According to the European Commission the slump will last for about 6 years with price falls that could reach 35 %
October 15, 2009
The low prospects for growth and the adjustment of credit conditions created, in addition, a difficult environment for the evolution of the housing sector for the remainder of the year and in 2010. In addition, due to the bubble of recent years, housing prices might be overvalued between 20% and 30% in Ireland and United Kingdom, and between 10% and 20% in Spain, France, Italy and Netherlands.
The same report points out that Spain has lost 20% of their competitiveness in prices since the creation of the euro in 1998, while Germany, has won 13%. Brussels blames this, in part, the rise in wage costs above the increase in productivity. This and other imbalances accumulated during the years of economic growth have made that Ireland, Spain and Greece have been more vulnerable to the crisis, as the three financed its rapid growth to accumulate large deficits on current account.
