After five years of double-dip recession, Spain’s economy seems to have stopped sinking. But the recovery will be a prolonged one. Despite having fallen almost 40 percent since the housing bubble burst in late 2007, home prices in the euro zone’s fourth-largest economy are expected to drop by another 10 percent to 15 percent before they stabilize.
“Recovery in the housing sector in Spain hinges on an improvement in employment and access to credit, both of which are prey to uncertainty,” Souheir Asba, an analyst at Societe Generale, said in a note.
Here are the reasons why Asba thinks Spain’s property market has yet to hit the bottom.
While a recent trend indicates an improved appetite for distressed Spanish real estate assets, it’s not significant enough to call for a revival of the market.
Spain has finally overcome a slump triggered by the end of the real estate boom. The country emerged from recession in the third quarter of last year and its economy expanded 0.3 percent in the final three months of 2013, the fastest rate of quarterly growth in almost six years.
The Spanish government expects gross domestic product in Real Estate to grow by about 0.7 percent this year, and for job growth to resume in the second or third quarter, including the buying and renting market. You can even check out villas to rent in Spain here on this website and get to live your life in the most comfortable way ever.
The fact that investors are once again buying up Spanish government bonds is a big vote of confidence. As a result, the government is now paying much lower interest rates to borrow money. Yields on 10-year treasury bonds are down to 2006 levels.
http://www.ibtimes.com/spain-property-market-outlook-2014-home-price-may-fall-another-15-1553610