Spanish property will have lost just over half its value by year end forecasts a leading valuations company. But that’s an important step closer to recovery.
Average Spanish property prices will have fallen to 1,160 €/m2 by the end of December, a decline of 52pc from the 2007 peak price of 2,401 €/m2, predict Sociedad de Tasación, one of Spain’s biggest appraisal companies, in their latest report on the housing market.
According to the report, presented by the company MD Juan Fernández-Aceytuno, house prices fell a hefty 15.7pc in the 12 months to the end of September, to an average of 1,256 €/m2.
Fernandez-Aceytuno said his company expects prices to fall another 7.6pc in the last quarter, leaving prices around 1,160 €/m2 by year end. That would be more than 50pc down since the peak.
Unlike other countries, where prices adjusted much quicker when the crisis struck, house prices in Spain were slow to fall at the beginning of the property crash, but now appear to be making up lost ground. These falls must be some of the biggest current house price declines in the developed world. Is there anywhere else in the OECE where house prices are now falling faster? Not to my knowledge.
But at this stage of the property cycle, falling house prices do not preclude the start of a recovery in sales. “House prices can continue falling, but that doesn’t mean that activity won’t recover,” said Fernandez-Aceytuno. “In fact, I expect that the housing market will start to recover before prices.”