The price of housing in Spain is overestimated by 10% by the end of 2013 with respect to household disposable wages, according to the British weekly “The Economist”.
Spain leads with Italy ranking highest in the falling prices of most developed countries in the world, by index housing has fallen 5.3% in the last year and accumulated a 30% decline from the highs recorded in the first quarter of 2008. In Italy homes fell 5.9 % last year and 12.2 % from highs, and there are estimates that housing prices could drop another 10%.
When calculating the over-valuation of housing, the economist analyses data from long-term monthly rent and salaries. According to this classification, Hong Kong, New Zealand, Australia, Britain, Canada and Belgium would be among the countries with the most overvalued housing.
The evolution of housing prices in recent years
The housing price graph of the economist shows how Spain still remains the country where prices have risen more long term and despite the recent falls in the price of real estate, property in real terms would have increased by almost 30 times since 1975, when looking at the short term for example from 2006 shows how Spain is no longer the country with the largest increase in the world price.
Evolution of housing prices since 1975 in different countries
