September 2, 2014 at 6:34 pm #183067
José Manuel Galindo, head of the Asociación de Promotores Constructores de España (APCE) Spanish developers association, with whom I have shared a panel at more than one conference (more recently at IESE Madrid, above right), says this is the ideal time to buy a property in Spain because house prices have “touched bottom”, pointing to the 1.5% increase in the Spanish house price index published by the Property Register.
You can’t blame him for saying this. It’s his job, and anyway, house prices will bottom out when everyone starts to believe that house prices have bottomed out, so he has to keep repeating it. He’s been saying it for several years.
On that subject, some people have criticised me for talking up the market these last five years. I’ve been looking but can’t find much evidence of this based on articles at this site. Truth be told, I’m still pretty bearish about the overall market, though I believe the worst is probably behind us. I expect average Spanish house prices to continue falling for the next year or more, whilst prices in some local market segments will rise. That’s not exactly pump and dump.
I suspect some people don’t pay attention to detail and just assume that when I write about a new report by so-and-so claiming the market will recover, they think I’m the one making the claim.
But as it happens, off the top of my head I can think of at least 3 people who have banked healthy profits buying and selling Spanish property in the last few years. So in a way Galindo is right, it is a great time to invest, though you have to buy smart about what you buy.
With the exception of bubble periods when prices for quality and crap shoot up, buying smart is always all about identifying value in local market segments.
September 3, 2014 at 10:40 am #183073
I wasn’t aware of this index. The fact that it comes from the registrars implies it’s based on real transaction data rather than asking prices, etc – is that right? In which case I’m surprised it only shows a 32% drop from peak. Either way, I think we’re entering a period of several years when it’ll be a good time to buy – provided you know the local market you are buying into, and what represents value. I don’t think prices will go up significantly for a few years yet, so no money to be made from speculation, but they won’t go down much either so it’s a good time for those simply looking for a nice place at a reasonable price.
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