Tuesday, December 13, 2011

TINSA November 2011 Spanish Property prices continue to dive, sharply.

The valuation index TINSA fell at an inter-annual rate of 8%. The decline is accelerating and the graph is now starting to look like a classic price crash.

During the property crash in Japan in the 1990's property prices fell 90% from peak. That now seems possible in Spain.

The underlying reasons for the drop in price continue to force prices down:

The awful outlook in the Euro Zone and the wider global economy.
Spain's debt crisis, and corresponding austerity measures continue to suck money out of the economy.
The continued bad press of unresolved property abuse cases. (Hopefully the new PP government will offer some solutions to this).

The demographics of the buyers during the boom years is on the wane. Are there enough buyers to replace those who move on beyond this life?
Poor housing markets internationally mean there is less people buying and doing so with less money.
Increased repossessions continue.
Loan availability is in decline.
Banks have slashed their prices to keep pace with the decline.
The scale of unemployment in Spain continues to rise toward revolutionary levels.

There are a lot of negative feedback loops in this horrendous death spiral.

2012 could well be the apocalypse for the Spanish Property Market.