Every month the SPI House Price Index Tracker plots the progress of the seven most-watched house price indices in Spain, and puts them all on one page.
All the most relevant Spanish house price indices published in September are highlighted in the chart above. All of the seven indices I track published data in September, though for different periods in the year.
In reality the national figures are not much use to buyers and sellers who want to know what is going on in their local market segments, which can vary substantially from the national picture. They do, however, get a lot of media attention in Spain, and might influence expectations.
So without reading too much into the national figures, here are my thoughts on the figures published last month.
REGISTRARS
House prices rose an annualised 7.48% in Q2 according to the Registrars, based on their repeat sales methodology that only counts homes that have been sold twice in the period of study. This is probably the most accurate guide to prices in the most liquid part of the market – the homes that change hands most often – but leaves out all those homes that have sold for the first time (like many bank repos), and says nothing about the value of homes that can’t find a buyer.
NOTARIES
At the other end of the scale the Notaries reported house prices falling 3.6% in July, one of the differences being that the Notaries count all home sales in their index, including first time sales discounted heavily to find a buyer.
GOVERNMENT & INE
The figures from the Ministry of Public Works (Fomento) based on valuations, and the National Institute of Statistics (INE) based on sales, both for Q2, showed prices rising but at a lower rate than the previous quarter. This hints at a fundamental weakness in the market as a whole, and might also reflect the current political situation in Spain taking its toll on consumer confidence. For those who don’t know, Spain has been unable to form a Government despite two General Elections since December, and it looks like we are on course for a third election with no end in sight.
ASKING PRICES
Asking prices fell in August according to the two biggest portals Fotocasa and Idealista, and have now been falling for about the last six months, having looked like they were creeping towards positive ground last year. So on average for the country as a whole, vendors are still having to adjust their expectations downwards, though as I mention in a recent article ‘Vendors, hit the market with the right asking price or suffer the consequence’, sellers in Spain tend to ask too much to begin with and then spend months or even years slowly coming to terms with the real value of their homes. Asking prices might be performing better if vendors started off more realistically.
VALUATIONS
Spain’s leading appraisal company Tinsa publishes a monthly house price index based on its valuations, which in turn are based on sales comparables, amongst other variables. The Tinsa index fell 0.5% in August having been slightly positive for most of the year. Once again, this might reflect the political situation beginning to take its toll.
Tinsa also reported that house prices rose 8.8% in Barcelona in Q3, and by 5.4% in Madrid. The biggest increase in all Spain took place in Barcelona’s Eixample district, where house prices jumped 15% over twelve months.
