Spanish house prices will continue falling this year forecasts a poll of economists and executives in the real estate sector carried out by the news company Reuters. For its part the American investment bank Morgan Stanley forecasts price declines of up to 10pc this year in its latest report on Spain.
The Reuters poll revealed:
- Expectations that prices will fall, on average, 5pc this year, 3pc next year, and 1.2pc in 2013
- In total, the average price will fall another 9pc
- A peak-to-trough fall of 29pc
- The same poll 4 months ago had prices falling 4pc this year, suggesting those polled have become marginally more pessimistic about the economic outlook
- None of them expected prices to stabilise in the next 6 months, with the majority expecting it to take another 2 years
- The consensus rating of prices today was 7 on a scale of 1 to 10, meaning that prices are still somewhat over-valued
“Prices are strongly overvalued, inventories are still very high, the economic outlook is quite sluggish, the unemployment rate is strong and short-term rates are gradually increasing. The correction of the housing market should thus continue,” Olivier Eluere at Credit Agricole told Reuters.
-10pc say Morgan Stanley
Another recent opinion on Spanish house prices comes from the American investment bank Morgan Stanley, forecasting a fall of 10pc this year.
Morgan Stanley expect the Spanish economy to continue its “tenuous” recovery in the aftermath of the property crash, with unemployment falling to 15.9pc in 2012, from 20pc now. More people in work is a precondition for resolving Spain’s property glut.
Accountants PWC have also just published an opinion on the direction of Spanish property prices, saying they still have room to fall and that the shake-out could take another 10 years to complete.