Spanish homes have reduced by 10% from their high of 2007 but it has been predicted that they will fall by another 20% by the end of 2012.A new study by the BBVA says that it is only then that they will stabilise.
The chief economist at BBVA has said that real estate prices have not yet hit the bottom.This assessment has been based on the large number of unsold houses in the economy.The bank places this figure at more than a million homes.
These units are not spread evenly throughout the country and price drops could be even more in areas where there are more unsold properties.One such place is Malaga Province.Once the market does stabilise then the bank forsees a demand for roughly 400,000 homes a year..In the boom years it was 600,000 homes a year,so it will be down by a third..The report thinks that during 2010 and 2011 interest rates will remain stable.
