Spanish property prices will fall by 20% in 2009, forecasts Tinsa, one of Spain’s leading appraisal companies, with the biggest drops in value on the coast. Tinsa expects property prices to fall by between 1% and 1.4% every month during 2009.
According to the most recent figures available from the Ministry of Housing, the average Spanish property cost 184,236 Euros. If Tinsa’s forecast is correct, prices will fall by more than 1,500 Euros every month in 2009.
Tinsa’s Spanish house price index – published monthly – reveals that Spanish property prices fell by 10% over 12 months to the end of January, the first time that Tinsa’s index has registered a double-digit fall.
Once again, the biggest declines were on the coast, where property prices fell by 12.6% over 12 months.
Prices have fallen as sales dried up and the stock of unsold new properties swelled to 930,000 at the end of last year. Worse is to come, say Tinsa, who forecast that the inventory of new homes will rise to 1.5 million this year, putting further downward pressure on prices, which are forecast to fall by an average of 20% this year.
Despite a collapse in new housing starts, long lead times in the construction business mean that double the amount new homes are still being finished each month than are being sold. In 2008, 745,000 new homes were finished, but only 287,000 were sold.