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8 January 2004
MADRID – House prices in Spain rose by more than 15 percent in 2003, according to a survey published Thursday.
The rise is double that in most other wealthy European countries, where house prices went up on average by seven percent last year.
The averge price of new flats or homes in large cities in Spain rose by 15.8 percent in 2003 according to a survey for the Estimation Society.
In comparison, the Study of the Market of New Homes found the average price of homes went up by 14.7 percent in 2002.
The society said 2003 saw the biggest hike in house prices since 1999, when prices went by up by 25.7 percent.
Houses and flats are now more than five times what they cost in 1985.
Rodrigo Rato, economics minister and vice president of the government, ruled out the possibility that house prices could fall this year.
He said prices will go up but not on the same scale as 2003.
Rato also said during a press conference Thursday that house prices should stay stable in the next few months and any increases will be more moderate.
He put this down to people putting their money into other types of investment like the stock market.
Rato attributed the sharp rise in housing to the strong demand for homes throughout Spain.
He added: “If we did not have this problem of demand, we would not have this problem of prices.”
The rise in house prices comes amid claims that many young families now find it impossible to afford homes of their own, particularly in larger cities like Barcelona and Madrid.
They point to rising demand and foreigners buying homes in Spain and pushing up prices.
But Rato rejected the suggestion that Spanish families have problems affording a first home.
He said the capital of the average Spaniard had doubled in recent years– giving them more opportunities to invest in homes.
Rato also said that Spaniards were helped by the ability to get longer-term mortgages and lower rates of borrowing.
However, he admitted this had provoked a rise in the demand for houses which was not accompanied by an increase in the numbers on sale.
[Copyright EFE with Expatica]
Subject: Spanish news