House Prices Rose By 2.5% In 2014, After Six Years In Decline

16 February 2015 – Expansión

Changing trend / The Association of Registrars (el Colegio de Registradores) reports the first house price increase since the real estate bubble burst. House purchases by foreigners break historical records.

The housing market is generating positive results in a disparate and heterogeneous way, step by step, but it is on the road to recovery and that is what matters. The figures vary a lot depending on the statistical source chosen, but the trend does not: the residential real estate market has changed direction and is heading towards the famous light at the end of the tunnel. That was certified by the Association of Registrars yesterday, which announced a 2.55% increase in house prices in 2014.

This is the first rise in house prices since the crisis erupted in 2008. Based on these results, the cumulative decrease in prices from the peak levels achieved in 2007 is almost -32%, according to the registrars’ methodology, which is based on the methodology of repeated sales, proposed by the economists Case and Shiller, which takes into consideration only data from those homes that have been sold at least twice during the period under analysis (1995-2014, in this case).

The Repeated House Sale Price Index (Índice de Precio de la Vivienda de Ventas Repetidas or IPVVR) “shows the change in the trend that we have observed during the last few quarters, leaving behind a long period of price decreases, and making way for a phase characterised by stability and small quarterly increases”, say the registrars.

Specifically, the IPVVR “shows that prices increased by 0.91% during the last quarter, taking the cumulative annual increase to 2.55%”. In this way, 2014 “was the year in which the house price trend turned a corner”, they explain.

This means that “in terms of prices, the real estate market seems to be bottoming out and heading towards price consolidation, at levels similar to those last observed in 2003”.


77,881 house sales were recorded during the fourth quarter of 2014, representing an increase of 7.33% on the same period in 2013. In 2014, 318,928 house sales were recorded in total, which represented a decrease of 3.1% with respect to 2013. This data is almost identical to that compiled by INE (319,389), although according to the National Institute of Statistics (Instituto Nacional de Estadística or INE), the volume of sales increased by 2.2%. In both cases, the data shows a trend towards stabilisation.

One of the main stories to come out the registrars’ statistics is that the purchase of homes by foreigners reached a new record high last year: accounting for 13% of all transactions. Foreigners acquired 41,492 residential properties in total, whereby completing five consecutive years of growth, up from from 4.24% in 2009.

The composition of nationalities remained relatively stable, although the decline in the number of Russian investors was noteworthy; they moved from third place (in the ranking of foreign purchasers) to sixth place in a single quarter. Thus, the British led the ranking, accounting for 18.6% of foreign purchases in the fourth quarter, followed by the French (9.4%), German (7.2%), Belgian (6.9%), Italian (6.1%), Russian (5.8%), Swedish (5.8%), Chinese (4.1%) and Norwegians (3.7%).

Finally, mortgage debt per household grew by 0.89% year-on-year in the fourth quarter.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake