Bad bank Sareb has also been praised for its progress in receiving distressed real estate assets from the weakest banks. The institution is in the process of finalising service agreements with participating banks to manage the transfer of assets, but must still work towards completing an updated and comprehensive long-term business plan.
However, momentum must continue for the reform of Spain's financial structures to succeed. The IMF has called for "vigilant oversight" to ensure that risks to the economy and the financial sector remain controlled, as they continue to be elevated as Spain undergoes the "difficult process of correcting pre-crisis imbalances".
Recession in other parts of Europe is also having a negative effect on the country's overall economic performance and the economy is expected to contract for a second year in 2013. This is doing little to help ease unemployment, which has been cited as one of the main barriers to progress in the property market. Throughout the year, it is expected that the number of people without work will stay over 26 per cent, causing a rise in the nonperforming loan ratio in the country.
However, the IMF don't believe this is a major cause for concern, stating that banks have prepared provisions to "help cushion this outcome". What's more, while the macroeconomic outlook remains bleak, it is still better than the scenario used to calculate banks' capital shortfalls under the program's stress test.
Elsewhere, foreign buyers continue to be active, ensuring the property market remains fluid in certain prime locations, such as the Costa del Sol. Investors for new markets are also entering the country, with Scandinavians increasing their market share. Taylor Wimpey Espana noted a rise 311 per cent in the number of Nordic buyers in 2012 and, so far in 2013, have accounted for a fifth of transactions.