ST: Housing Prices Climb Up 4.1% in Third Quarter
9/10/2014 – Expansion
After seven consecutive years of depreciation, Spanish homes became by 4.1% more expensive in reference to the same period of time in 2013. The data has been provided by appraiser Sociedad de Tasacion (ST) and it also shows that values of both new and existing properties averaged at 1.309 euros per square meter.
Housing prices increased most in case of best quality assets (up 5.7%), while units with low and average specifications appreciated by 5.1% and by 2% respectively.
In its latest ‘Quarterly Report on Real Estate Trends’, Sociedad de Tasacion estimates that in quarter-on-quarter terms, the prices fell by 1.4%. This way, current average value of the Spanish property is by 45.5% smaller than the 2007 peak number.
The study foresees pricing ‘stability’ in the next months.
By the regions of Spain, home values jumped up most in Castille and Leon (7.5%), Madrid (2.6%), the Valencian Community (1.4%), Andalusia (1.2%), Catalonia (1.2%), Murcia (1.1%) and the Balearic Islands (1%).
On the other side, they declined in Cantabria (-8.8%), Aragon (-7.1%), the Basque Country (-3.3%), La Rioja (-3.1%), Asturias (-3%), Castille-La Mancha (-2.9%), Navarre (-2.7%), Galicia (-2.5%), Extremadura (-2.4%) and the Canary Islands (-0.1%).
Speaking of the reasons, Sociedad de Tasacion explains that the rise ‘comes along with improvement in the unemployment rate and lending‘. However, these factors are still to weak to lift the market up.
At the same time, the report remarks that economic growth yet had not been reflected in households’ wealth, still fearing lack of job. Moreover, an average income person needs 7.5 years to buy an average home, while in 2007 they would need twice as much, 14.9 years.
Further into the text, the appraisal firm claims that ‘in spite of bulk housing purchases performed by foreign investment funds, property surplus is not expected to diminish promptly’.
Likewise, sales will probably keep declining for the benefit of rentals, some with purchase option.
Original article: Expansión
Translation: AURA REE