Fall in House Prices Moderates in Second Quarter

The National Statistics Institute reported on Friday that house prices fell by 0.8% in the second quarter of the year compared to the previous quarter, representing the most moderate decline since the fourth quarter of 2010.

Thus, the fall in housing prices has moderated, after the pronounced decline of 6.6% registered between January and March, the biggest quarterly decline recorded since 2007, the year in which the National Statistics Institute began developing this index.

Specifically, Europa Press reported that second-hand home prices decreased by 0.1% compared with the first quarter, while the price of new housing fell by 2.4%.

Year-on-year (second quarter of 2013 over the same quarter of 2012), the price of housing also moderated its decline to 12%, compared with the 14.3% annual decline experienced in the first quarter.

Housing prices have now accumulated 21 consecutive quarters in which they have registered negative annual rates. The prices began to fall in the second quarter of 2008 (-0.3%), and since then the trend has not been reversed.

The House Price Index published by the National Statistics Institute complies with the requirements of Eurostat and complements the report published quarterly by the Ministry of Development. Among its objectives is to serve as a point of comparison between Member States in terms of housing prices.

Article source: Kyero.com

Mortgage and finance update

IMS - International Mortgage SolutionsThis week has seen a number of mixed messages coming out of Spain.

On a positive note Q2 saw the highest amount of property sales to foreign buyers recorded for 4 years.

On a more negative note,( dependant which side of the fence you are on), house prices continued to drop reaching 2004 levels, with an expectation prices will drop further over the next 12 months. It has always been my personal view that prices would need to drop to 2002 levels before any sort of recovery happened and we are looking very much like we are heading this way.

The Spanish independent Bank audits are due out this week with the Spanish Government stating that the amount of cash required will be in line with the previously expected 60 billion however other sources are rumoring the situation has worsened since the initial figures were published and that the amount of extra capital required could be as high as 120 billion Euros.

The 12 month Euribor for September for mortgage completions and reviews dropped to 0.87% the lowest ever recorded level with all indications suggesting a further drop in October.

Mortgage pricing has remained stable since the last round of increase in margins which took place late July and early August. Average margins above Euribor being granted are around 3.25%.

There has been no visible relaxing of criteria’s by the Banks and in the medium term this is highly unlikely to happen particularly given that part of the deal for releasing emergency capital includes a change to their overall regulation.

The Bank of Spain requirements on due diligence of mortgage applications remains historically high. Paperwork requirements for “ know your client rules” and the level of evidence a Bank must hold on file to justify lending is extreme even for low loan to values. Mortgages are still being granted but applicants can expect to be requested to supply extensive evidence of affordability including what appears to be various duplication in paperwork requirements.

International Mortgage Solutions

House prices continue fall in Q2

The price fall continues unabated
The price fall continues unabated

House prices in Spain fell during the second quarter by 11.5% compared to the same period in the previous year, up from 9.2% in the previous quarter.

The report, from Tinsa, shows that the majority of the autonomous regions followed the downward trend with La Rioja recording the greatest fall of 22.6%, bringing the prices back to 2003 levels. Catalonia followed with an 18% decline, followed by Aragon (-16.3%), Valencia (-14%), Castilla-La Mancha (-13.8%) and Madrid (-13.8%).

Staying within a few points of the national average were Castilla y León (-11.8%), Andalusia (-11.6%), Navarra (-11.5%), Murcia (-10.8%), the Canary Islands (-10.6%) and the Balearic Islands (-10.5%). The areas least affected by the decline in prices include Extremadura (-10.1%), Galicia (-6.2%), Asturias (-5.2%), Ceuta (-4%), Cantabria (-3.6%) and Melilla (-3.3%).

On a provincial level a more pronounced decline was recorded with above average falls in Tarragona (19%), Toledo (-18.7%), Zaragoza (-18.6%), Almeria (18.1%) and Segovia (18%).

At the other end of the scale a few regions registered smaller declines, or none at all, including Basin (-0.1%) and Orense (0%). Lugo is the only province that, provisionally, shows a slight rise of 2.1%.

Looking at the cumulative decline in prices since the crisis first hit in 2007 the north-east corner of the country stands out with the largest falls recorded (in addition to La Rioja) in Catalonia (-39.3%), Aragon (-37.8%) and Valencia (-36.2%).

