Spain’s Housing Stock Depreciated 1.1 Billion Euros in 4 Years
February 8th, 2013
The Spanish housing stock has depreciated 1.1 billion euros in the last four years, from 5,713 billion euros to 4,600.9 billion euros, or 19.5% less, and, according to a study by the appraiser Euroval, in this period the net balance of housing has increased by one million units.
The report reveals that in this period the housing stock has increased by 4% and its value has been reduced by 20%, with Madrid being the region where housing has depreciated most (by 25%), and Extremadura where it has depreciated least (by 7.4 %).
El Mundo reported that, according to the study, between 2011 and 2012, Spanish properties as a whole have depreciated by 7.42%.
“Housing wealth is very relevant to economic decision-making and affects the capacity for borrowing, saving and consumption,” the report says. The equity increase in Spain is not mainly due to the number of dwellings, but the prices, because the value grew annually at rates in excess of 20%, while the number of dwellings grew at a similar figure (24%) for the entire decade.
1960: 4 people per household
The analysis starts with an initial reflection: “In 1960 there were four people per household, this ratio currently is 1.8”, and provides details of how the housing stock has evolved in the last decade, and its value in each of the regions.
“Between 1960 and 2000 construction growth rates were very strong to alleviate the secular infrastructure deficit of the country, compounded by the Civil War,” says the report. In that period, the housing stock grew 36% in the 60s, 15% in the 70s and 80s, and 39% in the 90s, due to the boom in the construction of first homes.
But in 2000, said the report, construction took off again, with an increase of 24% in ten years, reaching the ratio of fewer than two people per household.