Good moment to buy property in Spain

The Minister for Housing, Beatriz Corredor, has stated that ‘now is the right time’ to buy a flat given that prices are now rising in line with the rate of inflation. She also asked property promoters to ‘adjust’ their offers to meet the needs of buyers.

During an interview with TVE, Corredor pointed to the fact that some property promoters had lowered their prices as a clear indicator that ‘now is the right moment to buy a flat or house’ for those people who really need to although this might not be the case for those people thinking about acquiring a second residence.

Alter confirming that houses and flats are now rising in line with the official rate of inflation Corredor explained that currently there are 600,000 empty houses and flats in Spain compared to a demand for around 450,000. In her opinion this situation has led some promoters to adapt their offers to the demands of the market.

This is partly why Corredor believes that the property market needs to readjust itself.

She firmly supports the model of what she calls ‘intense’ construction based fundamentally on renovation compared to ‘extensive’ construction which has developed previously unused land over recent years.

She also said that given the present situation the construction of 600,000 houses and flats per year was unsustainable, she also added that the 18% contribution that the construction sector made to GDP was much higher than desirable for a country like Spain when in the US the construction sector contributed around 12% to GDP.
Corredor recognised that the current economic slow down and financial crisis, together with the rise in interest rates, had caused some families difficulties when trying to buy a house or flat or meet their mortgage repayments.

Nevertheless, she said that the government had approved measures to lengthen the terms of repayment with regards to mortgages and to help young people become more independent.

Corredor also said that those people who could not afford to buy their own property should rent that the government was aiming to make 40% of all new subsidised housing over the next 10 years available for rent only.

In a recent statement to the press the Spanish Association of Investment Advisors and Finance (AIF) said that it is essential for a guiding price to be placed on properties and to reduce costs for consumers to end the lack of confidence in the property market, which is one of the biggest problems for the economy at present.
According to these experts a guiding price would facilitate access to finance given that banks and other financial institutions are now unwilling to concede mortgages for more than the total value of a property over a 50 year period.

Members of the association underlined the need to work with professional advisors because a significant number of people who could not meet their mortgage repayments had been processed by people who had not considered the most elemental rules of risk assessment.