Spanish Housing Worse Than Reported As 2013 ‘Black Hole’ Distorts Data

6/11/2014 – El Economista

We all know the real estate sector of Spain presents figures much better than in 2013. However, the problem lies in the fact that the previous year was exceptionally deppresive and odd and therefore the data may mislead. If 2014 compared with the 2012 performance, one may easily notice that the residential segment fares quite worse.

These are the findings published by Idealista News, which moreover assures that ‘the black hole the property market fell into in 2013 was a sinkhole which brought many to overvalue any positive information coming from the official statistics units causing an erroneous sensation that the worst is over’.

In 2013, a series of factors accumulated and cooked up ‘the perfect storm‘ for the residential sector. After the cancellation of the PIT deduction on the main home purchase, doubts about the future of the market, banks’ aversion to the risk and poor outlook for employment persisted.

What is more, Idealista News reminds that ‘the year 2013 was especially turbulent due to deep cuts carried out by regional authorities and city halls’.

Comparison with 2012

Analyzing the 2012 and 2014 figures, the portal reports that in August 2014, 23.525 homes were sold (data by the National Institute of Statistics, INE), by 15.1% less than in the same month in 2012. Likewise, mortgage approvals in July this year posted 25.5% lower than they did in 2012.

When it comes to prices, depending on the sources (the Ministry of Public Works, INE or Idealista), the year 2014 registers a slight decline (up to 4.4%) or even rise on year-on-year basis. However, if compared to 2012, the fall marks between 9.2% and 14.3%, with no trace of rebound.

‘There is no doubt we have the recession rather behind than ahead, but the conclusion that the market is being improving taking solely the few indicators as a reference is not only wrong, but even hazardous. (…) We have managed to take the real estate out from the intensive care ward but we stay on the same floor as before we reach a balance, still many adjustments are left to be made’, claims Idealista News.


Original article: El Economista 

Translation: AURA REE