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Ratings agents Fitch say Spanish house prices are still “significantly overvalued” in their latest report.
They calculate that house prices are 21pc overvalued compared to incomes, and 19pc compared to rents.
The property glut and unemployment are big problems for the market, putting downward pressure on prices.
As is always the case with reports by companies like Fitch, S&P, the IMF, OECD, The Economist, and international agents like Knight Frank that produce global house price index rankings, they always use official Government figures that would have us believe that Spanish house prices have only fallen 24pc since the peak. In reality, average house prices are down more like 40pc (even Tinsa say that), and in many places more than 70pc. So all conclusions based on the official figures are very wide of the mark.
Flawed official figures are profoundly unhelpful. They give the world the impression that Spanish property prices have not correct and are still far too high, when this is not the case. There are still a lot of crazy asking prices out there, but transaction prices are almost certainly down 40-60pc.
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Mark, you may have noticed on another topic that Acuna has said the number of properties for sale in Spain has risen to 2.25 million, up a further 12.5%, the property glut has grown and this puts more downward pressure on prices 🙄
I agree transaction prices are likely to be down 40-60% overall apart maybe less of a fall for exceptional properties in best locations. However, on our recent trip we were told by various parties that the simple reason for a lot of the current ‘crazy asking prices’ is because vendors cannot lower further because their mortgages are too large, they are in negative equity! It’s a false impression of current asking prices to their values 🙄
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@angie wrote:
Mark, you may have noticed on another topic that Acuna has said the number of properties for sale in Spain has risen to 2.25 million, up a further 12.5%, the property glut has grown and this puts more downward pressure on prices 🙄
Yet there are some who try to convince us that the bottom has been reached
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