Spanish bank BBVA also expect property prices to continue falling this year
The British investment bank Barclays Capital say Spanish house prices could fall another 18pc before they bottom out, according to their latest report.
Barclays Capital base their numbers on official figures showing a 7.2pc fall in property prices over 12 months to the end of March, and that would have us believe that prices have fallen a total of 22pc since the boom ended.
The problem with that is, as regular readers will know, that the official figures are largely unreliable and do not reflect the true fall in house prices that have taken place since the Spanish property market started to turn down in 2008.
Using official figures for their calculations, Barclays Capital warn that overall drop in prices could reach 35pc to 40pc before the market bottoms, but in reality that size of a correction has already taken place. Even Spain’s Minister for the Economy says house prices are already down by 35pc.
So Barclays Capital are right to say that prices might fall 40pc in total, but wrong to say that means another 18pc of declines to come. We are already almost there, certainly when it comes to holiday homes on the coast.
BBVA, one of Spain’s largest banks, has also recently published a new report forecasting further house price declines, citing the recession and the new credit crunch as to driving further reductions.
Mark Stücklin is a Barcelona-based property market analyst and consultant, and author of the 'Spanish Property Doctor' column in the Sunday Times (2005 - 2008). He can be reached by email on email@example.com.