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February 5, 2015

The price of housing in Spain at the end of 2014 decreased by 4.5%

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The price of housing in Spain at the end of 2014 decreased by 4.5%

General stabilization of housing prices in Spain at the moment we can only be waiting. At least, according to data published by the official evaluation company Tinsa. The Tinsa’s IMIE Local Markets index, developed by the company, reflects the annual reduction in property values (both new properties and secondary) in 4.5% recorded in late 2014. This is slightly higher than decreased 4.3% recorded in the third quarter last year.

Thus, the housing market in Spain is currently characterized by the following features:

• The price of housing by the end of 2014 dropped by 4.5% on average.

• The price of Spanish property is currently in the levels of the third quarter of 2003, after falling 41.3% compared with 2007.

• The main decrease occurred in the markets of the cities of Ávila (-11.7%), Huelva (-11.1%) and Bilbao (-11.1%); and in the provinces of Navarra (-14.1%) and Lleida (-14%).

• Castilla La Mancha (-52.9%) and Catalonia (50.9%) showed the largest cumulative decline in property values.

• "This may be a case of temporary adjustments in property values as a result of the intention of the sellers to close the transaction in 2014 due to tax reasons", specify the experts of appraisal company Tinsa.

The calculated by Tinsa, IMIE Local Markets Index, also reflects the different speeds with which the Spanish real estate sector moves. Although the average price of housing in Spain began the process of stabilization one year ago, which led to a progressive reduction in prices, the official statistics show that there are areas that have not yet started the slow process of stabilization and are still experiencing a significant decline in the price of houses and apartments," – explain the experts of the company Tins.

However, the company Tinsa warns that this case of reduction of property prices in Spain can be exceptional for several reasons. "We have to wait and see the behavior of the real estate market and price developments in the coming months, as it is possible that the reduction recorded in late 2014 is a case of temporary adjustments as a result of the desire of sellers to close the sale of real estate in 2014 for tax reasons” – experts say.

Another significant reason for the current situation in the Spanish property market, according to experts, is the quality of created jobs, which is a heavy burden for prices to fall.

"We cannot forget," – continue experts of appraisal company Tinsa – "that the quality of the jobs and purchasing power and solvency of people are still a great question of uncertainty." In any case, the average annual decline in house prices by 4.5% in the fourth quarter of 2014 was significantly lower than the drop of 8.3%, which occurred in the same period in 2013, the experts suggest.

At the same time, Tins monthly statistics for December 2014 showed a general decline in 3% by the end of 2014. Therefore, we can say that the average price of a property in Spain today, according to the report, is at the level of the third quarter of 2003, there has been a correction of 41.3% compared to the maximum values of 2007.

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