Barely a quarter of executives working in the property industry believe Spanish house prices will bottom out in 2014, according to a survey by CBRE, a consultancy.
In the same survey in 2013, 90pc of those surveyed expect prices to fall in 2013 (they were right), suggesting that sentiments have improved in the last 12 months.
Gloomy economic fundamentals like high unemployment, restricted credit, and weak growth explain why 75pc of 250 executives in the Spanish property sector see no reason to expect house prices to bottom out in 2014.
Amongst those who expect house prices to continue falling the majority expect declines of less than 10pc, an improvement of sorts. A quarter also expect housing starts of 175,000 this year, a big improvement on the 33,870 planning approvals in Spain in 2013.
60pc of those surveyed expect the recovery to take more time, whilst most expect the impact of the Sareb, Spain’s so-called Bad Bank to stablise prices at best, if not push them down further.
40pc of respondents expect refurbishment to be the principal building activity this year, whilst 37pc expect investors to focus on office space (33pc in 2013), 22pc in retail (25pc in 2013), and just 19pc expect investors to focus on residential, down a percentage point on 2013.
Institutional investors on their way to Spain
Opportunistic funds are expect to start giving way to institutional investors, say respondents. 56pc expect opportunistic investor to dominate this year, down from 67pc in 2013, whilst institutional investors are expected to increase from 6pc in 2013 to 12pc this year. Opportunistic investors tend to lead the way, whilst institutional investors follow, providing greater liquidity to the market when they invest.
CBRE say that growing numbers of Asian and Latin American investors will be a part of the story this year in Spain.