The latest house price index from the Tinsa appraisal company reveals that, whilst the spanish national average house price fell by two per cent in July, house prices rose on the coast, where foreigners tend to buy.
Where it not for the fact that house prices in the Balearics and Canaries fell 4.8% in July compared to the same month last year, one could be tempted to say that the impact of foreign demand on Spanish house prices in coastal areas can clearly be seen in the latest house price index figures from Tinsa, with house prices on the mainland Mediterranean coast rising 2.8% in July, the only area to post an annualised increase in residential property prices (see table above).
Foreigners are also a big part of demand in the Islands, where prices fell 4.8%, so there must be other factors at work to explain why house prices rose on the mainland coast. One likely explanation is that the rise is an anomaly, as house prices on the coast have fallen most months this year, according to Tinsa.
The mainland coast is also where house prices have fallen the most since the Spanish property bubble burst, according to the Tinsa Index. House prices on the coast are down 48.7% peak to present, compared to just 32% in the islands.
OTHER HOUSE PRICE NEWS
Asking prices for resale properties rose by 0.4% in July, compared to the previous month, and fell by 1.2% on a year-on-year basis, according to the latest data from Idealista.com, a property portal. Asking prices rose in 8 out of 17 regions, the most in the Canaries, up by 1.9% in a month.
International ratings agency Standard & Poor’s argue in a new report mentioned in the Spanish press that spanish house prices will rise 2.5% this year, 2.5% next year, and 4% in 2017, thanks to improving EU economies and easier access to mortgages. The forecast that house prices will rise in a number of EU countries.
Spanish bank Bankinter forecasts that house prices will rise 2% this year, and 4% next year (down from 5% the last time Bankinter made this forecast). Bankinter expect big regional differences in property price changes driven by local factors such as a supply, demand, mortgage lending, economic growth, and demographics. Bankinter point out that long term, demand for Spanish property will decline with the population.
Nalle says:
Perhaps it’s the inclrease in the Scandinavian, Belgian and Polish markets. These markets have never traditionally been very big on the islands, so thats could also be a reason why we dont see an increase in prices there.