Average Spanish house prices rose on a quarterly basis in Q3 for the first time in five years, according to data from the property register. Is this a harbinger of the end of the crash in Spanish house prices?
The Registrars themselves raise the question in their latest report, but go onto say we’ll have to wait a few more quarters to see if this is the start of a trend, or just a blip on an otherwise steady downward flightpath.
The quarterly price index compiled by the registrars might have been fractionally positive for the first time in five years, but the annualised figure was still negative, albeit not as much as recent quarters. According to their figures (based on sales inscribed in the registry) Spanish house prices fell an annualised 5.35% over 12 months to the end of Q3. Peak-to-present, prices have fallen 31%, taking them back to where they were in mid-2003.
The Housing Department in the Ministry of Development has also released it’s house price index showing average prices down 4.5pc over 12 months to the end of Q3, and -0.5pc in a quarter, to 1,495 €/m2. According to this index, the cummulative fall from the peak reached in Q1 2008 is 29pc.
There is good reason to believe quarterly rise in the registrar’s index might just be a blip. As the notaries recently pointed out, sales are now so low that price data has become more unreliable than normal, making it more likely that one quarterly rise in prices is just an anomaly.
And as Fernando Encinar, head of research at the Spanish property portal Idealista.com, recently explained in a press release, prices are still far from what typical Spanish families are able to pay, and the inventory of unsold homes is still growing.
Personally, I expect the overall story in 2014 to be one of average house prices continuing to fall. But against that backdrop some segments will bottom out, and even stage a mild recovery. If you are after an attractive property in a good area on the Spanish coast, or in prime Barcelona and Madrid, I don’t think you’ll get a better price than today.