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July 25, 2014

Reducing of the cost of property in Spain in the second quarter of 2014

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Reducing of the cost of property in Spain in the second quarter of 2014

The cost of housing in Spain slows down its decline and the decrease has been only by 3.9% in the second quarter of 2014.

According to the official evaluation agency Tinsa, the reduction of 3.9% is quite mild compared with a decline of 6.7% in the first quarter of 2014 and 8.3% in late 2013. Nevertheless, last year property prices were reduced by 9.9% in Madrid, 8.2% in La Rioja and by 7.8% in Castilla-La Mancha. Prices for houses and apartments in Spain are now at the end of 2003.

What is certain is that while housing prices in Spain are not stopped falling, they do it timidly and less and less; so the fact that they will soon reach the bottom, it seems inevitable. Now the evaluation agency Tinsa, which indicates a decline in prices in the second quarter of 2014, but it is considerably lower than in previous quarters. According to the Index of local markets from Tinsa, the housing prices have registered a decline of 3.9% in the second quarter of this year, against a fall of 6.7% in the first quarter of 2014 and 8.3% in the last quarter of 2013. Thus, the total combined fall in property prices in Spain now stands at 39.6% from the highest indicators reached in the last quarter of 2007, when began the economic crisis.

It's worth noting that if the prices across Spain fell by 39.6% from the highs of 2007, then, for example, in Catalonia, the cumulative decline in the value of real estate reaches 50.6%. At the same time, the province of Extremadura, with an annual growth of 2.8%, and Galicia, with a slight improvement of 0.1%, stand out as regions of Spain with the positive dynamics of real estate prices in the second quarter of 2014 compared with a year earlier. This is the first time since the third quarter of 2008, when was recorded the growth in the interannual index.

However, this improvement, according to the Tinsa evaluation agency, belongs in the overall process of stabilization in housing prices in Spain, but we cannot rule out further reduction of the cost of real estate. Tinsa estimates, the overall trend remains negative, namely, to the decline in property prices in Spain, although at a more moderate pace.

 

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