House price index Spain
Increases in house prices in Spain stalled a little in the first quarter of 2015 according to the National statistics office.
The first quarter of 2015 report which was published yesterday showed a small decline of 0.6% when comparing prices Spanish property to the last quarter of 2014. The annual rate of the house price index which is assessed against prices from 2007 rose 1.5%.
Prices for homes have been rising, all be it slowly, against the index from the 2nd quarter of 2013.
New Builds versus resales
New build prices rose by 4% meaning that resale’s dropped by some way in the first quarter. The rise in new build prices may come from a mistaken premise by Spanish developers that the housing market has not only stabilized but is about to take off again. It is interesting to see that when looking at house sales new build sales are down and are at a significantly lower percentage of total sales than they used be.
The drop in resale prices can be contributed to private sellers in Spain remaining realistic about what price they must accept in order to sell within a reasonable timescale. At present this has concluded with more sales of this sector and type of purchase which is where a recovery starts. At some point the increase in sales will translate into prices rising but for now private property sellers are clearly more concerned about selling than trying to get premium price in what remains a difficult market with an oversupply of product.
As can be expected regionally the story can differ. In areas sought after by international buyers house prices against the index are rising at a much faster pace than in traditional Spanish inland areas.
The coastal resorts like Murcia, Andalucía and Valencia performed above the mean average.
The only regions who outperformed quarter 4 of 2104 were the Balearics and the Canary Islands. Interestingly however despite this performance on price, which could have been expected due to higher levels of buying activity throughout 2014, both have see a slow down in total sales during 2015 at a time when other regions have increased more significantly.
Number of sales and prices seem to be, as ever, intrinsically linked to each other as supply and demand fluctuates.
Is the housing market improving.
All the data suggests that in the last 12 months the Spanish housing market has stabilized with more buying and selling activity and small price increases but so far what is also suggested is that we are a long way from prices increasing dramatically. Whenever, in an area or type of seller the market thinks that time might have come to look for higher prices it appears to have a knock on effect on whether they sell or not.
All sellers need to remain realistic about the price they can command for property as whilst the market is no longer dropping like a stone, buyers remain wary of paying over the odds and continue to look for bargains.
Sales of Spanish Homes
On the same day as the quarterly price index was published the house sales data was released for the Month of April. The number of dwellings where titles changed was up by 9.4% when considering sales against April of last year.
Sales registered at land registry fell from the Month of March but it must be taken into account that sales registered at land registry in April will probably relate to sales that took place in February which is not one of the biggest traditional selling months in Spain.
Types of property transfers
Apart from donations all areas of property transfers are up on an annual basis. Including unfortunately other titles which include bank repossessions.
Of house sales 77% were resale’s and new builds only formed 22.9% of total sales of homes. At one point in Spain during the boom years new builds outsold resales as a percentage of total sales.
Regional highs and lows
Andalucía as is normal had the highest absolute number of buyers with sales of 11,368 properties. Cataluña and Madrid clocked up the next highest level of sales.
The Canaries for a further month showed a drop when assessing against the same month of the previous year, falling by 3%, they were however one of the highest performers in terms of sales per 100,000 inhabitants this tends to indicate the market is boosted considerably by non residents owning property in Spain, the same would seem to be true for Valencia who also had very high sales per 100,000 of population and mediocre increases in absolute sales.
Other regional data shows that Murcia dropped by 11.5%, the Balearics only rose by 3.9% but this is against a back drop of strong sale levels in 2014.
As a trend over the last 5 years the amount of homes sold rose marginally against the previous month but this is against a normal trend of sales falling in April over the March which indicates things are still moving forward in a positive manner.