Home » Spanish property prices set to rise 8.6% in next 3 years, says Moody’s

Spanish property prices set to rise 8.6% in next 3 years, says Moody’s


The growing proportion of young workers and better affordability will push Spanish property prices up by 8.6% over the next three years, according to a forecast from the international credit ratings agency Moody’s.

The credit rating agency has carried out an analysis of the effect of demographic tendencies on property prices in seven large European markets. In the case of Spain, Moody’s expects a price rise of 5.6% in 2018 with an annual rise of 1.4% in the following two years.

“Low interest rates, better economic conditions, and a larger proportion of young workers will support the property market,” said Greg Davies, an analysis at Moody’s. He pointed out that over the last decade, the number of young workers has gone up by 8%.

The agency says that the current scenario of low interest rates and economic recovery that is helping to reduce the still high rate of youth employment is making property more affordable in Spain. However, it also says that salary growth remains low, which is stopping some young professionals from buying property, a situation that Moody’s believes will change in the next few years.

The agency points out that in 2014 around 14% of full-time employees in Spain earnt less than two-thirds of the average wage, against 7% in Italy and 9% in France.

Moody’s highlights the fact that Spain has experienced a fall in demand for new-build homes and there’s considerably more activity in the resale sector. It adds that construction activity is currently at 40% of the level registered in 2007. This reflects, among other things, sovereign deleverage, banking sector included, which has led to a considerable drop in property investment.

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