Better deals for Spanish property buyers

November 30, 2007

The cost of new and used homes in Spain could start to fall in 2008, marking the first decline in real estate prices nationwide in 15 years, new reports from banks and analysts suggest. Analysts point out that that there may be some very attractive investment opportunities in the Spanish property market in 2008.

So far, market watchers are predicting that the declines will be small. BBVA, for example, is forecasting a price drop of 1.9 percent in 2009 after marginal growth next year, while ratings agency Standard & Poor's is expecting zero growth in 2008 followed by a 1.1-percent decline in 2009. Deutsche Bank is less optimistic. It expects prices to start falling next year and drop even more sharply in 2009.

"It is very probable that prices will fall in 2008. That could cause alarm and accelerate the adjustment, especially taking into account the tighter lending conditions," Deutsche Bank warns in a recently published study.

The current predictions contrast with what real estate analysts, property developers and many banks were saying just a few months ago, when most were confident that Spanish home prices would experience slower growth after a 10-year boom but would not move into negative territory. That line has also been maintained by the government, which is maintaining predictions for a 4-to-5 percent increase this year.

For an extensive choice of new and off plan property for sale in Spain on the Costa Blanca and Costa Calida, visit the Novocasa website.