Trends Carlos Diaz Guell .- The progressive differences in the housing market has begun to observe between different provinces, both in demand and supply, has been the most important of the last few months and it allows analysts to point out that it will not be necessary to an absorption total market imbalances to start seeing a recovery in activity, as there are areas where the market will require new investment, compared to others who may remain depressed for a few years. Residential demand in 2010 was heavily distorted by the VAT increase and the elimination of the tax deduction for home purchase in January of this year, which caused an anticipation of purchases that led to an increase of 6% transactions. Still, the momentum was reflected mainly in the used housing segment which grew 18% year on year, while the new house came back to record a fall (-17.1%), reaching 199,000 in purchases.
This has made during the year only has reduced the stock of newly built houses for sale, because, although initiation has recorded a record low (91 662) during the year, 198,000 have left the housing market .
According to the latest official figures and estimates as to the provincial distribution is concerned, it is found that 32 provinces have recorded increases in the number of transactions compared to 4 in 2009 and none in 2010. In 15 provinces there have been increases in the price of private housing, while in 5 of them have begun to see an uptick in the number of new work visas.
Despite all this, no conditions exist for 2011 to be a year of reactivation of the market, mainly because:
TRENDS is an online publication of limited distribution-edited by Carlos Diaz Guell
This has made during the year only has reduced the stock of newly built houses for sale, because, although initiation has recorded a record low (91 662) during the year, 198,000 have left the housing market .
According to the latest official figures and estimates as to the provincial distribution is concerned, it is found that 32 provinces have recorded increases in the number of transactions compared to 4 in 2009 and none in 2010. In 15 provinces there have been increases in the price of private housing, while in 5 of them have begun to see an uptick in the number of new work visas.
Despite all this, no conditions exist for 2011 to be a year of reactivation of the market, mainly because:
- The evolution of the labor market will keep the expectations of depressed household incomes.
- The accessibility of home purchase is going to be significantly impaired by the tightening of monetary policy, it is envisioned that the Euribor will increase by 110 basis points over the year), the repricing of risk policy of the institutions and the elimination of the tax deduction, which in an environment of very modest income growth will mean a greater effort (6 points of family income) for those who want to buy a home.
- The anticipation effect that was experienced during 2010 was reflected in lower demand during the year.
- The provision of financial institutions to dispose of its land, pressed the house prices down in 2011. As a conclusion, it is expected that any reduction
TRENDS is an online publication of limited distribution-edited by Carlos Diaz Guell
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