Spain’s Housing Bubble

Speaking about the housing bubble in Spain, you’re making reference to a particular situation in the financial activity and the values and the presence of a speculative bubble, which in this case is present in the real estate market in Spain , a situation that is showing since 1998 and despite the long passage of time even now remains. One of the main events that had the housing bubble in Spain has been a large increase in price levels, exceeding by far the consumer price index, which can be evidenced by the presence of sustained price increases in excess 10% per year and in times of greatest strength of the housing bubble in Spain we reach elevations that were very close to 30%, this increase is that prices were explained at the time of resorting to external factors such as speculation and the reclassification of salaries. Another samples were from the housing bubble Spain is the presence of a large number of real estate were built, which is accompanied by a similar amount of stock buying and selling, thanks largely to the occurrence of a credit that had a remarkable development. This real estate bubble in Spain, is one of the best explanations which can go to understand the behavior that has continued for a good time market in Spain and therefore represents a means to get a perspective on what may be the evolution of this market in Spain. With the concurrence of the bursting of the housing bubble in Spain, resulting in a precipitous drop in demand and prices the same way in the short term, an effect that has been generating since mid-2007 that would have the effect the departure of speculators from the market of real estate, because it has reached the maximum price per square foot, accompanied by a notable failure of the market to meet the huge supply of homes, not is a demand, what the market is in a difficult situation, not having a level close between supply and demand of housing. The arrival of the change of the property cycle, and therefore influence on the housing bubble, which occurred in Spain, had the fundamental cause, the crisis that occurred in the United States of America from sub-prime mortgages, a situation that led to the economic crisis of 2008. So the housing bubble in Spain causes major problems in regard to access to housing on the part of the Spanish population, as prices inflated greatly limit the opportunities to access home buying and equal so an increase in cases of rent, which affects a number of other people.