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The National Institute of Statistics Confirms First Rise in Prices Since 2008

8/09/2014 – Expansion

Prices of unsubsidized housing in Spain increased by 0.8% in the second quarter of 2014 in comparison to the same period 2013. Thereby, they took up an upward path for the first time since Q1 2008. Year-to-date, the values rose by 1.4%. The data has been prepared with application of the Housing Price Index elaborated by the National Insititute of Statistics.

The figures registered in the first quarter of 2014 have already been reflecting a slowdown in the housing price slump that reached 12.6% throughout 2012, 14.3% in 2013 and then stood at 8%.

New homes appreciated by 1.9%, three bps above the Q1 data and this rate advanced for the first time since Q4 2008.

Used homes and apartments rebounded 0.2% (hitting the highest since Q4 2007) and went up by 2 basic points over the previous quarter. YTD, new units got by 0.8% more expensive, while existing ones by 1.5%.

Quarter-on-quarter (Q2:Q1), unsubsidized housing values rose by 1.7% after two consecutive quarters of falls (by 1.3% in Q4 2013 and by 0.3% in Q1 2014).

According to this source of information, all Spanish regions except for the Basque Country (-1.4% annually) have seen prices rising in the second quarter of 2014. The greatest increases have visited Murcia (+5.6 bps to 1.2%) and the Valencian Community (+4.9 bps to 2.3%).

In regard to the first quarter, 14 out of the 17 regions showed a positive change with best in the Valencian Community (+3.1%) and the Canaries (+2.8%). On the other end of the ranking, one may find the Basque Country (-0.9%) and Cantabria (-0.3%). In the Balearic Islands the values stagnated.

In quarterly terms, used housing leaves behind the new units due to its great supply volume but year-on-year, just the opposite happens.

Experts from the sector try to explain the phenomenon. First, Manuel Gandarias, research director at pisos.com, says it is due to major percentage of new homes in relation to used ones and greater room for negotiations in case of the latter. In turn, Fernando Encinar, his collegue from idealista.com, says the rise has been caused by the huge interest of small and medium-size investors in the Spanish real estate.

They see eye to eye when it comes to recovery: it is too early to celebrate it, they say, though there have been improvements in transactions, lending and pricing levels.

 

Original article: Expansión (by M. Castillo)

Translation: AURA REE