Tecnocasa, one of the biggest chains of estate agents in Spain, reports real transaction prices fell a scant 0.4 per cent in the first half of 2014, compared to a year earlier.
The study, conducted in collaboration with Pompeu Fabra University in Barcelona, used data conducted from sales brokered by Tecnocasa and its franchisees.
While prices continued to decline, the authors concluded that the data suggests the days of dropping prices “appears to be close to the end”. The drop was the smallest in four years, the firm reports.
But Prof. José García-Montalvo, head of the research team that produced the report, was not ready to announce an imminent recovery. “There is still no definite trend,” he told El Mundo, noting that the glut of homes and limited mortgage continue to dampen the market.
Overall, average Spanish house prices now stand at €1,444 a square metre, a jaw dropping 60 per cent below the boom-time high of €3,500 per square metres.
By region, prices of homes sold in Madrid rose by 0.56 per cent to €1,605 per square metre, and in Barcelona price were up by 1.93 per cent to €1,957 per square metre. On the other hand prices fell significantly in Zaragoza (-3.99 per cent) and Valencia City (-2.85 per cent).
According to Tecnocasa;s data, 28 per cent of buyers were investors, whilst 72 per cent were buying a main home. The average resale transaction involved a home of 70 square metres sold for €95,488 euro, although properties purchased as an investment were cheaper on average, at €82,140.
The number of cash buyers was down a bit at 48 per cent of buyers, whilst 52 per cent used mortgages, an increase in the proportion of buyers using financing.The average mortgage value used to buy was €81,318, a drop of 8 per cent compared to last year, according to data from 800 mortgages arranged by Kiron, the financing division of Tecnocasa.
As for the future trend, Garcia-Montalvo said there are signs of improvement, including increased mortgage lending. But we will have to “wait and see” if a recovery takes hold for the long term.