Club Noteges Predicts House Price Stabilisation In 2016

11 January 2016 – ABC

House prices rose by 5.42% in 2015 following three years of sharp decreases, according to actual sales data compiled by Club Noteges, the leading national industry trade association, which comprises 135 companies.

Despite the positive trend in 2015, Club Noteges notes that the difference between asking prices and offer prices amounted to 32% at the national level, and was as high as 46% in some areas of Spain.

In this way, the autonomous regions that recorded the smallest gap in terms of (asking/offer) prices during the year were País Vasco and Madrid with a difference of 20%; and Navarra with a difference of 21%. They were followed by Extremadura with a difference of 30%; Cataluña with 32%; Castilla y León with 33%; Andalucía with 34%; the Canary Islands with 36%; and Cantabria, Murcia and Galicia with 37%.

The regions with the largest gap in prices were Castilla-La Mancha with 43%, Valencia with 45% and the Balearic Islands, which led the ranking with 46%. The most significant price decreases in recent years were seen in 2012 and 2013, when prices fell by 15.30% and 14.38%, respectively. They were followed by a slight decrease of 2.31% in 2014 and an increase of 5.42% in 2015.

According to Club Noteges, the highest average sales price this year was recorded in Madrid at €196,749 and the lowest was recorded in Castilla-La Mancha at €69,976. Similarly, the average discount that owners have had to accept to complete sales was the highest in the Balearic Islands, with a reduction of €87,103 on the initial price and the lowest was in País Vasco, with a discount of €36,449.

The actual sales data corresponding to the 3,054 homes that Club Noteges sold in 2015 for more than €384million, show that two spikes were observed during the year; they coincided with the regional and municipal elections in the Spring and with the Catalan and general elections in the Autumn.

Price stabilisation

In this way, the data confirms that the two spikes recorded in 2015 were caused by “electoral expectations in the Spring and Autumn rather than by structural changes in the market, which returned to its original position following the election periods”, explains the CEO of Club Noteges, José Luis Jimeno.

After the first round of elections, prices returned to the path of stabilisation that we have observed since 2013 and according to Club Noteges, all of the data “shows very similar forecasts for 2016, when house prices will once again stabillise following the general elections”.

For Jimeno, “the stabilisation of house prices will continue for at least another decade, due to the lack of demand and the excess stock generated following the explosion of the real estate bubble in 2007”.

Club Noteges brings together 610 real estate agents from 135 associate companies with 165 offices throughout Spain; some of the companies also have a presence in Argentina, Colombia, Mexico and Panama. The trade association currently leads the country’s real estate sector with a sales rate that is 248% higher than the sector average.

Original story: ABC

Translation: Carmel Drake