According to a recent study published by the Bank for International Settlements the baby boom from the 1960’s onwards contributed to inflating house prices in developed countries all over the world. However, it predicts that the progressive ageing of the world’s population will push prices in the other direction. Furthermore, it predicts that Spain and Portugal are the two developed countries which will suffer most from this effect over the next 40 years.

The bank, which has its headquarters in Switzerland, estimated that real price of properties in Spain will fall by around 75% until 2050 due to a neutral demographic situation. The only other country where it forecasts a greater fall in house prices is Portugal where it says prices will fall by more than 80%. After Portugal and Spain Germany is next on the list will a predicted fall of 75% and then Italy with a fall of 70%. The country which the study predicts will see the smallest fall is Switzerland where it predicts that property prices will fall by just 16%.

The Bank for International Settlements explained that it can not calculate the real price of properties around the world but only the effects of the demographic impact on prices. However, the study also demonstrates that between 1970 and 2009 house prices rose by around 300% in Spain during a demographically neutral period.