José Blanco, began last week a road show in English through several European countries in search of investors. During the presentation, entitled "The Adjustment of the Spanish real estate sector" (the Spanish housing market correction), the minister stressed the strengths of Spain and its real estate market.
As seen in the paper, white highlights stes that Spain is a "strong economy that shows signs of recovery". " for what he shows graphs of gross domestic product (GDP) forecasts, compared against other European economies such as Italy, France and Germany"
Then José Blanco lists the infrastructure (airports, trains and highways) in our country, and the quality of life in Spain, chosen as a destination by millions of tourists annually
When defending the real estate sector, the presentation highlights the large amount of home ownership that exist in Spain (85%) compared to renting (13%) and how 67% of homes are for primary residences, compared to 33% of holiday. He also notes that housing is the main asset of the Spanish families.
prices
The ministry lists several reports before the outbreak of the housing bubble (between 2002 and 2007) to remember what was indicated at the time on the overvaluation of house prices in Spain. He concludes that the price reached a level of between 13 and 30%.
He also brings to the table a report of the International Monetary Fund from 2008, which justified the rise in house prices in Spain showing a minor component of overvaluation in other countries such as France, UK, Holland or Ireland). After that, he concludes that the residential sector in Spain has suffered the bulk of the adjustment, exemplified by the fall of the construction sector.
About the downfalls, the ministry advertises that housing prices in Spain have already fallen by 15.4% in nominal terms from their peak in the first quarter of 2008 and 20% in real terms (plus inflation).
On the other hand, says that according to rental prices, "there is little scope for further adjustments" to be near its historical average. in particular, point to settings between 3 and 7% to reach the average level of the period 1997-2010
According to data provided, the housing prices in Spain rose less than in other countries "but the setting is not proportional. therefore concluded that the "adjustment in Spain is still higher than in other countries " while accompanied by a graph of the price of new housing in Spain compared to UK and Ireland since 1996.
He afterwards bring right down his analysis at provincial-level, and explains how the price adjustment is to be different in different regions. In this sense, the collapse underscores that some municipalities on the Spanish coast, such as Marbella (-40%) and Menorca (-49%)
recovery
according to the presentation summary released by the ministry, house sales tend to recover due to tax incentives and accessibility indicators which are back in low ranges. He also highlights that foreign demand was "beginning to react to prices. " Here he explains how foreign home purchases have increased by 20% in Spain"
With respect to the stock, " will decrease from 700,000 homes at the end of 2010 to 200,000 in 2013". Catalunya, Valencia and Andalusia up 50% of unsold new homes, stand out. Madrid indicates that only 7.4% of unsold new homes which represents just 1.7% of the housing stock of capital.
in the latter part of the presentation, the minister Jose Blanco, adds that "investing in the Spanish property market is safe. " for it highlights the strength and the network of institutions that guarantee the happy ending of this economy.
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