Are Spanish property values to fall further?
Speculation about just how much cheaper property in Spain can get is rife – and complicated by the market there being so segmented – but a decision to offer Spanish banks rescue funds is expected to cause further price depreciation, at least in some parts.
The recent decision by EU leaders to offer a bailout to Spanish banks is a first step towards restoring some stability to the country’s economy, but in terms of the property market it is expected only to drive values down.
“The extra funding they receive will make it easier for banks to drop the asking prices of their repossessed stock, something they’re already under pressure to do, as well as offer enticing finance options to buyers,” said Richard Way, editor of The Overseas Guides Company. “The knock-on effect could cause resale prices to fall too in those areas. This means the market is likely to remain strongly in favour of buyers and one auditor has said prices could fall by 10-50 per cent between now and 2014.”
Soon after Spain’s bailout was confirmed, Spanish bank Bankia, the subject of Spain’s biggest ever bank rescue and now government owned, announced plans to shed €30 billion in property assets, amounting to half of its repossessed stock, by 2015. The bank has asked for €19 billion in aid, which will come from a European rescue package for Spanish banks.
“The market is localised in Spain though,” added Way. “In an area swamped with thousands of bank-owned units built for the second home market, you might see more price movement, while in more established areas, where the market operates on a lower turnover of resales, such as parts of Catalonia, the driving force behind a sale and what dictates a price – for example, an expat selling for personal reasons – is completely different. Every buying opportunity should be treated individually. It’s naïve to approach the Spanish market as one big bargain bucket, where every deal is open to further discounts.”
For details of property for sale all over Spain, visit the Spanish listings on Rightmove Overseas. One way to save money when buying in Spain is to use a currency specialist when transferring your pounds into euros to complete the purchase of your property. For more information on this, contact Smart Currency Exchange or visit the Currency Zone.
To understand the full step-by-step process to buying a property in Spain, collect The Overseas Guides Company’s ‘Spain Property Buying Guide’