The leading Spanish property valuation firm Tinsa published its latest batch of monthly data regarding the market value of housing across the country on Tuesday the 5th of March, reporting that in the month of February on-going recovery in prices across the country appeared to slow a little.
The year-on-year increase of 4.1 per cent was the lowest observed since April 2018, and the firm reports that after dropping by 1 per cent during the month their index is now 13.8 per cent higher than when the market bottomed out in February 2015 (although still 34.7 per cent lower than at the height of the boom in late 2007).
The staggered nature of this recovery can be seen in the breakdown of the figures, which shows that in Spain’s regional capitals and other large cities market values have risen by over 23 per cent in the last three and a half years, while elsewhere there are increases of 18.4 per cent in the Balearic and Canary Islands and 13.6 per cent in Mediterranean coastal areas, but only 5 per cent in the catch-all category of other municipalities.
As for the breakdown of the December figures, the sharpest year-on-year rise is in regional capitals and other large cities at 7.2 per cent, followed by metropolitan areas at 4 per cent and Mediterranean coastal areas at 2.9 per cent. However values are calculated to be only 0.3 per cent higher than a year ago in the Balearic and Canary Islands, and 0.6 per cent higher in other municipalities.
The latest bulletin also contains the monthly market snapshot in which Tinsa highlight reasons to expect upward or downward movements in the value of homes in Spain, summarizing the following indicators among others:
Sales figures: the latest monthly data (for December) show a 5 per cent year-on-year increase according to Tinsa (although the governments central statistics unit places it at 3.8 per cent), while the accumulated rise during 2018 was 10.9 per cent according to Tinsa 10.1 per cent according to the government figures.
Building licences: the latest monthly data (also for December) show a 24.7 per cent year-on-year increase and a similar rise over the course of 2018.
Mortgages granted: the latest monthly data (again for December) show a 1.2 per cent year-on-year increase and an 11.3 per cent rise in the year as a whole.
Unemployment: the latest monthly data (for February) show a 5.22 per cent year-on-year decrease during the last 12 months.
Euribor: the interest rate on which most mortgage repayments in Spain are calculated is currently at -0.108% (the average for the month of February), having risen by 0.08 points in the last month.
Despite the increase in mortgage interest rates, much of which can be attributed to seasonal variation, these figures provide little in the way of reasons to expect any slowdown in the recovery of the market in general terms. However, it is worth noting that Tinsa report a month-on-month decrease in their average market value index, and this may reflect a tendency towards stabilization in areas where the market recovery started earliest.
It is also worth remembering that suspicions have been voiced in some quarters that firms such as Tinsa may be under pressure to over-value properties for mortgage lending purposes, enabling banks to loan a higher percentage of the real purchase price, a practice which was a feature of the speculative buying during the boom years prior to 2008.
Source: Spain News Today, March 2019.