American agency expects house prices to rise in Spain
COINCIDING with the decision by the government to change mortgage regulations, an American credit rating agency is forecasting a surge in Spanish house prices. One of the three main agencies, Moody’s has reviewed pricing and building in various European countries and whilst Spain is not at the top of the league, it believes that prices will rise on average by 8.6 per cent over the next three years. The main jump is expected to be in 2018 at almost 6 per cent and will then slow down for the following two years. The main drivers of the price rise are low interest rates, a stronger economy and a larger number of younger workers managing to find and retain employment according to the review. Britain and Germany are the two leaders in growth of prices as well as new building, but Spain is certainly due to see some price hikes especially as there are likely to be more new buyers than new properties being built. Prior to the crash, the construction industry was awash with cash and new builds were springing up all over the country, but many of these developments were never completed and although there is some sporadic new building, many buyers are having to look at older property.