House prices ‘must not rise more than 10pc’

2 March 2004

MADRID – House prices in Spain must not go up by more than 10 percent this year, according to a report released Tuesday by one of the country’s biggest estate agents.

If prices did rise higher, it would destabilise the market.

In a report by estate agents Grupo, analysts predicted that it would not be possible to repeat the 19.5 percent rise in house prices in 2003.

Agustín Ferrer, of Grupo, said the price of houses had risen in parallel with those of flats.

He added: “The maximum reasonable rise in 2004 is 10 percent as a national medium.”

Ferrer said the housing market should rise higher than the national average, possibly by up to 15 percent this year.

He said if prices rose higher than 10 percent it would stop the “rhythm of sales” as the market would react against these increases.

This would mean that houses would remain unsold if prices were too high.

The profits for estate agents who would also fall.

Ferrer added: “I don’t think we should reduce these margins for sales, otherwise we will be left with queues of unsold homes.” 

[Copyright  EFE with Expatica]

Subject: Spanish news