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Spanish prices climb… or do they?

Posted by: In: Real Estate 17 Jun 2015 Comments: 0 Tags: , , , , , , , , , , ,

Photo: Vaidas M

Spanish house prices have risen 1.5 per cent in the last year, according to the latest figures from the INE.

The Official House Price Index (OHPI) published by the National Institute of Statistics shows that prices of new build homes climbed 4 per cent year-on-year, while existing home values rose 1.1 per cent, averaging out at 1.5 per cent. The index has now recorded positive growth for four quarters in a row.

According to the index, annual house price growth fell in nine communities, while prices increased in other areas, led by the Balearics (up 2.8 per cent) and Navarre (up 3.3 per cent).

However, the consistent growth is slightly at odds with a mixed range of house price reports over the past year: much like the UK, Spain’s property prices are monitored by difference indices, which all use their own methodology to track values.

According to valuation firm Tinsa, house prices fell 3.6 per cent year-on-year in May 2015, with falls led by large cities and regional capitals.

The Spanish Ministry of Development’s figures, meanwhile, show that house prices fell 0.11 per cent in the first quarter of 2015 to €1,458 per square metre. While values have dropped for the past 26 quarters in a row, this is the smallest dip since the housing crisis, which indicates a positive step towards the market bottoming out.

According to the Ministry, seven autonomous regions saw prices rise annually, led by the Canaries (up 3.56 per cent), Aragon (1.9 per cent), Madrid (1.67 per cent) and the Valencian Community (0.69 per cent). The Balearics also saw values rise 0.1 per cent.

The OHPI, notes Mark Stucklin of Spanish Property Insight, is based on actual sales, which means that it does not track the prices of unsold homes that remain on the market; indeed, since Spain’s real estate boom went bust, it has a glut of inventory that is outpacing demand to a significant extent.

One thing that the indices have in common, though, is a gradually improving picture, with a particularly positive outlook for the Balearics. House prices rose on both the Balearic and Canary islands by 2.1 per cent, according to Tinsa.

Foreign demand is also climbing, attracted to both the upward trajectory recorded in certain areas and the falling prices on the Mediterranean coast, which create opportunities for holiday home bargains. For foreign buyers, the local market conditions are the priority rather than the overall national market: affordability and demand are more important than unsold inventory.

The Property Register shows that sales jumped 9 per cent in April 2015 year-on-year, reaching the highest monthly sales figure in several years. Sales increased the most in areas including the Costal del Sol, Barcelona and the Balearics.

In Mallorca, Engel & Völkers has already announced a strong start to the year.

The agency (which has 16 offices around the island) saw sales jump 20 per cent year-on-year, citing interest from investors in Germany, the UK, Switzerland, Norway and France.

Alejandra Vanoli, Managing Director of Mallorca Sotheby’s International Realty, is also optmistic about the coming year: “2015 will bring stability and yet more confidence to buyers, particularly as our traditional source markets are also more secure with Germany posting record low unemployment and the fastest rate of economic growth in three years and UK recovery well on course. Since June 2014, the banks have also become more open to lending, albeit with strict criteria.”

“We’re headed for record sales figures in 2015 – now is a great time to invest,” he added.

Spain, House Prices, Spanish house

Source:: The Movechannel


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