MADRID: The analysts at credit ratings agency Standard & Poor’s (S&P) are predicting that the slump in the Spanish property market will finally become a thing of the past by the end of this year, with an annual increase of 2.5% S&P analysts forecast property price increase in Spainforecast in the average price of homes in Spain.
The S&P report is based on the perception that the general economic recovery in Spain is gaining momentum, and the analysts also believe that prices will rise by another 2.5% in 2016 and by 4% the following year. This coincides with similar trends being observed in other European markets this year, the main causes being favourable financing terms and the general economic improvement.
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Underlying all of this is the ECB’s policy of buying public debt, which leads to “ultra-low” interest rates even in the property markets which were worst affected by the financial crisis, according to S&P economist Jean-Michel Six. This is the case, for example, in Ireland and the Netherlands, where prices are expected to rise at an annual rate over the next two years of 5.5% and 3% respectively. The price increase in Ireland this year is expected to be 9%.
Other forecasts are for price increases of 5% in Germany this year (and 4.5% in 2016), 4% in Portugal and stability in Italy, while on the downside it is predicted that property prices will fall by 3% in France and 2% in Belgium. Outside the Eurozone, the UK market is also predicted to perform strongly, with price rises of 7% this year and 5% in 2016, while in Switzerland increases are forecast of 1.5% this year and 1% next year.
