According to data released by Tinsa today, the average price of finished housing remained stable throughout March showing a slight increase of 0.8% over the same month last year.
The areas of the “Mediterranean Coast” and the “Balearic and Canary Islands” show the most positive month with both areas showing an increase in prices of 4.3% during March.
The cumulative adjustment since the pre-crisis peak remained at -41%.
Only two areas recorded negative adjustment on the annual rate. “Capitals and Big Cities” and smaller towns grouped under “Other Municipalities” both recorded prices slightly below those of March 2015, with annual declines of 0.6% and 1.3%, respectively. The areas grouped under “Metropolitan Areas” recorded a healthy increase of 2.8%, year-on-year.
Quarter 1, 2016
When looking at the evolution of prices over the first quarter of the year, the overall pricing index is 2.2% higher than the end of Q4, 2015. The highest quarterly shift was recorded in the “Balearic and Canary Islands” where prices increased 5.4% over the previous quarter. Following closely behind was “Other Municipalities” with a 3.4% increase, and the “Mediterranean Coast” where prices of property for sale increased 3.1%.
Despite recent price increases there is still a huge gap between today’s prices and those of 2007. The average adjustment across the country is currently -41%. In the “Mediterranean Coast”, despite the recent onset of a recovery, is still showing the greatest difference over prices of eight years ago. Currently prices on the south coast are 46.5% lower than before the crisis. Other areas where the price difference is over 40% include “Capitals and Large Cities” and “Metropolitan Areas”, where prices are currently 45.1% and 43.8% below pre-crisis levels, respectively.
The lowest cumulative adjustment since the crisis is recorded in the “Balearic and Canary Islands” where prices are currently 29.1% down, while “Other Municipalities” are still 36.1% below those of 2007.
The Tinsa IMIE index is calculated on the annual change in the value of a m² of a property.
Property portal Fotocasa have released their Q1 report on second-hand (resale) property prices in Spain. The data shows a slight increase in prices of 0.5% over the first quarter of 2016 meaning a square metre will cost an average of 1,627 Euros. According to the report this is the first quarterly increase in prices since 2007.
The data released by Fotocasa suggests this is the third consecutive quarter of growth following Q3 and Q4 of 2015 which recorded increases of 1.1% and 0.7%, respectively.
Beatriz Toribio, from Fotocasa Studies, said: “The price of housing is stabilizing after eight years in the red. In 2015 we saw how the fall abruptly slowed and how some areas closed the year with price increases. After losing 45.5% of its value, we hope that in 2016 housing prices have bottomed out across much of the country and will begin to recover in the major economic and population centres,”
According to the report, the inter-annual rate showed an increase of 0.6%, the first increase in year-on-year prices recorded since 2007.
Q1 by Region
When comparing to December 2015, eight of the country’s autonomous communities recorded a positive change with the Canary Islands registering the highest increase of 6.3%. The Balearic Islands followed with a 2.2% increase. Valencia and Andalucia registered increases of 2.2% and 1.4% respectively, while Madrid showed an increase of 1%, with Catalonia closing the quarter with a 0.9% rise in property prices.
When we look at the average price per square metre, the Basque Country topped the table with 2,736 Euros per m². Second and third positions were taken by Madrid and Catalonia with €2,225 and €2,064 p/m².
The cheapest region was Castilla-La Mancha where the same space will cost you €1,050. The next two cheapest regions were Extremadura (€1,088 p/m²) and Murcia (€1,143 p/m²).
Thirty of the country’s provinces showed an increase in prices with the largest recorded rise being in Santa Cruz de Tenerife where prices increased 2.9%. Las Palmas was next with a 2.4% increase.
Of the 779 municipalities looked at by the study, 459 recorded prices increase, while 320 showed a decline in property prices.
