Spanish market on the brink of crisis
The Spanish real estate market, a significant portion of which is accounted for by wealthy foreigners, is on the brink of crisis. According to the British newspaper The Daily Mail, just in the last week of April, shares of five leading local development and real estate companies fell sharply, and traders began to sell them en masse. Experts cite market oversaturation as the main reason for the decline.
Over the past ten years, Spanish property prices have risen by 270%. By the end of 2006, growth rates were slowing as developers lowered prices on homes in popular coastal areas while increasing construction volumes. In late April, according to a government report, the rate of price growth for real estate was the lowest in nine years.
In 2007, the country plans to build 800,000 new homes, mainly frame houses. This is a third more than last year's figure. The average cost of a home in these areas is 300,000. In the rest of the country, property prices are about half that.
Spanish villas are one of the most attractive residential assets in Europe. According to researchers from Savills Research, Spain and France account for 56% of all British transactions in foreign real estate. In total, Britons own 250,000 homes in Spain. The popularity of this country compared to the younger markets of Croatia and Bulgaria is explained by the lack of difficulties in registering property rights.
Homes in the US fall sharply in price
In February 2007, US home prices fell by an average of 1.5% compared to January. This is the sharpest drop in home values in 13 years, reports MarketWatch.
In 20 major US cities in 2006, home prices fell by one percent. Real estate dropped the most in Detroit, Boston, and Washington. The decline in property prices leads to borrowers who took out mortgages being unable to refinance and becoming bankrupt. The peak in home prices was recorded from October 1989 to January 1998. Since then, home values have been gradually falling.
Recently, statistics on existing home sales in the US were published. According to a study by the National Association of Realtors, from March 2006 to March 2007, investors bought only 6.12 million homes, which is 8.4% less than in February. The current level is the lowest in four years.
Average British home price exceeds 100,000 for the first time.
The average price of a British home in every city in the kingdom exceeded £100,000 (about $200,000) for the first time. This is reported by The Independent, citing a study by Halifax, the country's largest mortgage company.
Halifax studied the market in 489 cities in the UK. The last town where the home price exceeded £100,000 was Lochgelly in the Scottish region of Fife. There, a home costs an average of £104,738. For the first time, the ten cities with the most expensive homes over the past 12 months were in Northern Ireland. In the first quarter of 2007, the average home price there crossed the £200,000 ($400,000) mark.
As researchers note, housing in 99% of cities is too expensive for first-time buyers. For example, an English nurse on a standard salary cannot afford to buy a home.
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