Spanish House Prices Rise – First Time in 41 Months
The Spanish property market could be turning the corner if a report from Fotocasa.es and the IESE business school are to be believed.
The average price of resale property rose 0.7% in July compared to a month earlier, the first rise in 41 months. The majority regions saw and increase with Galicia, Asturias and Extremadura the only regions where prices fell (by 0.1%, 0.2% and 1.2% respectively). In Andalucia prices remained stable.
Although it’s far too early to jump to conclusions based on a month’s data, there are other indications the market might be about to turn. A report by the Ministry of Public Works (Fomento) shows the Spanish housing glut is now shrinking due to big discounts and a total collapse in building activity.
The Spanish “bad bank” has also this week sold the first phase of its property portfolio to institutional investors HIG Capital.
According to OECD figures Spanish house prices are now at 2000 levels (around 30% down) before accounting for inflation. After inflation prices have more than halved.
It’s a fool who predicts the bottom of a property cycle but what is certain is that from an agents’ perspective the international Spanish property market is looking healthier than many other European markets. Prices have dropped further an almost any other European country. International buyers are a small but buoyant proportion of the market and I’d be willing to bet on the domestic market turning the corner by 2015.