House prices in Spain could fall another 12%, according to a report
Thursday, June 3, 2010 @ 1:02 PM
After a decade that has seen a rapid growth in house prices in European markets, S & P question now whether the correction that began in the last months of 2007 has really come to an end.
House prices in Spain could fall another 12%, according to a report by Standard and Poor's
This is revealed by a document issued by the credit rating agency that analyzes housing markets and affected European countries where this sector has undergone a major correction and fall of prices as in the case of Spain, France, Ireland, the United Kingdom, Italy and the Netherlands.
According to the report by the chief European economist of the credit rating agency, Jean-Michel, Six housing markets of the continent "are showing signs of emerging from the recent correction in prices."
Thus, with the exception of Ireland, the collapse in prices has slowed in many of these countries, like France, Italy, Spain and the Netherlands.
After a decade that has seen a rapid growth in house prices in European markets, S & P question now whether the correction that began in the last months of 2007 has really come to an end.
He notes that the German market seems to be "undervalued", which is not entirely surprising, as that report says, as that country "did not participate in the ‘boom’ of other European markets".
In the case of the UK, property prices began to rise in November last year and this sector has experienced a rapid recovery. Prices stopped falling in October, according to data provided by Halifax, the largest lender in the country and since then, inflation in housing prices has returned to positive territory.
Several factors explain this rapid recovery in the short term, among which are included, as in the rest of Europe, the fact that interest rates have fallen dramatically in the UK from August 2007 to 0.5 per cent today.
For Spain, the document said that prices could fall even 12 percent more before the market recovers.
S & P indicates that there is evidence to suggest that the Spanish property market crash is near the end but conditions remain fragile. It also notes that although the country still has a decrease in the price of their homes, the pace of decline has fallen.
According to official figures contained in the report, the annual rate in house prices in Spain fell 6.1 percent in the last quarter of last year.
Source: BarcelonaReporter