The latest data from Sociedad de Tasación paints a pessimistic picture of the Spanish property market’s short term future.
Although there are signs that downward pressure over property prices are “moderating,” the valuation company concludes “there are still no reliable signs of recovery, and the industry is still waiting for the housing credit to start flowing.”
Most importantly, the group sees no evidence of a “significant” improvement in the level of demand. Outside of bulk purchases by foreign investment funds, “it is not perceived that an accelerated absorption of the excess supply will be produced, which is still abundant,” ST concludes in its latest report.
But the group says home prices fell only 2.3 per cent from June 2013 to June 1014, compared to a drop of 15 per cent the year before. Prices are moving to a “neutral position,” ST concludes. Sevilla actually posted a 5.7 per cent increase in prices, while Malaga prices were up 2.0 per cent. But prices were down 12.7 per cent in Coruna and 6.6 per cent in Valencia, compared to a year earlier.
ST also notes a steady improvement in the “real estate confidence index,” a survey which ostensibly measures the mood of about 700 industry professionals, which is up almost 30 per cent from the third quarter of 2012, although it is still in “negative” territory.
Overall, the report echoes the analyst consensus that the market crash is reaching a bottom. And there are some areas that are already showing signs of strength, including Madrid, Barcelona and Ibiza. ST also notes the rental market will likely continue to benefit from the downward sales trend, although it will be necessary to “carefully watch” the impact of government regulations on the industry.
But it is still difficult to determine a “turning point” in the market, ST says.
“It is expected that the adjustment in the level of supply is maintained, and we will have to wait and see if the trend of easing price declines, very pronounced in this semester, is consolidated in subsequent periods,” the company concludes.
? Lionel Westell says:
It will take several years to absorb the hugh glut in and around all major cities. Until we see economic improvement and stability in the work place, Spaniards are not going to take on mortgages. The sale of bargains in holiday areas will continue, for those with ready capital many good deals abound.
Robert Rosello says:
The Costa blanca north region for example is a totally different real estate market. Buyers must keep this in mind.
Steve A says:
I’m becoming suspicious about the Societe deT’s current figures. Its data was good from 2000 to 2013 (earlier figures can be a bit dodgy i.e. estimated) , but checking some local average sale prices they have posted recently, the figures have been EXACTLY the same for three consecutive six month postings, which suggests they do not have the actual figures for every locality – which means they can’t now have the true figure in aggregate either. It’s odd because they were very good indeed.