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ARCHIVED - House prices fall in the regions of Spain worst affected by Covid
Analysts say this is hardly surprising and expect prices to fall further this year in the wake of the crisis
House prices in the Autonomous Communities of Spain which showed the highest incidence of coronavirus have fallen more than in other regions, according to experts analyzing current price trends in the Spanish real estate market.
Bloomberg has compiled its report using a combination of data from the Ministry of Health, the National Statistics Institute (INE) and the Idealista property portal.
Examples cited include Navarra which has lost -2.4% year-on-year, with an infection rate of 0.81% and Castilla y León -1.7% and with an infected percentage of 0.8 compared to the previous year.
n the case of Madrid, one of the worst affected in Spain, the price has decreased by 1.4% year-on-year with 1.04% percentage of the population infected.
In contrast, the Autonomous Communities with the fewest cases of infection per 100,000 inhabitants, which were Andalusia, the Balearic Islands and Murcia, saw house prices rise between 3.8% and 6% in May.
Economists consulted by the news agency believe that the Spanish real estate market is heading towards another crisis due to the impact of the coronavirus on housing demand, although Idealista believes that "there are some indications that the collapse of the real estate market will not be so severe as in the previous crisis ».
"Although it is early to estimate the consequences of this impact, there are data that point to a correlation between the number of people infected by coronavirus and the price of housing," according to Idealista, who also recalled that experts who analyze the market had originally forecast an upward movement in housing prices for this year of between 6.5% and 15% before the Covid crisis struck.
The portal believes that this recorded drop is “foreseeable” and follows in the wake of a 32% rise in the market since it hit its lowest point in early 2014, during the previous crisis.
However, the experts consulted by Bloomberg assure that no factor is as important for the price of housing as job growth and the economic outlook and for this year, according to the Bank of Spain, GDP could decrease by up to 15% in the worst case scenario and the unemployment rate could increase between 18.1% and 23.6%.
Last week data produced by both the notaries and National Statistics Institute pointed to a large drop in the completion of sales contracts during April caused by the Covid crisis.
