Spain Property News

Frob: Spanish property prices will rise in 2017

The decline in Spanish property prices has now been given an end date. 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.

This is good news for those looking for long-term investment real estate, but those looking to sell property will have a few years of struggle ahead.

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.

The news follows revelations from the country's bad bank, which was established to swallow up distressed property in Spain, that new build properties that remain empty and have no viable market could be demolished. However, this will not occur until 2016, giving markets 2016 to turn their fortunes around.

Frob has also recently continued its radical restructuring of Spain's banking system, with Banco de Valencia approving its integration into CaixaBank. Banco de Valencia has been under the administration of Frob for over a year (November 21st 2011). During this time it has been operating normally with customers and creditors, helping to increase stability.
"This operation of integration into CaixaBank contributes to ensuring its financial soundness and guarantees its viability," Frob claimed in a statement. For those considering investing in Spanish property, the stabilisation of the country's banks will be welcome news.