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House price declines getting smaller

tinsa house price index february 2014

Another scrap of evidence that Spain’s house price crash is fizzling out, as a leading index showed declines slowing between January and February.

Spanish house price declines slowed down a fraction between January and February, according to Tinsa’s latest house price index.

Annualised house price declines in February stood at 7.6pc, down from 7.2pc in January. The average cost of housing in Spain is now 1,359 €/m2, back to where it was in July 2003, more than a decade ago. In nominal terms, prices are down 40.5pc peak-to-present, and more like 50pc or more in real terms.

House prices on the coast took the biggest hit over 12 months to the end of February, down 11.2pc, followed by the Balearic and Canary Islands, down 8.2pc each. Capitals and big cities were down 6.7pc.

Peak to present, house prices on the coast are down 48.6pc, followed by cities (-43.7pc), and the islands (-32.8pc).

The Tinsa index is based on more than 200,000 annual valuations, not actual sales prices.

SPI Member Comments

3 thoughts on “House price declines getting smaller

  • Chris Thorpe says:

    Tinsa valuations? What a joke that is – they caused the problem with their crazy valuations in the first place, valuing poorly built properties at astronomical prices.

    How can you claim the price declines are slowing based on unreliable valuations? it’s the prices paid that should be considered. These figures would not make good reading though and the talk-the-job-up brigade would be silent. Like any business the law of supply and demand rules – where’s the demand?

  • Mark Stücklin says:

    Chris, I agree that valuations in Spain are a part of the problem, and I’ve explained their shortcomings on many, many occasions. Do I have to repeat it every time?

    But bearing in mind its shortcomings, the Tinsa index is one of the few indices we have in this dimly-lit market, and over-time I suspect it does give us an idea of the trend. On this basis it does look as if price declines are getting smaller, so I don’t think it’s out of place to mention it in this article. Note I only said it was just a “scrap of evidence that Spain’s house price crash is fizzling out.” Hardly strong stuff. It was reported much more optimistically in the Spanish press.

    I often hear people complaining about those who would talk up the market, and when I report anything positive, however small, I’m accused of it. Maybe the Chairman of the Fed or the Governor of the Bank of England can influence markets, but there is nobody in the Spanish property business, least of all me, who can say anything that will have any impact on the market.

  • Chris Nation says:

    Yes. Give the man a break, Chris. Same with FX. Your chosen index may not be dead accurate but as long as you always stick to the same one, it will give you the trend.

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