I pointed this out back in January, but the Bank of Spain has just brought it up in its latest report on the economy. If the past is anything to go by, average Spanish property prices will continue falling for another 2 years.

Using the real estate crash of 1979 as a benchmark, the BoS says it expects “prices of this asset to continue falling, following the model of the real estate crisis of the 70s.” The chart below shows how property prices fell for 5 years from the peak in both 1979 and 1991.

On the other hand, the Bank forecasts that the slump in residential investment will bottom at the end of this year, when housing starts will have to start picking up again.