Spanish Banks Expected To Increase Discounts On Housing Inventory: "Banks in Spain, now the country’s biggest property owners having re-possessed so many homes, will have to offer discounts of up to 50% in 2010 if they are to shift their stock of real estate, according to a new report.
Current discounts are simply not big enough to interest buyers, says the report from BNP Paribas Real Estate, the real estate arm of French bank BNP Paribas.
The prediction comes as analysts point out that it could take years for the Spanish property market to recover. According to Acuna & Asociados, highly regarded Madrid real estate analysts, it could take six or seven years just to clear the huge numbers of empty homes that won’t sell.
The firm’s annual report indicates there are 1.67 million properties for sale in Spain including 500,000 new builds, 500,000 resales and the rest are buildings that have yet to be completed.
Indeed, the latest report from BBVA, Spain’s second largest bank, also indicates that a recovery will be slow and drawn out over several years.
It says that Spanish property prices were 30% over-valued but have only fallen 10% so far and they need to fall another 20% before reaching bottom.
It predicts that prices will fall by 7% this year, 8% next year, and 5% in 2012 when they will start to stabilize.
The biggest price falls will be in the coastal areas where the most building has taken place in recent years."
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