Spanish house prices have more than halved since they peaked in 2007, finds a new report by the University of Pompeu Fabra in Barcelona and Tecnocasa – a property company.
Based on a sample of transaction prices in Spanish cities including Barcelona, Madrid, Malaga, Seville and Valencia, the study found that house prices have fallen 53pc since the end of 2006, from 1,633€/m2 compared to 3,500€/m2.
On an annualised basis house prices are down 20.73pc over 12 months to end of June, broken down by city in the following table.
José García-Montalvo, the professor in charge of the study, points out that the research is based on real transaction prices, not valuations or estimates like other data. “They are prices from the front line, real prices based on actual sales made,” he said.
I suspect these figures are closer to the truth than any of the house price figures published by the Government, Notaries, or National Institute of Statistics, which all base their figures on valuations done by people who don’t know the real market price.
For example, the latest data published by the Notaries would have us believe that house prices have declined just 26.8pc since the peak in late 2007, giving up only the last couple of years of gains made at the tail end of the boom. Bearing in mind the housing crash and economic situation Spain is going through, who on earth is going to take that figure seriously?
Clearly not Eduardo Molet, head of Spain’s real estate expert network (REI), who recently claimed that resale house prices have already fallen 40pc on average, and as much as 60pc in some areas, and are set to continue falling. Nor, I doubt, Antonio Román, a Director of the bank Banesto, who recently said that discounts of 40pc are the threshold for making sales. “We believe that is where price and demand meet,” he told the Spanish press. And not even Tinsa, a leading appraisal company, whose latest house price index (for September) shows that property prices fell 11.6pc last month, and 33pc since the peak at the end of 2007.
Basically everyone except official sources and some appraisal companies say that Spanish house prices are already down 40pc or more. The sooner the official sources get real the better.