Touch of attention International Monetary Fund (IMF) to Spain for the housing market. The world’s highest economic body asks the Government to pay attention to the evolution of house prices, where it has detected a “slight overstatement”. In addition, it alerts that a limitation of rental prices may have negative effects on the offer and requests that streamline urban developments to increase the supply of housing.
The IMF insists the Spanish Government to start prevent future financial problems and bubble risks with the creation of macroprudential control tools to avoid imbalances, and that supervisors coordinate and supervise their actions.
To prevent the current exposure to the brick of the Spanish banking sector from creating tensions and financial risks again, the agency asks, for example, that the Bank of Spain have tools to control the granting of credit.
Both the IMF and the European Union have been asking Spain to organize a systemic risk authority since 2013. This group of experts would be made up of the Bank of Spain, the CNMV or the Ministry of the Economy. It would have the capacity to issue reports, alerts and recommendations.
Increase the supply of housing and an untethered rental market
The organization chaired by Christine Lagarde makes several recommendations to the Spanish Government on the housing market, and is not in favor of the information that a Rental price index to control rents in big cities and hot zones “Any new initiative designed to reduce rental price pressures should avoid negative supply effects, which would have an adverse impact on low-income tenants, “he warns.
Another of his recommendations is not to underestimate the slight overvaluation of house prices, although far from the risk of a new housing bubble, although the IMF speaks of data from the end of 2017.
According to the agency, the relationship between the price of housing and family income, and the cost of housing related to rents are approximately at the same level as in mid-2003. “Never underestimate the speed with which these processes are gaining momentum ”, they affirm from the IMF.
The vulnerability It does not come from the part of an excessive granting of mortgages to buy houses, despite the rise in real estate prices, nor from a high construction of new construction, but it is concentrated in the high accumulation of public and external debt.
The IMF also asks that construction companies clean up their balance sheets, even with high delinquency rates. It encourages the mortgaged to take out fixed rate loans to avoid future increases and adds that make improvements to increase the housing supply, both in the regulation of urban developments and in social housing aid or rental aid.
The Government has not been slow to respond to the words of the FM. The Minister of Public Works, José Luis Ábalos, seems to agree with some of the recommendations, although not all.
Ábalos has affirmed in an informative breakfast “you have toto avoid a speculative spiral like that of a decade ago. The Executive is working on a package of urgent measures that we want to bring to the Council of Ministers soon and that addresses an improvement in the rental regulatory framework, greater coordination with social services in evictions, removing housing for tourist use from the Urban Leases law, and measures to stimulate the supply of rental housing, price moderation and rehabilitation ”.
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