Official Spanish House Price Index into fifth year of falls

Official Spanish House price Index

The official House Price Index published by the National Institute of Statistics (INE) shows that Spain is now into its fifth consecutive year of falling house prices.

Spanish house prices fell 12pc over 12 months to the end of June, according to the latest figures from the NIE. Peak (2007) to present, prices are down 36pc.

In Q2 resale prices fell 12.1pc compared to 12.7pc for new build prices. Double-digit house price falls in both categories have been the order of the day since the beginning of 2012.

However, as you can see from the graph above, it looks like the rate of decline has bottomed out, having hit -15.2pc in Q3 of last year.

What next? I expect average house prices to continue falling for at least the next year, maybe two years, but at a declining rate as time goes by. Annualised double-digit price falls each quarter should be a thing of the past by Q2 of 2014, after which will come the long climb back to positive territory. That could take several years yet.

Lower house prices are good news for buyers, but only those with access to finance. With mortgage lending hitting new depths, most Spaniards are unable to take advantage of lower house prices. The biggest beneficiaries, based on the latest statistics showing a surge in foreigners buying homes in Spain, are cash buyers from abroad snapping up bargains on the Spanish coast.

SPI Member Comments

Thoughts on “Official Spanish House Price Index into fifth year of falls

  • Correct me if I am wrong but the quote states “Spanish house prices fell 12pc over 12 months to the end of June” (2012 to 2013). However, looking at the graph for the actual period specified it clearly shows that the price from the end of June 2012 to the end of June 2013 to go from -14.4pc to -12pc this is NOT a drop in prices it is a rise of 2.4% during that period! How do you calculate it to be -12pc?
    Also it quotes “Peak (2007) to present, prices are down 36pc.” The graph clearly shows the peak to be +13.1pc to the present at -12pc, to me this equates to a price drop of 25.1pc, again how do you calculate this to be -36pc?
    When people read such figures as an annual price drop of 12pc then this is incorrect. I read the graph as meaning since Q2 2010 (-0.9pc) to Q2 2013 (-12pc) as having a price drop during that period of -11.1pc and not -12pc for the year.

    • Steve, the chart illustrates an index, not house prices themselves. So it plots the RATE OF CHANGE (annualised) from quarter to quarter. A year ago prices were falling at 14.4pc, now 12pc. The rate of change has declined (from -14.4pc to -12pc), but that doesn’t change the fact that house prices were down 12pc in 12 months. You are confusing two different concepts.

  • Its great that house prices have dropped as foreign buyers can snap up theses offers. This is the time to buy and invest.
    Spain will come out of the crisis and prices will start to rise again. If you buy in good locations you can get a good income.

    The idea is to buy very cheap
    Rent out the property
    And the wait a few years for property to go back up

  • This is the time to invest? What information backs up this confidence? House prices still droppping, so I can’t see investers / buyers getting excited just yet.. Interested to hear more.. thanks.

  • The time to buy is not when prices are still fallling but when they start to rise. At the moment £100K investment is likely to be worth 10% less in another 12 months. And it looks like another three years before that fall in prices stops – a rise may take rather longer.

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