Residential property prices and sales in Spain are continuing their downward spiral, according to the latest published figures.
Spain’s leading valuation company, Tinsa, reports that property prices fell by 8.9% over the last 12 months with coastal areas, the regions most popular with real estate investors and second home owners, seeing the biggest drop.
Average prices in coastal areas fell by 10.3%, but there is hope that prices are now getting towards the bottom as the average drop in prices is slowing since they reached a peak of 13.5% in April.
Meanwhile figures from the Ministry of Housing shows that the number of residential sales fell by 31% in the first six months of the year compared to the first half of 2008.
A total of 217, 589 homes were sold in the first half of the year, compared to 316,096 in the same period of 2008. This represents the lowest number of home sales in a six month period since the Ministry started publishing its figures in 2004.
Again the decline appears to be slowing as sales in the second quarter of the year were better than in the first three months of 2009. On a quarterly basis transactions increased by 8%, whilst year on year sales were only down 28% in the second quarter.
However, Spanish property expert Mark Stucklin points out that figures do not always give a clear picture of what is actually happening in the marketplace.
‘Between August 2001 and this August, average Spanish property prices rose by 94%, that is they almost doubled. Relative to Spanish incomes, property is still over priced, at least as far as the Tinsa index is concerned,’ he explained.
‘But then again, you can’t take this index too seriously. It’s based on valuations, not actually transactions prices, so it only tells us what valuations are doing. My guess is transactions prices are significantly below the index, so maybe property isn’t that over-priced after all,’ he added.