The study, carried out by seven senior analysts from Standard & Poor’s, predicts a more stable future, following large rises in European property prices over the past decade.
The analysis shows that the European property market is heading for a soft landing. This will mean that the current high level of property price increases will level off in the near future.
Spain is running the largest risk of a property crash of the kind experienced in Sweden in the early nineties. But even in Spain a soft landing is the more likely scenario, the credit analysts say.
But it is still possible that things could get much worse, according to the analysts’ worst-case scenario.
“Two-figure price increases cannot continue forever, and there are legitimate grounds for warning that the property boom could turn into a crash,” writes Standard & Poor’s European head economist Jean-Michel Six.’