A recent study on the estimation of needs and housing prices in Spain, carried out by IESE Business School’s Professor of Financial Management, José Luis Suárez, estimates that 140,000 new homes will need to be constructed in Spain each year up until 2025, when the price of housing will return to 2007 levels.
Suárez estimates that the Spanish real estate market will need an average of 100,000 new homes annually until 2020, and that from 2020 to 2025, the demand will stabilise at around 140,000 homes per year.
Between 1991 to 1997 the construction of new housing in Spain averaged at around 250,000 dwellings annually; between 1998 to 2007, an average of 580,000 new homes were built in Spain each year; and from 2007 until 2014 the construction of new housing in Spain fell to around 75,000 homes annually.
Also, the study estimates that the price of new housing in Spain will return to 2007 levels by 2025, 18 years since the onset of the crisis, with the price of housing in Spain reaching 2,046 euros per square metre in 2025, rising to 2,212 euros per square metre in 2027.
The year-on-year variation in housing prices reached 19% in 2003, and its lowest point was registered in 2012 with a decline of 10%. The highest prices were recorded in 2007, with 2,062 euros per square metre, while in contrast that price fell to just 1,400 euros per square metre in 2014.