House price index in Spain

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TINSA house price index

Whilst various bodies issue house price indexes for Spain one of the longest running is TINSA.

TINSA are a Bank of Spain regulated Valuation Company and one of the largest of such in Spain.

The pricing index they issue is based on valuations undertaken within the month rather than sales but they have been tracking the market since 2001 so against their own figures distinct trends can be identified.

In September TINSA report a continuing decline in average house prices which ties in with the INE figures for August who obtain their house price data from sales at land registry and reported a continuing drop in Spanish real estate prices, all be at a slower pace than seen in previous months and years.

Buyer activity and interest in Spanish property

Whilst there is more interest from potential buyers in Spain, and in certain pockets, and for certain types of properties a general uplift in activity, the data on average house prices as reported, seems to be showing the bottom of the market has not yet been reached.

The level of visitors to the recent a Place in the Sun exhibition in Birmingham confirmed that there is still plenty of interest from UK buyers in owning a holiday home, and Spain remains a favorite destination, but wanting to buy, agreeing a purchase price and actually going through the legal buying process is a different ball game to just showing an interest in buying.

Regional differences

Areas like the Balearics, who had not suffered the same drop per meter square as mainland Spain since the height, dropping on average 32% in comparison to the general 41.7%, and who earlier in the year started to show small increases seem to have stalled with a year on year drop of 3.5% in Septembers TINSA figures when compared to September 2013.

The general market fell by 4.2% slightly down on the August decline of 4.3% and heavily influenced by a drop of 9.2% in other municipalities which is Towns other than those areas around large cities.

Metropolitan areas, this being Towns around major Cities, performed the best showing only a 0.8% decrease in price to the index when compared to September of last year.

The coastal areas which includes areas attractive to nonresident buyers dropped by 2.9% so well below the average but this is against a drop from the height of the market of 47.3% which is the largest drop for all regional types.

Rate at which house prices are declining

The rate by which prices are falling has slowed considerably in the last 9 months with an overall drop since December of last year to now being 3.8% against a drop in the corresponding 9 months the previous year of 8.8%.

The index TINSA use which is set against 2001 house price levels is now reflecting the index level of June 2003. It may well be that prices have to reach the index as in place of beginning of 2002.

With less positive news than earlier in the year around the overall economy in Spain and with a slowdown in the growth of exports and continuing unemployment at very high levels it is most likely house prices will not bottom out until the end of 2015.

For those considering buying in Spain this could be good news, you can currently find real bargains, but this looks set to continue for a few months yet.

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