The team setting up Spain’s so-called “bad bank” do not expect Spanish house prices to rebound anytime soon.
The team setting up Spain’s so-called “bad bank”, actual name Sareb, forecast that Spanish house prices will fall for the next two years, then stagnate for two years, before starting to increase at an annual rate of 3pc in 2017.
The precise forecast is a fall 2.8pc in 2013 and 1.5pc in 2014, followed by two years of stable prices 2015-2016.
After falling 12.5pc in 2013 and 5pc in 2014, land prices are forecast to recover in 2016, but then grow by 2.5pc p.a., so less than house prices.
These are the assumptions being made by the government agency (Frob) setting up the Sareb, to forecast a 15pc return on investment for taxpayers and other investors over 15 years.
The “bad bank” will also consider demolishing unfinished new buildings that have no viable market, according to recent reports. However, there will be no demolitions before 2016.