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Tinsa report 4.7 per cent rise in Spanish property prices

By Mas Property

on Wed Sep 06 2017

The latest data published by leading Spanish property valuation firm Tinsa on Thursday suggest that although the recovery of the market is consolidating in general terms there appears to have been something of a “blip” during the month of August on the Mediterranean coast. Tinsa’s nationwide price index at the end of July was 4.7 per cent higher than a year previously, and while this is the twelfth month in which upward movement has been reported it is also the largest year-on-year increase in that period.

As has become customary the main driving force behind this appreciation in value of residential property is the category of regional capitals and major cities, where a rise of 6.8% is observed, but this increase was almost matched in August by a similar one of 6.7% in “Metropolitan Areas”. Other rises are reported in the Balearic and Canary Islands (2.8 per cent) and in the catch-all category of “other municipalities” (2.6 per cent), but in Mediterranean coastal areas Tinsa report a 0.8 per cent decrease in comparison with August 2016.

Exactly why this is the case is not clear. Prices had shown an increase in this category for the last five months, and so far in the first eight months of 2017 the Tinsa index in the Mediterranean coastal area has gone up by a healthy 4.6 per cent. In addition, the current index is significantly higher than in August of 2014 and 2015, and one possibility is that the figure produced for August last year was unusually high: it may be that September’s data return to what has become normal for the Mediterranean over the last year or two, i.e. a steady if not spectacular increase in property values.

The latest bulletin also contains the monthly “market snapshot” which underlines reasons to expect upward or downward movements in the value of homes in Spain, summarising the following indicators among others:

– Sales figures: the latest monthly data (for June) show a 19.7% year-on-year increase and a 13.5% rise for the first six months of the year.

– Building licences: the latest monthly data (for May) show a 7.9% year-on-year increase and a 13% rise over the first five months of the year.

– Mortgages granted: the latest monthly data (for June) show a 16.8% year-on-year increase and an 8.4% rise over the first six months of the year.

– Unemployment: the latest monthly data (for July) show an 8.52% year-on-year decrease.

– Euribor: the interest rate on which most mortgage repayments in Spain are calculated is currently at -0.156% (the average for the month of August), its lowest level ever.

Bearing all of these factors in mind, there is a temptation to discard the August price decrease in the Mediterranean as a one-off, although of course time will tell. The economic indicators all point to there being more demand for housing in Spain, both inland and on the coast, and to continuing high demand for mortgage finance, while at the same time the number of new properties in construction appears to be increasing in response to this demand. Of course there remains considerable variation among the different regions, provinces and even individual municipalities of Spain, but even so the outlook appears positive.

Source: Spain News Today, Sept 2017

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