Ministry of Public Works Denies Rise in Home Prices

12/09/2014 – El Pais

Spanish Ministry of Public Works has provided information standing in opposition to the news spread by National Statistics Institute (INE) or the Association of Property Registrars. Thus, even though the two last housing statistics sources claim the real estate values increased by 0.8% in the second quarter, now the governmental department led by Ana Pastor proves the homes continued to cheapen during that period of time.

According to the Ministry, unsubsidized housing fell in price by 2.9% until reaching the value of 1.459 Euros per square meter which marks the lowest level since 20o4. If it comes to subsidized units, they improved in terms of pricing hitting 2.7% higher. By provinces, Spanish homes only get more expensive in the Balearic Islands showing a 3.4% increase.

Be as it may, the decline confirms the recession-triggered price slump slowed down.

The real estate market abounds in statistics, above all the pricing-oriented ones. As Jose Garcia Montalvo, economy professor from the Pompeu Fabra University, says, the INE and the Ministry of Public Works are competing to become the more important official source of information about housing prices. Private sector also contributes with numerous reports offered by principal appraisers and property portals.

Both the INE and the Ministry take under consideration new dwellings and resales, though the latter classifies all the units below 2 years old as new. Likewise, the department run by Mrs Pastor distinguishes between subsidized and unsubsidized housing but their price index counts them as one. Neither the indice of the INE if perfect as it does not take them into account at all because their regular prices do not apply to usual mechanisms of the market‘, as the Institute explains in its methodology paper. The fact that subsidized homes are cheaper does not justify divergent results of the statistics providers.

Moreover, looking closer at the sources the competitors draw the data from, the Ministry of Public Works bases on appraisal documents, whereas the INE relies on a European Union – prepared homogenized model. This design collects information about notarial deeds which normally take place few months after closing the purchase operation.

Independently from the statistical differences, experts agree that the real situation on the market marks stabilization in prices after six years of free-fall. Also, the number of transactions starts to rise, while the construction sector lags behind in terms of recovery. The INE has published a report on this topic, claiming the property sales shot up 11% in July.

Original article: El País (by Álvaro Romero)

Translation: AURA REE

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