Spain will soon have more cheap property abroad, according to the forecasts made Bankinter.

The financial institution has predicted that house prices will get even lower as Spain’s excess supply of housing is “very slowly” taken up by buyers. The number of properties currently on the market is estimated to be approximately 900,000, with 250,000 of those belonging to financial companies and banks continuing to repossess homes.

Sales slump due to unemployment

Bankinter predicts that the next two years will only see minimum demand for real estate due to unemployment and other economic woes. As a result, house sales in 2011 plummeted to just 200,000 – 55 per cent than 2007, according to Kyero.

The forecast anticipates a growth overall in the Spanish economy of 1.2 per cent in 2012, but this is still below the 2 per cent required to stimulate the jobs market, adds the Spanish property site.

New party, new rules

Developers are expected to reduce production levels to all-time lows, which should help to consume the thousands of properties still available for purchase. But the country’s recent General Election is providing some hope that the People’s Party will introduce enough changes to stimulate a gradual recovery.

Tax cuts and tourism measures are anticipated, as the government focuses on bringing back overseas investors to make up for the shortfall in domestic buyers. The country’s oversupply of discounted property in prime locations, such as the Costas, is hoped to attract enough interest to stimulate demand once again.

Spain is still popular with overseas buyers due to its climate and familiar culture. With VAT still halved until the end of the year and tourism figures for 2011 showing strong improvement, the further reduction in prices may be enough to start bringing international buyers back to the market.

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Author

  1. avatar
    Nick Marr

    I am an internet entrepreneur with a passion for driving big audiences and a love for real estate. I have had plenty of ups and downs which has given me the experience to help others launch their own businesses. I enjoy projects that save consumers time and money, challenge convention and add real value to peoples lives.