In an interesting report, the British bank HSBC has stated that the adjustment of the housing market in Spain will continue in coming quarters even though there have been signs that the "free fall" of the property sector is nearing the end.
The report compares the current status of the housing market in the U.S. and UK with that of Spain, and in it, HSBC said that these countries have taken dips in housing prices that were far larger than the statistics reflect in Spain, therefore pointing out that in the Spanish market there is still room for further drops, but they did note that there are clear differences in price falls depending on the geographic area.
In this respect, the British bank said that the forecasts suggest that economic weakness will persist into 2010 and the Spanish property market recovery could take longer than that of the U.S. and the United Kingdom.
Similarly, HSBC suggests that these poor economic prospects may hinder the attraction of Spain as a destination for immigration, while the image portrayed of a country with high unemployment along with the strong euro reduces foreign interest in buying property in Spain.
Moreover, the institution hopes that the activity of housing construction between 1997 and 2007, spurred by expectations of price hikes have resulted in a "massive" over-supply, you may need two to three years to be assimilated by the market.
While nobody is crying foul of this story, it is very important to point out here that HSBC only provides corporate and investment services in Spain, with a paltry 4 offices, whereas it has a far higher presence in the UK with 1581 offices and 571 in the USA .. is it any surprise they would be talking up their primary operations over potential competition for investors money?
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