Spain will soon have more cheap property abroad

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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.