Spain’s $6 trillion (Dh22tn) home market looks headed towards another crash, according to economists who are studying the impact on property demand stemming from Europe’s strictest pandemic lockdown.
While it’s too early to estimate the full dimensions of the blow to demand caused by the health emergency that flared up in March, experts who study the Spanish market say the hit to housing prices in 2020 could range from 6.5 per cent to 15 per cent.
"We're in the prologue of a decline that will only become apparent in September," said Gonzalo Bernardos, an economics professor who directs the real estate master's programme at Barcelona University. "By year-end, prices will have dropped by 12 per cent, because this is maybe the sharpest economic crisis we've had."
The looming crash comes after the Spanish market rose 32 per cent since the trough of the previous collapse was reached at the start of 2014. House-price declines are felt sharply in a country where home ownership approaches 80 per cent and savers tend to use property as their primary nest-egg.
Other observers who predict declines of more than 10 per cent this year include Raymond Torres, at the Funcas think tank in Madrid, and Alejandro Inurrieta, a property consultant and former economist at Spain's Economy Ministry. Fernando Rodriguez de Acuna, director of Madrid-based real-estate consultancy R.R. de Acuna & Asociados, predicts a 6.5 per cent drop.
The consultants say no factor is as important to house prices as job growth and the economic outlook. According to the Bank of Spain, GDP could shrink by as much as 15 per cent this year in a worst-case scenario while the jobless rate – already at 14 per cent before the pandemic – could jump to between 18.1 per cent to 23.6 per cent.
The data does point to a correlation between levels of Covid-19 infection and declines in asking prices for homes.
Navarra and Castilla y Leon, two of the regions with the highest infection rates, showed some of the biggest declines in asking prices in May, versus a year earlier, according to data compiled by Bloomberg from the Health Ministry, the INE statistics agency and Idealista.com, the largest property sales website.
By contrast the regions with the fewest cases per 100,000 population – Andalusia, the Balearic Islands and Murcia – saw home prices climb 3.8 per cent to 6 per cent.
Still, there are some indications that a housing market collapse won't be as severe as in the previous crisis. Prices for second-hand homes in Spain will fall 6 per cent to 7 per cent this year but bounce back much faster, said Miriam Goicoechea, head of residential and alternative research at CBRE in Spain.
"We don't have an excess of supply that needs selling and neither do we have the levels of indebtedness that we saw in the 2008 crisis," Ms Goicoechea said. "Those two factors will mean we'll have a much faster recovery."
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Starring: Nicole Kidman, Liev Schreiber, Jack Reynor
Creator: Jenna Lamia
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6.30pm: Handicap (rated 95-108) US$125,000 2000m (Dirt).
Winner: Don’t Give Up, Gerald Mosse (jockey), Saeed bin Suroor (trainer).
7.05pm: Handicap (95 ) $160,000 2810m (Turf).
Winner: Los Barbados, Adrie de Vries, Fawzi Nass.
7.40pm: Handicap (80-89) $60,000 1600m (D).
Winner: Claim The Roses, Mickael Barzalona, Salem bin Ghadayer.
8.15pm: UAE 2000 Guineas Trial (Div-1) Conditions $100,000 1,400m (D)
Winner: Gold Town, William Buick, Charlie Appleby.
8.50pm: Cape Verdi Group 2 $200,000 1600m (T).
Winner: Promising Run, Patrick Cosgrave, Saeed bin Suroor.
9.25pm: UAE 2000 Guineas Conditions $100,000 1,400m (D).
Winner: El Chapo, Luke Morris, Fawzi Nass.
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GOLF’S RAHMBO
- 5 wins in 22 months as pro
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JAPAN SQUAD
Goalkeepers: Masaaki Higashiguchi, Shuichi Gonda, Daniel Schmidt
Defenders: Yuto Nagatomo, Tomoaki Makino, Maya Yoshida, Sho Sasaki, Hiroki Sakai, Sei Muroya, Genta Miura, Takehiro Tomiyasu
Midfielders: Toshihiro Aoyama, Genki Haraguchi, Gaku Shibasaki, Wataru Endo, Junya Ito, Shoya Nakajima, Takumi Minamino, Hidemasa Morita, Ritsu Doan
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Price, base: From Dh77,900
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The biog
DOB: March 13, 1987
Place of birth: Jeddah, Saudi Arabia but lived in Virginia in the US and raised in Lebanon
School: ACS in Lebanon
University: BSA in Graphic Design at the American University of Beirut
MSA in Design Entrepreneurship at the School of Visual Arts in New York City
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Status: Single
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Where can I submit a sample?
Volunteers can now submit DNA samples at a number of centres across Abu Dhabi. The programme is open to all ages.
Collection centres in Abu Dhabi include:
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- Al Towayya in Al Ain
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- Bareen International Hospital
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Angelo Mathews (c), Upul Tharanga, Danushka Gunathilaka, Kusal Mendis, Dinesh Chandimal, Kusal Janith Perera, Thisara Perera, Asela Gunaratne, Niroshan Dickwella, Suranga Lakmal, Nuwan Pradeep, Dushmantha Chameera, Shehan Madushanka, Akila Dananjaya, Lakshan Sandakan and Wanidu Hasaranga
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Step by step
2070km to run
38 days
273,600 calories consumed
28kg of fruit
40kg of vegetables
45 pairs of running shoes
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COMPANY PROFILE
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Engine: 2.0-litre 4cyl turbo
Power: 261hp at 5,500rpm
Torque: 405Nm at 1,750-3,500rpm
Transmission: 9-speed auto
Fuel consumption: 6.9L/100km
On sale: Now
Price: From Dh117,059
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
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LIKELY TEAMS
South Africa
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India (from)
Virat Kohli (captain), Murali Vijay, Lokesh Rahul, Cheteshwar Pujara, Rohit Sharma, Ajinkya Rahane, Hardik Pandya, Dinesh Karthik (wkt), Ravichandran Ashwin, Bhuvneshwar Kumar, Ishant Sharma, Mohammad Shami, Jasprit Bumrah.
Ain Dubai in numbers
126: The length in metres of the legs supporting the structure
1 football pitch: The length of each permanent spoke is longer than a professional soccer pitch
16 A380 Airbuses: The equivalent weight of the wheel rim.
9,000 tonnes: The amount of steel used to construct the project.
5 tonnes: The weight of each permanent spoke that is holding the wheel rim in place
192: The amount of cable wires used to create the wheel. They measure a distance of 2,4000km in total, the equivalent of the distance between Dubai and Cairo.
The specs: 2018 Nissan 370Z Nismo
The specs: 2018 Nissan 370Z Nismo
Price, base / as tested: Dh182,178
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The flights
Flydubai offers three daily direct flights to Sarajevo and, from June, a daily flight from Thessaloniki from Dubai. A return flight costs from Dhs1,905 including taxes.
The trip
The Travel Scientists are the organisers of the Balkan Ride and several other rallies around the world. The 2018 running of this particular adventure will take place from August 3-11, once again starting in Sarajevo and ending a week later in Thessaloniki. If you’re driving your own vehicle, then entry start from €880 (Dhs 3,900) per person including all accommodation along the route. Contact the Travel Scientists if you wish to hire one of their vehicles.
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