Ratings agency Standard & Poor’s has filed its own prediction on the fate of the Spanish property market, forecasting a bottom in 2015 and the beginning of a recovery in 2016.
Standard & Poor’s is a bit more pessimistic than other agencies, who believe a recovery may begin as early as 2015. But the agency believes that the abundance of supply and Spain’s population decline will continue to stifle any rebound in the short term.
But S & P agrees that the home price decreases are slowing, forecasting a 2 per cent drop in 2014, compared to a 4.6 per cent decline in 2013. The agency has revised its forecasts upward, noting “faster than expected” improvements in the economy and unemployment.
However, the fundamentals of Spain’s economy and demographics suggest a real recovery in the property market is still in the future. The “stock” of homes for sale will continue to depress the market, although increasing demand from “foreign investors” will help the industry.
When the recovery begins it won’t be a rocket blast. The agency predicts a slight 2 per cent increase in 2016.
Several reports in recent weeks have spotlighted the slowdown in the price declines, prompting different analysts to predict the bottom of the market may be near.