Everyone seems to agree property prices in Spain are falling – but the argument is over just by how much and who is telling the truth about the real state of the market.
A flurry of recent figures confirm prices are still in free fall as the government dithers over calling for a Eurozone bail-out and one in four are unemployed as the economy nosedives in to recession.
One index, the IMIE compiles figures from analysing housing transactions covering around 20% of the market a year.
The index shows an average house price fall of 11.6% – with Madrid and major cities falling even more at 13.5%.
The total drop since the market peaked in December 2007 is 32.9%.
Mallorca prime property
Marc Pritchard of Taylor Wimpey de Espana recently issued some data showing an 11% increase in property sales by the firm in the past year – and a massive 33% rise in sales in The Balearics.
“Top properties in prime locations do sell at the right price in Mallorca. Prices are stable on the island – it’s a resilient market with a good reputation,” said Pritchard.
“One thing to note is that the German market is definitely back. We have certainly seen much more interest from German buyers – probably the strongest in 10 years – on Mallorca. Last month 21% of our sales came from German buyers.”
Meanwhile, another study by the University of Pompeu Fabra, Barcelona, and property firm Tecnocasa rubbishes the rest of the house price surveys and claims Spanish house prices have collapsed by more than 50% in the past five years.
Findings also show property prices dropped by 20.73% over the 12 months to end of June.
Valuing Spanish property
The university explained the research is based on real transaction prices, not valuations or estimates like other data.
“They are prices from the front line, real prices based on actual sales made,” said report author Professor José García-Montalvo
“I suspect these figures are closer to the truth than any of the house price figures published by the Government, National Institute of Statistics, or appraisal companies, which all base their figures on valuations done by people who don’t know the real market price.
“For example, the latest data published by the notaries would have us believe that house prices have declined just 26.8% since the peak in late 2007, giving up just the last couple of years of gains made at the tail end of the boom. Bearing in mind the housing crash and economic situation Spain is going through, who on earth is going to take that figure seriously?”