Spain Property Delinquencies May Jump, Moody's Says

Discussion in 'Economics' started by ASusilovic, Oct 2, 2007.

  1. Spanish real estate loan delinquencies may increase as much as 15-fold by the end of 2008 as interest rates rise, Moody's Investors Service said in a report released today.

    Loan-payment arrears by developers and builders may reach 5.5 percent of total property loans from the current 0.37 percent, according to the New York-based ratings company. The increase would mark a ``soft landing'' for Spain's 12-year property boom, Moody's said in a report called ``Spanish Banks and Real Estate.''

    After rising 178 percent between 2000 and 2006, more than any other country in Europe, Spanish home prices are being threatened as the highest European Central Bank interest rates in six years curb consumer spending, Moody's said. A ``hard landing'' scenario, in which the loan default ratio for developers and builders exceeds 5.5 percent and house prices plunge 20 percent, is a ``remote'' possibility, Moody's said.

    Ooopsss....seems Moody´s a little bit more accurate on Spanish then on US markets, hu ???:eek:
  2. It's a conspiracy. Large US investment banks want to use the ratings companies to "talk down" foreign assets.
  3. It's far from accurate. The spanish market peaked in 2003. Since then, real prices are 20/30% lower.
    There is massive oversupply and the housing stock is not shifting. According to govt stats it takes roughly 3 years to sell a property on average. You read that right, 3 years.
    This report is talking up the spanish market if anything...