The global credit rating agency, Standard & Poor’s (S&P), has announced that they believe that homes in Spain are still overvalued by between 9% and 18% compared with the level of household income. Although housing purchases by foreign investors rose by 10% in 2013, home sales actually fell by 27.5% in 2013.
Unemployment, the high stock of unsold homes and the difficulties in accessing credit are the main factors that jeopardize the prospect of a sustained recovery in Spain’s housing prices.
2013 saw the Spanish population decline for the second consecutive year, down to 46.7 million, due to the exodus of foreigners from the country. Specifically, 545,980 foreigners decided to leave Spain last year,
The S & P report also predicts the possible loss of 2.6 million of the country’s population over the next decade, and warns that: “a collapse of the population would clearly limit any increase in demand for housing in the next decade”.
This message was last edited by Woodbug on 08/05/2014.