2 October 2015 – Expansión
The real estate recovery is progressing slowly but surely, at two speeds, but with a clear trend towards stabilisation. Sales are clearly rebounding, the granting of mortgages is starting to recover lost ground and, above all, prices are stabilising. In fact, appraisal values are now increasing in many large cities, especially in Barcelona.
According to data from Spain’s largest appraisal company, Tinsa, homes became more expensive in nine large cities during the third quarter of 2015, led by Barcelona (7.4%). The Catalan capital was followed by Huesca (3.7%), Jaén (3.1%), Segovia (2.3%), Cuenca (2.1%), Lleida (1.9%), Badajoz (1.7%), Las Palmas (0.8%) and Madrid (0.2%). Valladolid, where residential property prices remained stable (0.0%) completed the top 10.
The residential boom in Barcelona is evident when we look at the main sector indicators: the Catalan capital recorded a notable increase in property development activity during the first quarter of the year (the latest period for which figures are available). According to data from the Ministry of Development, the number of new build permits quadrupled with respect to the first quarter 2014. In Madrid, they decreased by 2.6% YoY.
The valuation of residential properties is proving more resistant to increases than the statistics based on house deeds (for example, INE reported an increase in house prices of 4.2% during the same period). That could be because the sales being signed involve homes for which demand is highest, i.e. whose owners have more bargaining power. And that may be being driven by the pent-up demand from buyers who have been waiting for prices to bottom out before making their purchases.
By autonomous region, house prices rose in the Canary Islands (2.3% YoY), the Balearic Islands (0.9%), Madrid (0.7%) and Cataluña (1.4%) during the third quarter and decreased everywhere else. The influence of Spain’s two largest cities in their respective autonomous regions is clearly significant, and the boom in purchases by foreigners is playing a key role in the two island regions, where more than a quarter of the properties were purchased by foreigners, according to data from the Association of Registrars.
Despite the strong data from these four regions, and the Costa del Sol, Tinsa says that “it is still too soon to be talking about a general recovery in house prices” since the word that best defines the current situation in the market is really “stabilisation”.
The largest YoY decreases by autonomous region were recorded in Galicia (-6.4% in July, August and September), Extremadura (-6%), País Vasco (-5.6%) and Murcia (-5.1%). (…).
Original story: Expansión (by J.M. Lamet)
Translation: Carmel Drake