The price of property on the Spanish Mediterranean coast fell by 8.3% over 12 months to the end of August, according to figures just released by Tinsa, one of Spain’s leading appraisal companies. The figures cover both newly built and resale property prices.
Tinsa publishes its figures in nominal terms, meaning that consumer price inflation is not taken into account. When you adjust for consumer price inflation in Spain, which was 4.9% in August, coastal property prices fell by 13.2% in real terms over 12 months.
The average nominal price of property in Spain as a whole fell by 4.6% over the period (9.5% in real terms). The large number of holiday and investment properties on the coast explains why prices there fell by almost double the national average.
Property prices in the suburbs of Spain’s big cities, where the bulk of the country’s inventory of unsold flats is located, fell by 7.1% in nominal terms. Spain’s property market crash began in city suburbs and coastal municipalities, driven by speculation and over-development, and these areas are still taking the brunt of the crisis.
Whilst costal prices on the mainland are falling the most, prices on Spain’s islands appear to be doing better, at least according to Tinsa’s figures. Property prices in the Balearics and the Canaries fell by only 3.8% in nominal terms over 12 months to the end of August.