The big three credit rating agencies expect Spanish property prices to continue falling in 2014, but at least they see light at the end of the tunnel.

Standard & Poor’s

S&P forecast that Spanish house prices will fall 2pc this year, after a decline of 5pc last year, (estimate – see table above). They forecast that the Spanish property price crash will come to an end in 2015.

“In Spain, which has suffered the most in this housing crisis, we believe the fall in prices will decelerate this year in line with improving economic conditions and increasing demand from international investors,” says the S&P report.

Moody’s

Moody’s forecast that Spanish house prices will continue falling in 2014 thanks to a persistent oversupply of housing plus weak demand.

Moody’s expect the bad debt ratio on mortgages to increase at a slower rate as the year progress, and point out that mortgage loans to foreigners are three times more likely to default than loans to Spaniards.

Fitch

Fitch also expect Spanish house prices to fall in 2014, but go onto say that prices will bottom out in 2015. At least they see an end to the contraction. Fitch expect house prices to fall in Italy, Holland, and Greece this year.