Included in this group, although located in the central zone, and with prices influenced by Madrid, is Castilla-La Mancha where the cumulative decline from 2007 now stands at 38.9%.

The cumulative decline now stands at over 40% in a number of provinces including Toledo (-43.1%), Guadalajara (-41.1%), Zaragoza (-40.4%), Tarragona (-40.2%) and Barcelona (-40%). Also on the verge of joining the over-40% group are Almeria (-39.2%), Malaga (-39.1%), Girona (-37.2%) and Valencia (-37.2%).

Conversely, the provinces that showed lower cumulative declines were those with lower population density and a slow second-home market, mainly in the north-west quadrant. Those provinces include Soria (-13.8%), Zamora (-10.2%), Orense (-6.5%) and Lugo (-5.7%).

You can download Tinsa’s complete report here (ES): Tinsa Market Report Q2 2012

House Prices Return to 2004 Levels

Prices now similar to 2004
Prices now similar to 2004

According to data from the Ministry of Development, the average price of housing stood at 1,606.4 euros per square metre in the second quarter, with a drop of 2.6% over the previous quarter and falling by 8.3% over the same period of 2011.

This house price data reflects an acceleration of the falling prices shown in 2011 and remains far from the maximum level reached four years ago when the price per square metre exceeded 2,000 euros.

According to this statistical series released by the Ministry of Development, the average price per square metre has fallen 23.6% since its peak in the first quarter of 2008.

Meanwhile, Cinco Dias reported that the average price per square metre of private housing of up to two years old stood at 1,645 euros, with a decline of 7.1% year-on-year. As for private housing over two years old, the price reached 1,593.3 euros per square metre, down 8.4% year-on-year.

The average price per square metre of protected housing in Spain was 1,157.1, almost the same price as registered in the first quarter of 2012. The variation over the same quarter of 2011 shows a drop of 0.4%.

The number of real estate valuations for the calculation of housing prices was 85,911 in the second quarter of 2012, representing an increase of 2.0% compared to those carried out in the first quarter of 2012.

The regional distribution shows year-on-year declines above the national average (-8.3%) in Andalusia (-10.8%), Catalonia (-10.8%), Madrid (-9.7%), Aragon (-8.9%) and Valencia (-8.4%). With falls below the national average are Cantabria (-0.6%), Ceuta and Melilla (-2.0%), the Basque Country (-2.4%), Murcia (-5.4%), La Rioja (-5.6%), Navarra (-5.8%), Asturias (-6.0%), Castilla y León (-6.2%), Extremadura (-6.7%), the Canary Islands (-6.8%), Galicia (-7.1%), the Balearic Islands (-7.1%) and Castilla La Mancha (-7.3%).

For municipalities with populations of more than 25,000, the highest prices per square metre were in San Sebastian, 3,856.7 euros, Getxo, 3,282.0 euros, Leioa, 2,935.0 euros, Majadahonda, 2,923.6 euros, Errentería, 2,780.3 euros and El Prat de Llobregat, 2,755.5 euros.

In towns with more than 25,000 inhabitants the lowest prices per square metre were recorded in Elda, 736.8 euros, Tomelloso, 740.4 euros, Crevillent, 740.6 euros, Hellín, 744.8 euros and Villarrobledo, 746.8 euros.

Article source: Kyero.com

New TINSA house price report

TINSA have released house price figures for January and they show another fall in prices, although more moderate than before.

The IMIE (Índice de Mercados Inmobiliarios Españoles) fell by 6.6% to 1714 points compared with 1719 points in December. The cumulative fall since 2007 is exactly 25%, meaning properties have lost a quarter of their value since the crisis began.

Looking at performance of different market segments, “Capitals and Major Cities” once again recorded the most pronounced decline with a fall of 8.7%, followed by the municipalities on the “Mediterranean Coast” with an 8.1% fall. The “Metropolitan Areas” followed with a decline of 6.5% compared to January 2011.

Since 2007, when the crisis first hit, prices have fallen sharply with the “Mediterranean Coast” recording an overall decline of 33.1%, over a third of its value. “Capitals and Major Cities” follow with an overall decline of 27.8%, followed by “Metropolitan Areas” with 26.3%, the “Balearic and Canary Islands” with 20.1% and “Other Municipalities”, which includes regions not included in the other categories, with 19.9%.

You can download TINSA’s report here: TINSA House Price Report – January 2012