House prices down 75%???

According to a study made by Bank of International Settlements (Ageing and assett prices), demographics have a big impact on house prices.

So, according to their study, the last 40 years the post-war baby-booms have helped driving the prices up in some markets (not so much in Spain as other countries according to BIS).

Below is the house price evolution in a number of countries. Note that, even though Spanish prices are the ones that has increased most during the perios 1974-2009, BIS claims that the demographic effect in Spain has been almost "neutral". I.e., the price increase is not caused by the baby-boom.

However, from now the ageing population will start decrease the demand on new houses and, hence, cause a decrease in house prices.
According to the study, Spain would be one of the most affected countries and the demographic impact will cause a 75% decrease in the house prices compared to a demographically neutral evolution.

For more details, see the study at (http://www.bis.org/publ/work318.pdf?noframes=1)