The Tinsa house price index shows homes on the Spanish coast getting dearer for the first time since the crash started in 2008, whilst overall price falls continue to fall at a slower rate.
The (IMIE) house price index published by Tinsa, one of Spain’s biggest appraisal companies, provides fresh evidence that Spain’s drawn-out crash in house prices is running out of steam. The overall index shows that the average price for Spanish property (new and resale) fell to 1,338 points in March, representing a fall of 2.8 per cent compared to March 2014. For the second time this year, the year-on-year decrease in the average value of property is less than 3 per cent. The total adjustment since the 2007 peak is 41.4 per cent with prices similar to those in the summer of 2003.
What stands out most in the March index is the rise in prices for property on the Mediterranean coast, the only area where prices went up in March. Although this rise is negligible – barely 0.2 per cent – it’s significant, say Tinsa, who point out in their report this is the first house price increase on the Mediterranean since January 2008, when property prices rose by 2.7 per cent. Since then, values on the Mediterranean coast – the area most severely hit by the crisis, with a peak-to-trough fall of up to 48.7 per cent – have done nothing but fall.
“Data for March confirms the process of price stabilisation that started in Q2 of 2013,” TINSA says. “It’s still too early to confirm that prices have bottomed out, since none of the five groups of areas studied has registered a positive year-on-year rise in average prices for several months, but the tendency of more moderate price drops is clear, albeit at different levels depending on the markets.”
This uneven tendency can be seen in the areas studied. Against the aforementioned year-on-year 0-2 per cent rise on the Mediterranean coast, prices in the other groups are still below those registered a year earlier. In the Balearics and Canaries, the decrease was 1.7 per cent in March compared to the year before. In the Capitals and Large Cities group, it was 1.2 per cent. The worst change belonged to Metropolitan Areas where average prices fell by 5.8 per cent compared to March 2014. The smallest places (Other Municipalities) registered a year-on-year decrease of 3.8 per cent in March.
TINSA explain that the direction of house prices in future will depend on the economy and employment. If the positive economic forecasts bandied about over the last few months come true, the reactivation of property demand is likely to gather momentum, and average prices could bottom out over the next few months. “In any case, we mustn’t forget that the market is moving at different rates. While prices are rising slightly in some areas, in others there are still adjustments pending,” Tinsa conclude.