Valencia Property Expert Predicts Price Falls to 2011 & a Boom from 2020

Added: (Oct 2009)

Valencia Property Expert, Mr. Ignacio Jimenez de Laiglesia has predicted continuing price falls in the Spanish property market until 2011 with a return to an ever cyclical property boom beginning in 2020. Mr. de Laiglesia who is a shareholder and partner in the Valencian Property Strategy & Negotiation Company that bears his name predicts further property price falls of 15% equalling falls of 15% from the property price peak attained in the 2 nd quarter of 2007 when prices reached a high of €2,861 in Valencia city.

As of today ( October 28 th ), the average asking price of property in Valencia city according to Spain 's no. 1 property website “Idealista” is at €2,605 which represents a fall of 9% from the peak in Valencia city property prices yet an increase of 6.15% this month from the end of September price of €2,454 according to Idealista's 3 rd quarter report for the year :

http://www.idealista.com/pagina/informacion

In the opinion of Mr. de Laiglesia, the average price per sqm of property in Spain needs to drop to €1,812 before the market can recover.

He cites the dot com explosion as the beginning of the boom, bringing with it increased liquidity, easier access to property and an increase in wealth which allowed people to acquire property without the necessity of overburdening themselves with debt which with time lead to an excess in demand until this was more than met leading to an oversupply of property by 2007.

Both local and national observers of the property market in Spain would also add the introduction of the Euro as an additional cause of the boom due to the huge amounts of hot money (pesetas) which was taken out of bank accounts and ploughed into property before the changeover took place.

As we all now know, the subprime crisis in the U.S. was the match that started the conflagration which is still raging with no sign of ending any time soon.

Mr. de Laiglesia sees the financial institutions as the key to the solution as once they have divested themselves of the bad property loans they have on their books and the ones that they have yet to receive, only then can the sector move forward and embrace a better future. He asserts that developers need to drop prices ruthlessly if they are to clear their backlog of unsold properties and if they are unable to do so due to their mortgage arrangements with their banks they should then return the keys and let the banks take the hit as only they can.

However the banks, unlike in the 90s when inflation was at rates of between 7 and 8% when they were offloading their bad property debts thereby allowing them to do so much cheaper than at present when we are in an era of deflation.

Valencia city property which is being bought at present is being acquired at discounts in the region of 20- 30% off the asking price.

Therefore whether it is “Valencia City Property” or “Valencia F1 Property” that you need : Valencia's Premier Property Search and Property Investment Company, “Valencia Property Hound” should be your first port of call.

Article by Dermot Quinn, Valencia Property Hound Ltd