Property in Spain Market Report January 2009 from Spanish Hot Properties
Spanish Hot Properties
Spanish Property in Spain
2008 was a pretty bad year for Spanish property and things look like they are going to get a lot worse before they get better. This is the first time that we have seen year on year price falls in the official index since the market started to slump in the second half of 2007. Officially, at least, nominal property prices have not fallen since 1993. Average property prices fell almost everywhere, though prices were still creeping up in the provinces of Sevilla (+3.4%), Cadiz (+3%), Valencia (+0.9%), and Extremadura (+0.1%), if you believe the government’s figures. Values fell the most in the province of Madrid (-7.6%), followed by Murcia (-5.8%), Tenerife (-5.8%), and Castellon (-5.3%).Over 10 years, however, Spanish property values are still 215% higher in Andalucía, 211% in Murcia, and 200% in the Balearics. Property prices on the Spanish Mediterranean coast fell by 14.3% in 2008, according to the latest monthly Spanish house price index published by Tinsa, one of Spain’s leading appraisal companies. The fall applies to both newly built and resale properties, so this is the first closely-watched index to show big falls for newly built property. Nationally, property prices fell by an average of 8.8%, taking values back to where they were at the start of 2005. At the same time last year prices were still rising nationally by 3.6%, and by 13% just 2 years ago. Property values along the Mediterranean coast have been hit the hardest in this downturn for two reasons. Firstly, much of the market on the coast is made up of second homes, which nobody really needs so sales quickly dry up when budgets get tight. And secondly, because much of Spain’s building frenzy took place on the coast, so coastal municipalities are groaning under the weight of a newly built housing glut that is depressing prices. Values in metropolitan areas, or suburbs, were the next biggest casualty of 2008, falling by 10.2%, followed by Spain’s islands – the Balearics and the Canaries – where prices fell by 9%. Spain’s big cities and provincial capitals saw prices drop by 8.1%. Spain’s G-14 association of leading developers recently admitted that new build property prices fell by 15% to 20% in 2008, making it the worst year ever for developers. Combined with the falls in Tinsa’s latest house price index these are the biggest falls in property prices ever recorded in Spain. Some experts expect 2009 to be even worse for the Spanish property market. Average Spanish property prices fell by 3.2% in 2008, according to the official house price index from the Ministry of Housing. Real prices, after adjusting for inflation, fell by 4.6%. So what do all these statistics mean for potential property buyers in Spain well according to Susana Suspenda, the Marketing and Operations manager for Spanish Hot Properties “Cash buyers should be getting a great deal in 2009 and its probably the best time to buy property in Spain with buyers moving in this year picking up the best value in distressed property sales and hugely discounted new developments from developers in trouble”. Obviously time will tell if Susana is right but some of the completed property sales in December and January do tend to lend support to Susana’s point of view. Anyone wishing to get the right advice about buying Spanish property in 2009 should contact http://www.spanishhotproperties.com/.
Spanish Property in Spain