SPANISH PROPERTY PRICES "HIT BOTTOM"

What would you like first? A gloomy prediction? Or a vision of impending apocalypse?

OK, gloomy prediction: estate agency, Knight Frank, says Spanish house prices have hit bottom, but will stay there for another two years. What's more, only home-owners selling properties in the most des res areas of Spain's biggest cities can hope to make a sale. In the countryside, small towns and coastal resorts the market will be “stalled for years” the agency says.

Now for that vision of apocalypse, but first, take note, Spanish property prices are already 35 per cent below their 2007 peak. Consultancy, Capital Economics, forecasts prices will crash another 30 per cent, because the house-price-to- earnings-ratio is way out from its historical average.

Making things worse, earnings look set to fall and developers must sell at “rock bottom prices” to shift newly built stock over the next couple of years. Ay caramba!

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