The leading Spanish property valuation firm Tinsa published its most recent data concerning the market value of housing last week, reporting that in the month of December the on-going recovery in prices across the country continued in all categories.
The year-on-year increase was slightly more pronounced than in November, amounting to 6.5 per cent across the country, and the firm reports that their index is now 14 per cent higher than when the market bottomed out in February 2015 (although still 34.6 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 22 per cent in the last three and a half years, while elsewhere there are increases of 21.6 per cent in the Balearic and Canary Islands and 18.1 per cent in Mediterranean coastal areas, but only 4.9 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 the islands at 10.6 per cent, followed by increases of 8.7 per cent in the regional capitals and other large cities, 6.7 per cent in Mediterranean coastal areas, 3.6 per cent in metropolitan areas and 2.9 per cent 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 November) show a 3.9 per cent year-on-year increase according to Tinsa (although the government’s central statistics unit places it at 2.8 per cent), while the accumulated rise over the first eleven months of the year is 11.6 per cent according to Tinsa (11.3 per cent according to the government figures).
Building licences: the latest monthly data (for October) show a 16.1 per cent year-on-year increase and a 23.2 per cent rise in the first ten months of this year.
Mortgages granted: the latest monthly data (again for October) show a 22.9 per cent year-on-year increase and an 11.7 per cent rise in the first ten months of 2018.
Unemployment: the latest monthly data (for December) show a 6.17 per cent year-on-year decrease during 2018.
Euribor: the interest rate on which most mortgage repayments in Spain are calculated is currently at -0.129% (the average for the month of December), having risen by 0.02 points since November.
Despite the increase in mortgage interest rates, these figures provide no reason to expect any slowdown in the recovery of the market in general terms, although the suspicion is being 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.
On the other hand, the conditions appear to be right for the recovery to reach areas of Spain where it was slower to start, and this is reflected in the fact that in recent months the category of “other municipalities” in the Tinsa analysis has at last begun to show some upward movement.
Source: Spanish News, January 2019