Spain Home Prices Increase for First Time in Six Years

Home prices rose almost 1 per cent in the second quarter, the first increase in six years, according to an index tracked by the Association of Registrars.

The slight 0.97 per cent price increase from a year may not be enough to hail a recovery, but it is certainly adds to evidence that a turnaround is in the works. Prices were up 1.53 per cent from the previous quarter, the Registrars report.

The report was not all good news. The number of sales dropped 5.4 per cent in the quarter from the previous quarter, although the 78,464 sales were still significantly higher than the record low of 72,560 in the fourth quarter of 2013.

The main culprit was a sharp 18.89 per cent quarterly drop in new home sales.

Growing demand from foreign buyers was a key driver, accounting for 13.03 per cent of sales. As usual, British were the most active foreign buyers, representing 15.77 per cent of home purchases made by foreigners, followed by French (10.11 per cent), Russians (8.08 per cent), Germany (7.53 per cent) and Belgians (7.26 per cent).

Andalusia recorded the highest number of sales at 15,583, followed by Catalonia (11,980), Comunidad Valencia (11,591) and Madrid (10,522).

Prices are down 32 per cent from the peak and now stand at 2003 levels, the report says.

A new study by the Registrars tracking mortgage defaults found a 2.39 per cent increase in foreclosure proceedings starts, 18,921 compared to 18,480 in the first quarter. Mortgage rates continued to decline, hitting 3.80 per cent, down from 3.97 per cent in the first quarter.