The price of housing in Spain is not overvalued in the eyes of the Bank of Spain. Moreover, it does not see it "away from its equilibrium value" , although it asks for a "close follow-up" of its evolution as it is a sector with great relevance for the progress of the economy and that can "cause financial risks" .
The banking regulator has published on Monday an analytical article on the recent evolution of the price of housing in the countries of the Euro area. In it, the Bank of Spain reflects how some countries, including ours, saw housing prices plummet more than 40% during the economic crisis and how the sector has been recovering little by little. Specifically, since 2014, housing has revalued more than 18% in the Eurozone.
"According to the different analyzes available, the price of housing in some countries shows signs of overvaluation with respect to their equilibrium levels. In the case of Spain, estimates from the Bank of Spain indicate that the price of housing is not , on average, away from its equilibrium value, "the report said.
Of course, the Bank of Spain warns that the valuation of housing prices is surrounded by "great uncertainty" and that, in addition, estimates at national level " can cover up divergent situations of the housing market at regional level or locaL ".
According to this report, there are several reasons "that advise that the dynamics of the real estate market be closely monitored by those responsible for economic policies . On the one hand, the sector has great relevance for the progress of the economy and its evolution can create risks for the financial company ".
In the specific case of our country, the Bank of Spain recalls, "it regularly monitors its financial stability reports and, in particular, for the determination of the countercyclical capital buffer . On the other, the price path and the conditions of accessibility to housing may have relevant social implications. "
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