Housing market will stabilise this year, says FUNCAS

The Savings Banks Foundation( FUNCAS ) estimates that throughout this year the real estate market could stabilize in both sales and prices, which will help accelerate the process of absorbing the surplus of unsold homes but emphasises that the reduction of stock will not be homogeneous.

In its latest economic report, FUNCAS notes that the stock will remain very high, and thus investment in residential construction will continue receding, albeit at a slower pace. It also adds that it is possible that in regions where the surplus has been lower this absorption process is likely to be more advanced, so that in some areas residential investment may be close to bottoming out.

The document also highlights a report from the IMF  on transferring the properties to SAREB, saying this was a major milestone in the consolidation process and has speeded up the adjustment of housing prices.

Ultimately, the agency estimates that 2014 may be the year where Spain’s housing market finally stabilises and we will start to see a tentative recovery in credit and job creation, but it will also  be the year in which the public debt will exceed the barrier of 100 % of GDP

Evolution of GDP percentage in Spain:

Yet another ‘expert opinion’ by an interested party predicting when the Spanish housing market will stabilize. The Housing Department (Fomento) The Notaries and the NIE along with other property registers all publish ‘official figures’ yet they are worlds apart. If there was one set of reliable data released it may be more credible. Unfortunately this won’t happen as the various department and organizations don’t share data or communicate with each other.

This week Tinsa, announced that the excess housing stock will be absorbed by 2017 indicating that the dire situation we are in will correct itself in the next couple of years! Wasn’t Tinsa a major contributor to the mess we are in as official valuers to Spanish banks? During the heady years didn’t they place crazy values on thousands of poorly built homes that subsequently found a much lower level and are arguably still falling? (The prices that is – not the houses)

Where are these hundreds of thousands of buyers with cash filled wallets coming from?  With high unemployment, low wages and absence of mortgages, coupled with an unpredictable Spanish government it makes it unlikely that very much will happen by 2017 and certainly not with much input from Spanish nationals unless there is change - and fast.