The agency “Fitch Ratings” believes that housing prices in Spain does not touch the bottom till the end of the year. Authoritative agency, that is part of the “big three” on a par with Moody's and Standard & Poors, thinks that a drop of 80% of maximum performance in 2007 of the issue of mortgage for population was not fully considered in the evolution of real estate prices.
The agency of risk assessment and credit default Fitch believes that the observed growth of the Spanish economy and the reduction of unemployment in the long-term will impact on housing prices, although they do not touch their lows to an early end of the year 2014.
Nevertheless, specialists of the agency Fitch said that the Spanish construction market still has a large number of unsold properties, for which, at the same time, there is a weak domestic demand as a result of loss of purchasing power, increased the cost of credit and high unemployment.
In its report, Fitch indicates the fact that the decline in the issuance of mortgage loans by 80% was not fully accounted for in the evolution of real estate prices. In the published document also is noted that the signing of new mortgage loans for the purchase of real estate has increased by 2% in March 2014 compared with the same month in 2013, and this was the first increase in this figure for nearly four years, according to preliminary data released by the National Statistical Institute of Spain (INE).
Therefore, Fitch Ratings believes that, when housing prices in Spain will reach the lowest levels, will occur no earlier than the end of the year this year, and thus decrease the total value of the property is 40% from its peak in 2007. In its report, Fitch also emphasizes that housing prices in the peripheral Eurozone countries, which have suffered from the economic crisis to a greater extent, starting to recover, albeit with different intensities.
Thus, the Spanish property market remains fragile and is likely that the prices here will reach the bottom at the beginning of next year.
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