'Valuation gap' emerging in Spanish real estate market

Banks and investors are clashing over the valuation of Spanish properties, it has been revealed.

According to an article in the Financial Times, there have been instances where financial institutions have refused to sell real estate assets because the price offered by the buyer has been considered too low.

Speaking to the publication, head of Credit Suisse's European real estate group Wences Bunge said: "Sellers have not adjusted expectations to the new reality. But I believe we are starting to see that reality."

He went on to point out that risk-averse investors are staying away from the country's property market, adding that he does not expect this to change over the next year or so.

Representative of Jones Day in Madrid Victor Casarrubios told the news provider that economic uncertainty is causing many buyers to hold back.

Meanwhile, Enrique Marazuela, chief investment officer for the private banking division at BBVA, recently informed delegates at the Reuters Global Wealth Management summit that property prices in some of Spain's coastal regions have reached rock bottom and that transaction levels are beginning to recover.
 

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