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Moody’s and Eurostat see positives in Spanish property sector
The credit ratings agency Moody’s and the European Union statistics institute Eurostat see Spanish property prices as having bottomed out. According to Eurostat the price of property in Spain increased by 0.2% in the third quarter of 2014 while Moody’s believes that price data is improving in line with the strengthening of the Spanish economy.
Fernando Encinar, Head of Research at Idealista, a major Spanish property portal, believes that prices have now completely stabilised in prime areas where there is interest from investors. However, he sees prices as still having further downside in many spanish provinces although price falls will be minor.
Moody’s sees mortgage default rates as having already hit maximums in Spain as the country’s economic environment improves. Spain’s economy is now growing, unemployment is on the decline and consumer confidence is rising: all factors which will cause the number of evictions due to non-payment of mortgages to decrease.
Meanwhile the Eurostat price data for Q3 2014 showed Ireland leading the increases with a 6.2% rise followed by Latvia (4.9%) and Croatia (4.7%). Spain’s increase is a relatively small 0.2% but the fact that Eurostat is also recording rising Spanish property prices shows that there is now a wide consensus on price stabilisation in the country.