Posted on July 6, 2016 in Property
Moody’s credit rating agency has estimated that the price of housing in Spain will increase by 5% in 2016 as a result of the continuing recovery of the Spanish real estate sector, driven by better economic conditions and the lowest mortgage rates since 2011.
The agency explained that the low mortgage rates are due to increased competition in the banking sector, and some of the European Central Bank (ECB) interest rates recording historic lows, with the Euribor, the benchmark mortgage interest reference, standing at -0.013% at the end of May.
According to Moody’s, the number of mortgage defaults are also improving, standing last December below 4.8%, at a time when the average mortgage rate in April stood at 2.03%, its lowest level since 2012.
However, El Economista reported that the agency estimates that the performance and the future of the Spanish real estate market will be “limited” by economic risks from the outside, because of the “significant” level of real estate assets which the banks still hold in their portfolios, and therefore in their opinion “banks should speed up the sale of these assets in order to avoid an excess of supply reducing prices in the medium and long term”.