The government body behind Spain's so called 'bad bank', which was set up to remove negative assets from struggling financial institutions, have forecasted that Spanish property prices will not begin to rise again until 2017.
Frob (The Fund for the Orderly Bank Restructuring) estimate that house prices will fall for the next two years, then stagnate for two years, before starting to increase at an annual rate of 3% in 2017.
Specifically, the organisation believes that prices will fall by 2.8% in 2013 and 1.5% in 2014 before beginning to rise. They also predict that land prices will follow a similar trajectory, falling by 12.5% in 2013 and 5% in 2014, land then beginning to recover in 2016, but at a lower level than that seen by property, just 2.5% a year.
Recently, the "bad bank" announced that it is considering demolishing new build properties that are 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.
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