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The negative view of Spanish is being underscored by the start of sales by bad Sareb, according to ratings agency Fitch. The body claims that as the pace of disposals increases, it will add to the supply of stock, driving prices down further. This is despite warnings from Goldman Sachs that values must go even lower if the bad hopes to off its distressed .

Sareb announced last week that it had secured the sale of 550 homes in three months from late February. Added to the 800 or more sales believed to be pending and the 2,200 preliminary offers made on , the total could soon rise to 3,550. These figures do not include the results of a sales campaign at the Madrid International Real Estate Exhibition. However, to meet its target of selling 42,500 homes in the next five years, Sareb will need to increase its speed.

“This could prompt increased selling by banks, some of which have already begun lowering prices and accelerating disposals in anticipation of supply from Sareb depressing prices further,” Fitch said in a statement. “However, Sareb and the banks will want to find the right balance between speeding up the pace of asset sales and causing prices to fall, and it does not appear to be in the interest of either to trigger additional sharp property declines by an overly aggressive sales approach.”

Currently, it isn’t clear how long it will actually take the to sell off its property portfolio. Fitch believes will continue to be blighted by an excess of real estate while Sareb and lenders have large portfolios to liquidate. In fact, they claim the imbalance between supply and demand will cause the absorption of property to take several years.

It is estimated that the total stock of unsold new properties in Spain stands at 700,000 units. This isn’t taking into account the 620,000 properties built since 2004 under the cooperative system, self-construction or unfinished developments. Last year there were 114,000 newly built properties sold – at this rate it will take over six years to clear the real estate overhang.

Source:  http://www.propertyshowrooms.com/spain/property/news/sareb-sales-creating-negative-view-property-_312785.html

 

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