Spanish house price data published in Q3 2020

The SPI House Price Index Tracker plots the six most-watched Spanish house price indices one chart (above).

The six indices are updated and reported at different times, as often as not sending contradictory messages to the public about the direction of the market.

Some of them are published monthly, some quarterly, and some lag the market by several months when they are published. Some are based on valuations, some on asking prices, and some on sales prices that are never made public. They are all mixed up and reported in the press as ‘house prices’ with little context or nuance.

Personally, I don’t find any of them particularly useful for understanding market prices, but taken together they do give us a sense of the overall direction of the price trend. If you take a step back and look at the chart, you get the picture. House prices have been growing for several years, but are now turning down.

Bearing in mind their limitations, the following residential property price indices were updated in the third quarter of 2020 (all figures show latest year-on-year percentage change):

  • The Spanish Government (Ministry of Transport, Mobility, and the Urban Agenda (MITMA) based on officially-recognised valuations -1.7% in Q2
  • The National Institute of Statistics (INE) based on data from the Land Registry +2.1% in Q2
  • The Spanish Land Registrars’ Association using their ‘repeat sale’ methodology +4.4% in Q2
  • The Association of Spanish Notaries based on sales witnessed by its members -7.3% in August, up from -9.4% in July
  • The Tinsa index based on property valuations carried out by the company -2.2% in September
  • The (property portal) resale asking price index +0.4%% in September

It looks like the Covid-19 shock has had an impact on house prices, with all the indices showing a downward trend since the virus arrived in Spain. But if the idealista asking price index is anything to go by, it shows house prices recovering after lockdown and ending September fractionally higher than last year, suggesting the coronavirus crisis was short-lived in the housing market. That might turn out to be an illusion, it’s too early to tell.

The Tinsa index also shows how prices have changed by type of area, with the the areas of the Mediterranean coast and Spanish islands falling the most in September, as is to be expected of areas that rely more foreign buyers.

Source Tinsa, from own valuations

My hunch is that Spanish house prices are going to end up falling for a year or two as a result of Covid-19 and the government response.

Thoughts on “Spanish house price data published in Q3 2020

  • As an outsider wishing to buy in to Spain and therefore invest bothe actual capital and once living there further invcest via money spent on a day to day basis.
    I cannot help but feel that the Spanish authorities are slaughtering their Golden goose with bothe “The Modelo” tax forms and now Covid overreaction and Rent controls by the current Communist government.
    It is increasingly looking like my dream is slipping away, and with it the “Real” benefit to the region I wished to move to.Very Sad all round.

  • Survey Spain RICS Registered Valuers have been finding that prices mostly have held up so far, at least in the better quality properties. A recent study of a villa in Marbella, found that the 2018 value had risen gradually until the beginning of 2020, but then dropped back to the 2018 level in the next 3-4 months. However, now its starting to rise again. There has certainly not been a huge collapse in values.

    There has been increasing demand for building surveys from UK clients, indicating that more people are buying, probably to acquire before Brexit changes everything. Lifestyle change has been a significant factor for many nationalities, with many finding they prefer to change to their holiday home location for lockdown, instead of the big city. Also, that it makes sense in the long term as they can work just as effectively from home as they can from an office, with commuter time and stress being avoided. Families are registering their children in schools in the holiday home area, making the change even more permanent.

    Next year is going to see the economic effects of the restrictions really hit, with countries unable to keep bailing out companies and individuals indefinitely. The Brexit effect on exchange rates, taxes, travel and bureaucratic inconveniences, will also make UK residents think twice, so its likely to be the hardest year.

    However, overall it’s looking good long-term for the Costas, remembering that no matter how it happens, the Covid-19 restrictions should be a 2 or 3 year problem, with the world having to learn to live with it in the ‘new normal’.

Leave a Reply