House prices continued to fall in 2011

Valuation and consultancy agency Tinsa has released it’s report into house prices in Spain for December 2011 showing a fall in the average price of housing of 8.1% over the year.

The year began with a five per cent decline in January dropping slightly to 3.7% by March but this has steadily increased throughout the year with a drop of 4.4% in April, 5.9% in May, 6.6% in June, 6.4% in July, 6.8% in August, 7.4% in September and 6.9% in October.

In the capitals and major cities house prices remained at record lows in December with a drop in the price of the average apartment of 9.1%, compared to the same time in the previous year. Meanwhile, the Mediterranean coastal areas saw a decline in prices of 7.2% while other areas dropped 8.4%.

Including the drop in December the cumulative drop since the peak of 2007 now stands at 31.5% for the Mediterranean coastal areas and 26.4% for the capitals and major cities.

You can download Tinsa’s report here.

Property prices fell 4% in 2011

In 2011 the price of new properties in Spain fell by 4% bringing the average price down to 2,376 euros per square metre, and the cost of the average home to around 213,000 euros.

This is according to the Sociedad de Tasación (Valuation Society) who estimate that prices will continue to fall in 2012 after falling 3.2% in 2010 and 4% in 2011.

Although they predict further decreases they stress that in some locations the decrease may be less pronounced. “It is expected the adjustment will continue at the supply level offered in late 2008, adapted to meet a volume of demand lower than in previous periods,” they said.

Europa Press reported that during 2011, the average price of new housing fell in 48 of the 50 provincial capitals, while only one saw an increase and the other remained unchanged.

Of the capitals Sevilla saw the greatest decline at -8.3% followed closely by Ciudad Real at -7.8%.

Four provincial capitals (Barcelona, San Sebastian, Madrid and Bilbao), saw a price per square metre higher than the national average while in ten others  (Murcia, Cáceres, Badajoz, Pontevedra, Jaén, Lugo, Zamora, Tenerife, Avila and Ciudad Real) the average value fell below 1,500 euros.

There were 81,000 new builds registered in 2011 showing a decline in construction mainly due to difficulties in financing projects.

The Sociedad de Tasación also noted an increase in the number of properties between one and five years old that were vacant and still awaiting first occupation, being offered for sale by non-real estate professionals including credit institutions and private individuals.

There was also an increase in the number of properties being sold on a rent-to-buy option.

Rental prices increase

According to figures released by the National Statistics Institute (INE) the average price of renting a property in Spain increased by 0.9% during November, compared to the same month in 2010.

The increase in rental prices remains two points below the overall CPI which was at 2.9% by month end, reported El Mundo. Month-on-month, rental costs registered a variation of one tenth, which had risen this year by 0.8%.

In Navarre, the only region to register a decrease in rental costs, the average fell by 0.4%. The largest increase was in the Basque Country which registered an increase of 1.6%, followed by a 1.3% increase in Catalonia. An increase of 1.1% was registered in both Asturias and Galicia, followed closely by 1% increases in Andalusia, Cantabria, Castilla-La Mancha and Castilla y Leon

Surprisingly the costs in Madrid only increased by a mere 0.3%, while Murcia and La Rioja saw an even smaller increase of only 0.1%.

House prices continue to fall

Spanish property prices have continued to fall during the third quarter according to figures published by the country’s Ministry of Public Works.

According to the figures the average value of homes in Spain fell by 5.5% during Q3. A quarter-on-quarter fall of 1.3 % was also recorded.

Speaking to the Wall Street Journal, Nomura banking analyst Daragh Quinn predicted that the Spanish real estate sector was likely to fall further. He estimates up to 100,000 new homes will be sold in Spain this year, less than half of the 326,000 properties that were bought during 2007, a year that many refer to as “the boom year”.

However, according to Tinsa’s General IMIE Index, house prices throughout Spain fell by an average of 7.4% between September 2010 and September this year. The report also showed that capitals and major cities, along with coastal areas, have suffered most from the decline registering drops in values of 8.9% and 8.2% respectively.

Property prices rise in Spain

This summer has seen record numbers of tourists visiting Spain with over 7 million visitors in August – an increase of 9.4% over the same period of 2010. Many hotels on the Costa del Sol enjoyed 100% occupancy over the summer. Figures show Q3 has been very busy with Spanish property prices rising slightly as a result.

According to statistics from Kyero.com property prices in Spain increased from €263,000 in June to €266,100 in September. This could suggest a shortage of quality properties in some regions or simply an increase in demand.

Conti – overseas mortgage specialists – recorded a 7% increase n Spanish property enquiries in August with many agents noticing an increase in enquiries and viewing trips.

Marc Pritchard, of Spanish developer, Taylor Wimpey España, said ”The price rises in certain parts of Spain is an encouraging sign for investors with locations such as the Costa Blanca, Costa Calida, Alicante and Murcia experiencing marked price increases. Alicante, for instance, has experienced improvements in its infrastructure, seeing a second airport terminal open, which is always good news when it comes to attracting more visitors.”

Prices in Alicante have risen steadily over the last year. In December 2010 the average property price was €220,000 rising to €231,000 in September 2011, according to figures from Kyero.com.

Surprisingly, with the average price of property in Malaga at €299,500 (September 2011), which is above the national average, buyers do seem to be renewing interest in the Costa del Sol, traditionally a popular area for ex-pats.

Malaga has even been nominated as a candidate for the 2016 European Capital of Culture, which could boost future tourist numbers as well as property sales.

Optimistic signs for Spanish property

Property prices in Spain are dropping, tax on new build property is down by 50%, sales numbers are climbing and tourism numbers are at record levels – could this be the end of Spain’s holiday homes slump? For the first time international investors have overtaken domestic buyers.

Property agents all over Spain have noticed an increase in inquiries, viewing trips and sales as buyers watch prices fall.

TINSA’s August House Price Report noted an accumulated drop of 23.5% since it’s peak in late 2007. In the more popular areas excessive supply has pushed prices down by around 30%, while some repossessed properties have been selling at up to half the book value, with those in the best locations selling out first.

Overseas buyers are currently buying up to 1,000 properties a day in key areas like the Costa Blanca, Costa del Sol and Ibiza. Up to half of these sales are from Spanish banks or cash-strapped developers.

 

TINSA August House Prices Report Released

Tinsa has released house prices figures for August. You can download the report here.

The General IMIE index fell again in August to 1748 points, a year-on-year decline of 6.8%, continuing the trend of the last three months. The cumulative decline from the top of the market in December 2007 is now 23.5%.

This situation was also reflected in the market’s various segments, although “Capital and Major Cities” recorded a sharper year-on-year decline of 7.8%, followed by the ”Mediterranean Coast” with 7.1%.

In the remaining areas, the decline in house prices was below the national average. In the ”Metropolitan Areas” the year-on-year decline was 5.8%; in the “Balearic and Canary Islands” it was 4.9%; while the “Rest of Municipalities” it was 6.4%.

The cumulative declines to August from the top of the market, by area, were: ”Mediterranean Coast” 29.2%, “Capital and Major Cities” 25.6%, “Metropolitan Areas” 23.4%, “Balearic and Canary Islands” 21.1%, and the “Rest of Municipalities” 20.4%.

TINSA Press Release