NB: I must point out that this is data based on the prices of the properties Fotocasa, a property portal, have for sale on their site. Another property portal, Idealista, also release data based on their listings and that is why, in case any of you noticed, a previous article based on Idealista data, suggested prices had actually fallen in Q1. As with everything, it depends who you ask! If I report on both studies you can get a better idea of what the actual figures are.
According to data released by Tinsa, averagehouse prices in Spain increased by 1.4% during the first quarter of 2016, when compared to the same period in the previous year. This is the second consecutive quarter to finish with an increase, and comes despite the fall in prices for resale property.
As far as regions go, the two clear winner were Catalonia and Madrid who saw year-on-year increases of 8.2% and 7% respectively.
For the first time since the crisis of 2007, more autonomous regions recorded an increase in prices than a fall. Following the aforementioned “winners” other regions that saw significant price appreciation were the Balearic Islands with a 3.8% increase, Castilla La Mancha which saw a 3.5% increase and also the Canary Islands where property prices increased 2.4%.
Only two regions recorded a price fall – Aragon and Galicia – where prices fell by 3.5% and 3.1% respectively. When looking at how prices have or have not recovered since the crisis, property in Aragon is now 51.3% lower than in the peak of 2007. Castilla La Mancha has seen prices fall 51.2%. The smallest shift in prices is recorded in the Balearic Islands where prices are currently 28.9% lower than pre-crisis levels.
By province, the largest quarterly increase was recorded in Barcelona where prices increased 8.9%, followed by Albacete (+7.6%), Madrid (+7%) and Lleida with a 6.5% increase. A further 12 provinces managed increases above the national average of 1.4%. The recovery seems to be continuing and also spreading out across the country.
The provinces that registered the largest quarterly fall were Álava, Teruel and Jaen, with decreases of 7.8%, 6.7% and 6.3%, respectively. Cordoba, Pontevedra, Palencia, Burgos and Zaragoza also saw prices depreciate by more than 3%.
When comparing the provinces to pre-crisis levels, the largest adjustment is in Toledo which has seen depreciation of 55.1% since 2007. Zaragoza and Guadalajara also saw falls of over 50% registering cumulative declines of 54.3% and 54.1%.
When selling a property in Spain, the average time required from putting the property on the market to closing a sale is currently 10.5 months. However, in Cantabria the average time required is 19 months, while sellers in Avila require an average of 17.1 months to close a sale. At the other end of the table Ceuta, Melilla, and the provinces of Las Palmas and Madrid have average selling times below seven months.
As previously mentioned, Barcelona and Madrid have seen increases in value and the demand for property in those areas is also reflected in the time required to sell. In both cities the average time required to sell is less than six months (5.9 in Barcelona and 5.6 in Madrid). In the city of Valencia, the trend is reversed with the average time to sell being over a year, standing at 13.2 months.
As the rate of decline in property values has been more pronounced than the reductions in wages and the cost of living, the requirement to purchase a property (to afford mortgage payments) during 2015 was 22% of household income, compared to the 33% that was required in 2007. Only Malaga exceeded this average. Buyers in the Andalusian province will require 33% of gross household income to purchase a property.
In both Zaragoza and Valencia, the requirements are well below the national average with 19% and 17% respectively.
The requirement in Barcelona is 23.3%, while Madrileños require 21.5% and those in Seville will need 20.5% of household income. The area with the highest requirements is the district of Sarria-Sant Gervasi (Barcelona), where buyers will need 39.9% of household income to pay a mortgage.
When looking at the requirements in terms of yearly salaries, the current requirement is 6 years’ salary, compared to 8.1 years during the boom years. In Malaga, however, eight years’ salary would be required, while buyers hoping to purchase on the Balearic Islands will have to fork out an average of 14 years’ salary. This is mainly due to the busy residential market on the islands aimed primarily at foreign buyers.
In February the average price of finished housing (new and used) in Spain, showed an increase of 2.7% to 1,346 points.
