Raising money against the clock will bring a dramatic property price drops
29 January 2011 @ 12:05
by The Spanish Brick
"When the perception of reality seems to be worse than reality itself, the best possible reaction is to explain it in the greatest detail”, Bank of Spain Governor, Miguel Angel Fernandez, 13th December 2010.
The Spanish property market is going through a situation in which we presume that bigger price drops will be experienced in the next nine months. Prices will fall furthermore but with moderation.
According to the Observatorio de Coyuntura Económica (OCE), property prices should fall by 24% in order to appeal to the market, whereas the agency Fitch Rating predicts in its latest analysis that prices will fall by 15%. Therefore… there is still room for price improvements for buyers and investors.
The reason we make that assumption is because the current pressure is on the main property holders, the banks and Saving Banks (Cajas), to raise money in order to meet the Government’s and also the Bank of Spain’s requirements: to increase liquidity and provisions against property risk exposure.
Rerad the full article: Spanish property forecast
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