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Idealista resale asking price index down 10pc in June

Vendors dropped their asking prices in June the most since the bust began, according to the resale asking price index from idealista.com, a property portal. Fiscal changes and a bank bailout spell more trouble for private vendors.

The price expectations of people trying to sell their homes in Spain fell by more than 10pc over the last 12 months, as illustrated by the graph and table below.

This is the first time since the Spanish property boom turned to bust that vendors have dropped their asking prices by double digits, and the trend looks set to continue.

Fiscal changes and European bailout spell more pain for vendors

Private vendors might feel they are already digging deep, but they might end up the biggest losers from the European bailout for Spain’s banks.

The bailout means that banks can afford to drop their prices (and will also be forced to) whilst offering better mortgage conditions to people who buy one of their repossessed properties.

As banks control the property market, private vendors in Spain will have no choice but to follow suit, and swallow the resulting losses.

Spanish bank losses, on the other hand, will be paid for by German taxpayers.

In return for a European bank bailout, Spain is also under pressure to eliminate tax breaks for home buyers. If the changes being discussed do go through (for example, eliminating mortgage tax relief) buyers will have less money to spend on housing, forcing vendors to drop their prices even further.

SPI Member Comments

6 thoughts on “Idealista resale asking price index down 10pc in June

  • The idealista database includes many private vendors (perhaps a majority – I don’t know), and anyway, most agents in Spain work on commissions of 5pc or less (half that for the domestic market). Only agents in coastal areas selling to foreign buyers charge more. For the purposes of this index, you can assume that impact of commissions is small.

  • paul wentworth says:

    Just one question Mark, would you be an estate agent by any chance? And if the answer is yes,what actual percentage markup are coastal Estate agents working on, just interested?

  • Commission including ‘VAT’ is often ten per cent. And if I recall correctly this very wesbite once mentioned up to 30% estate agents commission for land in rural areas.

  • Interesting that these are asking prices. Sale prices (all Spain) have fallen only 5.5% over the last 12 months. Surprisingly E1956 psm, the average asking price quoted above, compares to curent E2286 average sale price over last six months, compared to E2419 a year ago, and E2905 psm in Dec 2007. But average sale prices have surely got to go below E1500 (and even less on the costas) before they bottom out. The seeming discrepancy betweeen asking prices and sale prices is probably because most adverts are for cheaper coastal properties whilst most sales are inland in cities – I’d guess.

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