The Institute of National Statistics issued today the first quarter house price data for 2014.
The figures published today support the assumptions that Spanish property prices are bottoming out in general across Spain and the view that by 2015 prices may in fact start to grow again.
Since 2007 property prices in Spain have fallen year on year with many areas experiencing a drop of 40% or more since the peak.
Why did prices fall so badly in Spain
Added to the oversupply in housing stock when the property market collapsed, and the economic crisis in Spain was the fact that lending for the years of 2009 through to 2013 almost dried up with all Spanish Banks actively shrinking their mortgage books by way of limiting the granting of loans and margin increases. All these pressures during the last 5 or 6 years have helped push down prices in Spain.
In 2014 the Spanish Banks announced renewed activity in the residential mortgage market. Most Banks incorporated lending targets into their budgets for the year of 2014 and we have seen some relaxation on pricing and criteria’s. Other factors like a more realistic view of what must happen to prices to sell houses during 2013, particularly by the Banks helped
The access to Spanish mortgages and an upturn in the economic climate has helped Spain regain some confidence in its property market and this has started to increase sales as buyers, considering buying in Spain genuinely believe 2014 is the right time to secure their holiday home or get on the Spanish investment property ladder at a point when prices are at rock bottom.
What were the key statistics coming out of today’s data
Whilst still showing an overall small decrease in house prices, quarter one showed an annual increase of some 6 points from the last quarter of 2013 at minus 1.6%. For new housing this was 1.1% and for resale’s slightly higher at 1.7%.
When taking into account the last quarter of 2013 and first quarter of 2014 new housing increased by 0.1% whilst resale’s housing prices dropped by 0.4%.
The annual rate of variation showed an increase in all the regions of Spain and four communities registered positive annual increases. Of these four regions Madrid showed an increase for the first time since 2010 and the Balearics for the first time since 2008.
The lowest annual increase was registered in the Canary Islands but this was against a lower overall drop than average over the last few years.
Other areas performing better than most regions in the first quarter included Murcia, Cataluña and Andalucía.
This week the property sales for April will be released and should show an upturn in number of properties sold.