November 10, 2009 at 8:26 am #55293
November 10, 2009 at 9:16 am #95046
So If Tinsa are about right,its not as bad as some are saying ie 30-50% drop since 2007.
Do you know where they get the valuations from?, in the article the source is quoted as ‘Tinsas Own Valuations’.
Also, if all the horrible unsold flats that we talk about are included in these figures it must to some extent distort the picture with regard to valuations of ‘normal houses’
I don’t know, just a thought.
November 10, 2009 at 11:53 am #95050
Steve, if you sniff around Tinsa´s website you´ll see something about their methodology. They don´t however go into any great detail which is understandable for reasons of commercial confidentiality.
None of the indices around are particularly reliable. The official ones in Spain are truly laughable, the were still reporting rising prices this time last year when everybody knew they were tumbling. Tinsa is generally regarded as the most accurate around, even then I´d say it lags some 6-12 months behind the actual market. I hasten to add that I have no hard evidence for this, only gut feeling.
As with any large market there are varying patterns. Some areas are certainly showing drops of up to 50%. Places such as Mijas and Almeria spring to mind as falling into this category. Other places are showing much smaller drops. The particular place I´m looking at, Nerja about 50km East of Malaga, is showing drops in asking prices of only about 10% from peak.
What you should also be aware of is that asking prices are only a small part of the picture. There is anecdotal evidence to suggest that, where sales are going through, they are doing so at some 30% below asking price.
If you are a buyer, particularly one with cash, you are in a very strong position at present. Don´t let anyone tell you otherwise. Some months ago on here I posted a succession of links to articles on Kyero going back over the last three or four years. They all proclaimed ´The market has bottomed´, ´Now is a good time to buy´, etc. etc. We still get them every so often. Frankly they are cobblers.
Spain´s economy is in a mess. It is deflating. Unemployment is pushing 20% and rising. Public debt is mounting. Pretty well all the independent analysts (i.e. those who aren´t trying to sell property) are forecasting that there are two or three more years of falls to come.
November 10, 2009 at 2:15 pm #95053
As with any large market there are varying patterns. Some areas are certainly showing drops of up to 50%. Places such as Mijas and Almeria spring to mind as falling into this category.
Where can one find these statistics for particular places?
November 10, 2009 at 2:20 pm #95054
November 11, 2009 at 8:03 am #95072
Edward Hugh´s take on this months figures.
The Spanish Tinsa house price index came in at 1960 in October, and thus once more fell back – on this occasion beyond the provious low of 1964 recorded in August. What this tells us about real prices is hard to determine beyond the fact that they continue to slowly wend there way down.
According to the November press r…elease from Spanish property valuer TIMSA the overall IMIE index was at 1960 points which means the year-on-year drop in property prices was 7.4%, in October, as compared with 8.3% annual fall registered in September.
This data point is not especially interesting, given the fact that prices have now been falling for more than 12 consecutive months, and this means year on year data becomes virtually meaningless.
The most valid measure we have at this point is the P2P one I have introduced (peak to present) since using this we can see how far the indicator moves around. See next chart.
In terms of accumulated rates, the general index is down 14.2% from the maximum recorded in December 2007.
Obviously house prices are going down in Spain, along with almost everything else , and just about the only thing (apart from unemployment) which keeps rising sharply at the moment is lending to fund the government deficit. In the nine months to September central government income was 70.7 billion euros, while expenditure was 133 billion euros. That is, expenditure is now nearly double income. Income (allowing for changes in the financing of autonomous communities) was down 16.2% (this is where we can see the true impact of the economic contraction), while spending was up 25.3%. Evidently this dynamic cannot be allowed to continue.
In addition the Spanish state spent a further 22.5 billion euros on the financial account in the first nine months of the year, largely in funding the bank reorganisation programme (FROB).
As a result the Bank of Spain recorded that the total gross debt outsanding of the Spanish government as of the end of Spetember had risen from 389 billion euros to 403 billion euros.
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