Knight Frank Global House Price Index 2011: Spain #48 / 52

The Spanish property market had a dismal year last year according to a global raking published by Knight Frank, an international estate agency.

Spain was ranked 48 out of 52 international real estate markets, with Spanish house prices down 6.8pc last year (based on official figures).

But Knight Frank’s index doesn’t tell the full story, at least as far as Spain is concerned. Using official figures (themselves based on valuations) the index understates the true extent of Spanish property price falls.

In reality, prices probably fell something more like 10pc last year (my guess), though probably not as much as Ireland (-16.7pc).

At the other end of the scale was Brazil, with (asking) prices up 26.3pc in a year. It’s only a matter of time before that market pops.

The Q4 results for last year represent the Global House Price index’s weakest quarterly performance since Q2 2009. “This suggests that a return to significant house price growth around the world is some way off yet,” said Kate Everett-Allen, of Knight Frank International Residential Research.

“No improvement is expected until the gap between house prices and two of its key determinants – incomes and rents – starts to shrink and the excess supply of new homes built in many locations during the boom years prior to 2008 is absorbed.”

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About Mark Stücklin

Mark Stücklin is a Barcelona-based property market analyst and consultant, and author of the 'Spanish Property Doctor' column in the Sunday Times (2005 - 2008). He can be reached by email on ms@spanishpropertyinsight.com.