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Spanish property prices rose (quarterly) for the first time in 3 years, according to new figures from the National Institute of Statistics (INE). If you believe that, you’ll believe anything.
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The Tinsa stats may not be the best in the world but give them their due. Compared to the official ones they are paragons of accurate reporting.
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I suppose when the figures are very low in terms of sales, its easy that the odd quarter suddenly jumps up a couple of % but this is neither a trend nor recovery; its a hiccup.
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According to these figures, average prices at the end of June were 1.6pc higher than at the end of March. Over 12 months, however, prices are still down, by just 0.9pc.
There you go; everybody avoiding paying the 8% IVA that came into force 1st of July. A lot of VPO were signed and we may still see more at the end of this year as many of the susidies are going to disappear.
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@marjal wrote:
According to these figures, average prices at the end of June were 1.6pc higher than at the end of March. Over 12 months, however, prices are still down, by just 0.9pc.
There you go; everybody avoiding paying the 8% IVA that came into force 1st of July. A lot of VPO were signed and we may still see more at the end of this year as many of the susidies are going to disappear.
I don’t think so. there were more completions in July than June, according to the stats. Which is a slight suprise as you would have thought there would have been a spike in june and then a drop in july.
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I’m not looking at the stats since they all seem to be flawed. I was just giving a logical explanation.
Since the 3rd quarter stats are not out yet, I didn’t think the figures for completions in July would be out yet, so July (or the 3rd quarter) may also see a jump for those who have lagged to avoid the IVA rise. -
@marjal wrote:
I’m not looking at the stats since they all seem to be flawed. I was just giving a logical explanation.
Since the 3rd quarter stats are not out yet, I didn’t think the figures for completions in July would be out yet, so July (or the 3rd quarter) may also see a jump for those who have lagged to avoid the IVA rise.oh, I understand the logic, and generally agree with it, but it is erronous, maybe not in you case as a developer but in general. On purchase of a ‘new build’ the VAT has gone up to 8%, but in the case of resales, transfer tax has only increased to 8% for properties sold over 400.000€. At least here in Andalucia, I assume the same rules apply thoughout Spain (could be wrong though).
I don’t think the 3rd quarter stats will be out for a while as july stats only came out recently. maybe when the august stats are out next month we might have a clearer idea.
Also although we can knock general property stats in regards to prices (due to under-declaring, etc… which skewered current figures), the INE stats are based on land registry figures. So only once changed in the land registry are they used.
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Sorry Fuengi, I don’t understand what question you are answering. Perhaps I wrote something incorrectly. I think I was reading sales numbers not prices.
Now I know what you mean. I take your point. -
Also although we can knock general property stats in regards to prices (due to under-declaring, etc… which skewered current figures), the INE stats are based on land registry figures. So only once changed in the land registry are they used.
This is true Fuengi but my understanding is that historically the official figures have been made irrelevant by the amount of transactions that have been reported at lower than sales value to avoid tax. The balance usually being paid in cash.
From what I read this practice is becoming much less prevalent. If so, in quite some years to come, the recorded price variations could well become useful. As it stands they are meaningless.
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Believe me, a very few proportion of transactions are different from the real selling price. This mostly happens in second hand property that the original sales price is much lower than the current sales price. On new properties, in our case anyway, it is practically impossible.
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Marja, I don’t disagree with you at all. My point is that the misreporting of sales prices was a common practice in the past. Now it is much less so. However it continues to distort the ‘official’ figures and will continue to do so for many years to come.
A house that was recorded at the land registry as sold for 200k in 2005 could well have in fact been sold for 250k. The balance being passed under the table. If that house was now sold and recorded at 225k the official figures would show growth in prices. The reality is a drop.
The truth is that nobody really knows how much the reporting was distorted in the past, other than that under reporting was once a common practice. It is generally accepted that the practice is less common now.
In ten years time, if the market and the rules governing it haven’t changed, the official figures may be the best available index. At present they are meaningless.
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