Spanish Housing Bubble: Causes and Consequences
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The Spanish Housing Bubble (1997-2006)
The housing bubble occurred in Spain during the decade from 1997 to 2006. During this period, housing prices effectively doubled. Property prices grew significantly faster than the prices of other goods.
According to Gandoy, in comparison with the European Union, construction achieved significant importance in Spain. This housing expansion formed the basis of the economic growth model, driven by demographic growth resulting from immigration and the demand for secondary residences from both national investors and other Europeans. Housing demand rose thanks to easy credit availability stemming from lower interest rates. Prices were further accelerated by the supply of buildings driven by speculation, which... Continue reading "Spanish Housing Bubble: Causes and Consequences" »