemployment rate
Mortages getting longer in attempt to manage 'soft' market correction and aim at 3 market segments mentioned above,
You can now get a 40 yr mortgage with some banks or Immobiliarios such as Metrovacesa, promising to drop 2 points below Euribor in Year 1
Nevertheless a mortgage of 150,000 will cost over 800/month
I accept that the news has been alarming for Brits holiday homes where ther is a glut but no one can really pretend to be that surprised. We have been eating dust for the last 2 years all over the Costas... Nevertheless I still think a medium-term view of specific types of development offer good opprtunities.
Ojala!!!
Thread:
'Bubble' fears hit Spanish property
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