2012: Prices Will Go Down, There Will Be More Apartments On The Market And Rent Rates Will Rise Due

The beginning of the New Year is showing good signs for the Spanish real estate market

, which will now be summarized.

- The first effect of the financial reform that will impact the banks' real estate stock will be to generate trust in the international market. Up until now, foreign investors have been very cautious about Spanish real estatebecause they don't believe the current level of property prices in the country is at true market value.

- The second effect will be for housing sales to increase on the Spanish market. This will rise due to the fact that there will be more dwellings for sale on the market.

- Another effect desired, in part by popular demand, will be the reduction of prices to the true value of the real estate market. This reduction of prices will begin to take shape this year, beginning over the next few months, yet investors and potential buyers are not convinced that the prices will be reduced greatly or immediately. It's more likely that there will be a gradual decrease that will extend over a certain period. But in general terms, the price of dwellings will definitely be on the decline this year.

- There will be one effect in the reduction of prices that will catch on as a result of the price adjustment policies applied by banks to private homeowners. A homeowner that wants to sell their home will have to lower their price to be competitive, since real estate stock has been lowered.

- With respect to the banks' policies of mortgage grants, there are some agencies that only give mortgages for their own properties, and then there are others that sell their apartments with a significant discount. However, the buyers are told to settle mortgage payments with banks, not with the real estate agencies themselves.

- A word of advice: While looking for a home to purchase, buyers should thoroughly explore the market, because a large quantity of good properties is beginning to pop up.

A study by the Spanish bank BBVA regarding the duration of the crisis: The adjustment will take two more years

BBVA affirms that the real estate sector will continue with the adjustment process over the next two years (until 2014), and warn that "there will not be a reactivation period until the job market improves". This was indicated during a recent press conference with those responsible for BBVA Research, the study group created by the financial entity, during the presentation of the latest report by "Situacin Espaa" (Situation Spain). In this same report, it was stated that real estate investment will be reduced by 6.5% in 2012 and by 1.5% in 2013.

The rent market grows

The rent market continues to benefit from the crisis, and the rise will also continue in 2012 along with collection guarantees, according to a study done by the Association for the Promotion of Rent and Access to Housing, Arrenta.

The forecasts done by this company, which specializes in leases, calculate that the number of rentable dwellings will increase by two points in 2012, which would place the percentage of families living in leased apartments at 20%. This increase will continue, according to the forecasts done by Arrenta, during the next few years, before achieving 25% in 2015.

by: April Shoemaker

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