The Fund for the Orderly Bank Restructuring (Frob) announced that the market will begin to recover in 2017, but probably not before.
They explained that house prices will fall for the next two years, stagnate for two years, then begin to rise at an annual rate of three per cent.
Frob claims that in 2013 prices will fall by 2.8 per cent in 2013 and 1.5 per cent in 2015. Land prices are expected to experience a similar downwards trajectory, falling by a massive 12.5 per cent in 2013 and five per cent in 2014. However, recovery is expected to begin in 2016, but the rate at which this will occur will be much lower than that enjoyed by the property sector.
It is estimated that land prices will increase by just 2.5 per cent per annum from 2016 onwards in Spain, which will have implications for developers.