Moody´s: Housing Prices Have Not Hit the Bottom Yet

31/03/2014 – Expansion

In a report published last week, Moody´s reminds that in the last quarter of 2013 the deliquency reached 37.05%.

The continuous rise in mortgage defaulting badly influences credit quality of the Spanish banks and proves that the price adjustment has not come to an end yet.

Considering the supply-demand relation, the agency foresees that throughout this year the prices will keep tapering down. In turn, that will affect the banks´balance sheets due to depreciation of the collateral property.

Moody´s estimates that in September 2013 the banks´credit portfolios were worth of €105 billion.

In regard to the housing price development, the agency indicates that just on the contrary to what occured in Ireland, the United Kingdom or the United States (where real estate bubble also burst), Spain has been recovering slowly and the corrections have not finished yet.

Given the big number of empty homes, it will still take several years to absorp the houses in excess.

At the end of 2013, the number of credits tied to the property represented 57% of all credit portfolios granted by banks to companies and families (…).



Original article: Expansión 

Translation: AURA REE