Foros de la Plataforma por una Vivienda Digna

[billy]

Spain Housing Market Slump to Lead to Recession, Acuna Says

The slump in the Spanish residential property market will continue for seven years and push the economy into recession in 2009 as the market absorbs the excess housing stock built in the past decade, according to R. R. de Acuna & Asociados, a real estate research firm.

``For the market to return to normal, we estimate that there will be four years of severe corrections and another three years of consolidation,'' Fernando Rodriguez de Acuna, president of Madrid-based Acuna & Asociados told reporters today. ``The correction will have serious repercussions on the economy and we will be in recession by 2009,'' he said.

Spain's slumping residential real estate market led the government to cut its forecast for economic growth this year to 2.3 percent from the 3.1 percent predicted in December. The economy expanded at the slowest pace in almost 13 years in the first quarter.

Acuna & Asociados estimates that the economy will grow between 1 percent and 1.7 percent this year before slipping into recession, or two consecutive quarters of economic contraction, next year. Acuna forecasts a contraction of between 0.3 percent and 1.2 percent in 2009 as annual housing starts drop from a peak of 700,000 in recent years to 156,000 in 2009. The International Monetary Fund forecasts the Spanish economy will expand 1.7 percent next year.

Construction Employment

Around 700,000 building jobs will be lost this year and next and it will be ``extremely difficult'' for the rest of Spain's industries to absorb those workers, Acuna said.

From 2001 to 2007 Spain built more than 29.2 percent of new homes in the European Union in a country that represents only 11 percent of the EU population. The boom led to an excess supply ``never before seen in any western economy,'' Acuna said.

The research firm estimates that there are currently between 1.6 million and 2.7 million unsold homes in Spain and annual demand for housing a fallen to 345,000 units.

Home sales fell 39 percent on the year in March, according to the National Statistics Institute. In the same period the number of permits granted for new homes, extensions and refurbishments dropped 70 percent from a year earlier, Spain's Public Works Ministry said on its Web site last month.

To contact the reporters on this story: Sharon Smyth in Madrid at ssmyth2@bloomberg.net.

http://www.bloomberg.com/apps/news?pid=20601206&sid=a9JK9sWF_mOQ&refer=
_________________
40 propuestas por una Vivienda Digna