Data released by Tinsa shows the Spanish property market remains positive. Furthermore the increase for this period show a great year-on-year increase following the steep decline in the same period last year which took the index back to May 2003 levels, the lowest since the global financial meltdown.
The “Mediterranean Coast” and “Capitals and Major Cities” showed the biggest gains showing interannual variations of 6.1% and 4.6% respectively.
Despite the country as a whole showing a cumulative increase of 2.7% the country’s smaller towns (“other municipalities”) remain low, lower than the same period last year.
From the crisis of 2007, the average price adjustment now stands at 41%.
Not forgetting the decline of 2015 the areas included in the Mediterranean Coast showed the largest annual increase despite showing a slight decline of -0.1% during January and February, 2016.
The Balearic and Canary Islands registered an increase of 2.5% in February, when compared to the same period in the previous year, while “Metropolitan Areas” show an average increase of 1.5% over the last 12 months.
Despite the positive news and outlook prices are still a way off pre-crisis levels. The steepest declines are in the Mediterranean Coast (-48.1%), Metropolitan Areas (-44.7%) and Capitals and Large Cities (-44%). The cumulative adjustment is now below average in The Balearic and Canary Islands having recorded a fall of 30.7% since 2007, and also in Other Municipalities where prices have fallen 36.5%
The Tinsa IMIE is calculated from housing appraisals and each month collects the change in the cost of a m2 of a building and compares it to 2001. The absolute numbers (points) correspond to the value of the index and are not relate to the price per square meter.
Property prices in the North of Spain are running away from the national average.
According to a report by Kelisto.es the average purchase price of a property of 80m² is vastly different depending on where you are.
The Spanish average is 131,040 Euros but take a trip to San Sebastian and you will need 328,000 Euros, 150.37% more than average. In Barcelona the price is also more than 100% above the average with a price of 269,520 Euros. Still in the North, but slightly lower is Bilbao where you should expect to pay 84.19% above the Spanish average at 241,360 euros.
At the other end of the spectrum the lowest prices were recorded in Jaen and Lleida where an 80m² property will set you back 89,600 and 91,440 euros respectively.
The trend continues when looking at rental properties. The report says that to rent a property of 80m² comes with an average national cost of 561.60 euros per month. Move up to Barcelona and this price increases to 970.40, a massive 72.79% above average. In San Sebastian the rental cost is 940 euros, 67.38% above average.
The lowest rental costs are recorded in Lugo and Ourence where you will pay 332 and 351.2 euros respectively.
As I live down in Andalucía, I did my own calculations and came up with an average price to buy an apartment of 80m² of 201,169 Euros. To get this figure I took the prices of 100 random properties (of 80m²) that are currently for sale in the region. So Andalucía is, whilst not the cheapest, only slightly higher than Bilbao.
Again, I took 100 random properties that are currently available for long-term rental in Andalucía and came up with an average of 510.10 Euros per month. As with sales, it seems Andalucían rentals are below the average price.
Property prices are predicted to rise further throughout 2016 due to low interest rates and rising employment.
Over the past 10 years the property market in Marbella has seen a massive change due to the obvious recession which affected most of the world. The knock on affect from the UK hit the construction and building markets leaving many of the projects along the Costa del Sol incomplete.
There has been much speculation as to the actual recovery of the property market in Marbella however recently released figures from the Ministry of Building are very promising.
The high property prices from 2004 to 2010 are finally levelling out and stabilising and there are also signs of a gradual increase which is great news for potential vendors.
As for the amount of properties sold, these figures too are encouraging as figures from the Ministry also indicate a rise in 2014 of properties sold in Marbella. All indicators are that this trend is positive for 2015 and highly likely to continue.
After 17 months of decline, the number of property sales in Spain experienced a year on year increase in August. Official statistics report 27,708 transactions, 3% more than in August 2011.
Sales in August constitute the first figures since the government announced changes to tax benefits for home purchases that will begin in January 2013. The removal of tax relief appears to have encouraged some buyers to take advantage of the current legislation.
