SPANISH property prices will not begin to rise until 2017. This is according to The Fund for the Orderly Bank Restructuring (FROB), which was set up to remove negative assets from struggling financial institutions.
The organisation estimate that house prices will fall for the next two years, stagnate in the following two, before starting to increase at an annual rate of 3 per cent in 2017.
Specifically, FROB believes that prices will fall by 2.8 per cent in 2013 and 1.5 per cent in 2014 before beginning to rise. They also predict that land prices will follow a similar trajectory, falling by 12.5 per cent in 2013 and 5 per cent in 2014, land then beginning to recover in 2016, but at a lower level than that seen by property, just 2.5 per cent a year.
Recently, the government body announced that it is considering demolishing new build properties lying empty and which have no viable market. However, there will be no demolitions until 2016. Large swathes of the Spanish coast have fallen victim to over-development and are now struggling to generate sufficient interest from investors.