The Spanish housing market: are we in for a soft landing?

The number of new dwellings built in Spain more than doubled between 1997 and 2004. Provisional estimates indicate that the figure might currently be over 800,000. Strikingly, this impressive response of supply to demand has not put a brake on housing prices, which have also doubled in real terms during the same period. This country focus analyses developments in the Spanish housing market, based on the premise that the price of the property may not be the decisive factor in households’ purchasing decisions, especially if the acquisition is to be financed with a mortgage.