Specifically, Mariano Rajoy’s government announced in July that, as of 2013, those who buy a home will be unable to deduct income tax benefit. Also ending are favourable tax rates for new house purchases, which will increase from 4% to 10%.
For resales, the transfer tax (ITP) with a tax of around 8% is also rising in several regions to 10% in 2013.
The data released by the INE reveals large regional differences for example in Castilla-La Mancha, La Rioja and the Balearic Islands, home purchases have increased by nearly 30%, while in Navarra and the Basque Country there were similar variations but entirely opposite, dropping by up to 30%.
Figures released today by Tinsa show property prices in Spain are continuing to fall registering a decline of 11.2% since July 2011.
The IMIE General index registered a year-on-year decline of 11.2% in July, pushing the index down to 1577 points. The cumulative decline in house prices since the market peaked in December 2007 is 31%.
Comparing the regions, the “Balearic Islands and Canary Islands” showed the sharpest year-on-year decline in July, at 14%, closely followed by “Capitals and Large Cities”, which fell by 11.8% compared to the same month the previous year, and “Metropolitan Areas”, which again stood at 11.6%. The decline was greater than the market average in all three areas.
On this occasion, both the “Mediterranean Coast”, with a year-on-year decline of 11%, and lastly, “Other Municipalities” with a fall of 9.1%, were below average.
In terms of the cumulative decline in house prices by region since peak prices, there was a 37.2% fall in July for the “Mediterranean Coast”; followed by 33.5% for “Capitals and Major Cities”, 32.1% for “Metropolitan Areas”, 29.2% for the “Balearic and Canary Islands” and 25.9% for “Other Municipalities”, which comprises the remainder.
The world’s economic difficulties seem to have dominated the headlines in our newspapers and on our televisions for three or four years now and there is currently very little sign of an end to the problems. No doubt a recovery of some sort will come some day, but at the moment it seems a very long way off. Perhaps unsurprisingly, investment in property is one of the first activities that slows up during any recession, and that’s certainly the case with the current one.
It’s hugely important to remember that it’s not all doom and gloom at the moment, though. For anyone who is considering the purchase of a home, especially a holiday home, there are some wonderful bargains just waiting to be snapped up. The same properties will cost a significant amount more in three or four years when the economy has recovered, so anyone who is in a position to buy will need to think hard about whether to do so now.
In several countries across Europe, the effects of the recession have been dramatic, and Spain is one of the nations which have suffered the most. Along with Greece, Portugal and Ireland, we’ve been fed regular media stories about the hardships, and it seems the whole continent will continue to face problems for a while yet. The Spanish property scene is relatively stagnant at the moment, but experts tend to agree that prices are noticeably low.
Plenty of choice, plenty of value
Needless to say, buying a holiday villa during economic difficulties is something of a gamble, but it’s generally assumed that prices are unlikely to dip any lower. Therefore, now could be an excellent time in which to dip the toes in the water. Thanks to a construction boom that lasted several decades before the economic upheavals, Spain is home to a stunning selection of properties of all shapes and sizes, so the purchaser can be sure of an excellent choice.
Of course, the country has been welcoming expatriates on a permanent basis for many years, and although the tide of emigrants has slowed down in recent times, a significant number of Britons still relocate to Spain every month. Attracted by the stunning climate, the friendliness of the locals and the pleasingly slow pace of life, there have been some recently who came because they found a great deal on the property market.
Buying a home abroad, whether for holidays or as a permanent residence, is of course a big step, so it’s always best to speak to those in the know first. Anyone who is considering such a purchase would do well to talk to people who have already done so, so the first step in the process should perhaps be to approach an online forum to gauge the opinions of others.
David Showell lives in the UK and has visited Spain on many occasions. When he’s not travelling abroad, he’s working for www.carrentals.co.uk.