Spanish Property Prices Flat Until 2011
October 28th, 2009
Property prices in Spain have touched bottom but will remain stalled during the next two years, a partner for property advisor Knight Frank said on Friday.
“If you put a home on the market at a 35 percent discount to highs from three years ago, and partially-financed, prices are going to stay at these levels until 2011,” Prieto told Reuters in an interview.
But for sales to go ahead, properties need to be located in prime areas within cities’ metropolitan circles.
“If you’re trying to sell somewhere like Valdeluz or Sesena, 100 kilometres outside of Madrid, forget it. Properties on the coast or with these kinds of setbacks are going to be stalled for years,” Prieto said.
The Spanish property market is going through its worst crisis in a decade after an abrupt end to a construction boom that coincided with tightening credit markets, triggering price drops for both residential and commercial real estate.
However, Knight Frank said commercial real estate has experienced a slight recovery thanks to investors looking to make money on rental assets.
“Our perception is that there’s money for investment deals. Investors are looking with quite a lot of interest at real estate companies assets,” said Prieto.
A slew of Spanish companies — from realtors like Reyal Urbis to builders like Ferrovial — have put their real estate assets or headquarters on the market in recent months.
On the downside, the market could soon be saturated by this type of product, which runs the risk of further downward price pressure, Prieto said.
Story from Reuters
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