Analysts at the rating agency Moody's state that several factors have a negative impact on the Spanish property market. Among them are oversupply and lack of demand due to macroeconomic, fiscal and demographic factors. In this regard, housing prices will decline for several years.
Experts argue that the decline in demand is due to the fall of the number of young buyers. And the statistics say about the aggravation of the situation, since a group of young people aged 25 to 35 years, of which the majority of potential buyers of the first real estate drops significantly in the next 10 years.
It is also noted that the Spanish youth prefer to emigrate because of the worsening of the unemployment situation. Also the VAT increase on the primary housing and the abolition of tax rebates when buying a primary residence adversely affect the market .
To top it all, the problems in the housing market have led to a decrease in the number of mortgage loans by 85% compared with 2005.