Words: Ashley Rigg
Published: 12th January 2012
*Spanish new build prices fell just 4% in 2011
Prices of new build properties in Spain fell just 4% in 2011 according to new figures from Sociedad de Tasación, one of Spain’s leading appraisal companies.
The figures, if correct, indicate that new build prices are falling at roughly half the rate of average prices which fell 8.2% (Idealista), 8.1% (TINSA) or 7% (INE, the “official” figures) in 2011 depending on which source you use.
Spanish house price figures are often disparaged by agents for being inaccurate as the figures reflect asking not sale prices, with the latter being in the region of 20% lower according to Idealista.
However, even if we accept that the absolute numbers are inaccurate, there are still some interesting insights to be seen in the direction of the numbers (if we assume the figures from each source are consistently inaccurate).
For example, to put the 2011 figures into perspective, Idealista numbers indicate prices are down an average of 20% since the crisis began. This means that 2011 with falls of 8% accounted for a huge proportion of the total price fall since 2007. All the leading indicators show that price falls accelerated in the back end of the year suggesting that the beginning of 2012 could see further falls.
The new build figures indicate that many developers are either struggling to reduce prices to meet market rates due to financial restrictions or are refusing to accept the new reality.
As ever I’d be interested in hearing your thoughts.
Source: Global edge
User Comments
There is a good chance that 4% could be attributed to the tax relief (which coincidentally happens to be 4%) bought in last year on new builds too.
Having tried to buy recently myself - lending is the core problem - unless you are buying an overpriced bank-owned repossession, or bank-owned new build, you can forget about getting a mortgage - this backed up today by an article on businessweek - http://news.businessweek.com/article.asp?documentKey=1376-LXNOOU0UQVI901-5R9DV1NLMPTQDUA59O5QVOIV2O
Peter Mindenhall,
IPIN - International Property Investment Network