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August 2025 | Gazette Life | 53BUBBLING UP?Is Spain undergoing another property bubble? Is it the right time to buy, or should purchasers hold fire?The last property bubble in Spain burst disastrously following the credit crunch of 2008. Before this, the Spanish government had been issuing hopeful messages that the market would %u201cplateau%u201d, but those vague hopes were dashed by the international financial crisis.The result was an almost complete halt to construction, massive unemployment, bankruptcies and many thousands of evictions. The abandoned hotels and deserted new-build projects on Lanzarote and throughout Spain remain as physical monuments to the crash. Since then, it%u2019s been a slow and steady road to recovery, but the spiralling prices of properties and rents are now raising questions about how sustainable the situation is, and many are calling for a slow-down to avoid a blow-out.The Bank of Spain is already warning caution, advising banks to tighten up mortgage conditions. This year it warned that house prices are 10 to 15% above what is %u201cnormal or balanced%u201d for the economy.House prices have risen strongly ever since the pandemic of 2020, and the recent decrease in interest rates, with the Euribor at its lowest rate in three years, has only fed the strong demand. But the rate of increase has not been matched in any way by increases in wages, which remain low.There are many differences between now and 2008; for a start, there is currently no construction boom %u2013 building is at 30 % of what it was in 2007. Action has also been taken to limit the widespread abuses by the banks and building societies which were one of the compounding factors of the 2008 crash, and private debt is at its lowest since the turn of the century. These differences may not stop a crash in the housing market, but they could prevent it spreading to other parts of the economy.Nevertheless, if you%u2019re planning to take out a mortgage in the near future, be advised that expert professional advice will be vital. While estate agents are reporting roaring trade, other experts are pessimistic, fearing that purchases now may suffer readjustment in the future, leaving buyers paying mortgages in excess of the property%u2019s value.GAZETTE PROPERTY NEWSPrice: 295.000%u20acA0993 %u2013 Puerto del Carmen Large 2 bed apartment with private garden & communal pool.A0997 %u2013 Matagorda Front line apt. with 2 beds on a gated complex with underground parking. Price: 495.000%u20acESTATE AGENTS BOOM, ECONOMISTS BRACE%u2014WHO%u2019S RIGHT?