According to a report on consumers and the Spanish economy which has just been published by the Caixa Cataluyna, and contrary to other recent reports, housing prices in Spain are expected to rise by 15.1% in 2004 and by 9% in 2005. Last year the price of property in Spain rose by 16.6%.
The report also says that, given the fact that 85% of Spanish homeowners own all of their property compared to just 25% who are paying a mortgage, perhaps too much emphasis has been put lately on the financial load of buying a house in Spain. According to the bank, the fact that housing prices have risen so much in Spain in the last five years has actually had what they call a “wealth effect”, as homeowners here have seen their confidence rise with the increase in value of their property go up, and so they have consumed more goods as a result.
The authors of the report do not expect the property market in Spain to suffer a crisis in the near future, and they think there is no reason to expect demand for mortgages to fall either.
The report does not mention difficulties experienced by first-time house buyers in Spain. According to the 2003 annual report of the Spanish Economic and Social Council, a massive 34% of Spanish adults who are older than 30 still live with their parents, and the report claims that the main reason for this is high housing prices.