Although there are signs that downward pressure over property prices are “moderating,” the valuation company concludes “there are still no reliable signs of recovery, and the industry is still waiting for the housing credit to start flowing.”
Most importantly, the group sees no evidence of a “significant” improvement in the level of demand. Outside of bulk purchases by foreign investment funds, “it is not perceived that an accelerated absorption of the excess supply will be produced, which is still abundant,” ST concludes in its latest report.
But the group says home prices fell only 2.3 per cent from June 2013 to June 1014, compared to a drop of 15 per cent the year before. Prices are moving to a “neutral position,” ST concludes. Sevilla actually posted a 5.7 per cent increase in prices, while Malaga prices were up 2.0 per cent. But prices were down 12.7 per cent in Coruna and 6.6 per cent in Valencia, compared to a year earlier.
ST also notes a steady improvement in the “real estate confidence index,” a survey which ostensibly measures the mood of about 700 industry professionals, which is up almost 30 per cent from the third quarter of 2012, although it is still in “negative” territory.
Overall, the report echoes the analyst consensus that the market crash is reaching a bottom. And there are some areas that are already showing signs of strength, including Madrid, Barcelona and Ibiza. ST also notes the rental market will likely continue to benefit from the downward sales trend, although it will be necessary to “carefully watch” the impact of government regulations on the industry.
But it is still difficult to determine a “turning point” in the market, ST says.
“It is expected that the adjustment in the level of supply is maintained, and we will have to wait and see if the trend of easing price declines, very pronounced in this semester, is consolidated in subsequent periods,” the company concludes.