Insurance News Archive
Price fall in Spain likely due to overdevelopment
Too much development in the Spanish property market could lead to a fall in prices, an expert has warned investors.
Remi Gashi, mortgage consultant at Savills Private Finance, said the country needs to look to Switzerland as an example of how to control the market.
Almost one million permits have been issued for new builds in Spain, unlike Switzerland where there is an allocation of permits which restricts how much people are allowed to buy.
Mr Gashi said there needs to be tighter control and regulation in Spain as permission has been given for "millions of properties" with no demand for them.
He continued: "If they continue oversupplying, then eventually the prices will be pushed down."
A report released this week by Datamonitor has revealed Spain's housing market is in reverse.
It said this has had an impact on the Spanish economy, as housing accounts for ten per cent of the country's gross domestic product and 13 per cent of its jobs.
23 May 2008
