Property prices in Spain may fall by up to 50 per cent in coming years
Property prices in Spain may fall by up to 50 per cent in coming years
Spanish property prices could fall by up to 50 per cent in a few years. Developers are being encouraged to discount properties now to minimise losses in the near future.
Developers of
property in Spain should reduce their asking prices by up to 35 per cent now, Javier Ortiz from Spanish developer
Grupo Inmo told the financial news website elconfidencial.com.
Ortiz clarified his stance: "Those who don't sell for 25 to 35 per cent less [will be hit] by an extra problem:
financial costs (mortgage interest and new re-financing deals) of seven per cent on 80 per cent of the cost of the property. That means an additional [annual] cost of 5.6 per cent."
If
property prices in Spain are not reduced now, sales will fall and developers will soon find themselves in a problematic situation, Ortiz continued.
"After two or three years the developer will have older homes [that are] 17 per cent more expensive, which means having to sell for 42 to 47 per cent less in real terms."
Grupo Inmo has reduced the prices of
apartments in Madrid by 30 per cent and has experienced a significant increase in demand.
"Just by putting up billboards on site with the new prices we have got 320 people on the waiting list," explained Ortiz.
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