The price of finished housing (both new and used) accumulated a decline of 3% between December 2013 and December 2014, according to Tinsa’s General and Great Markets IMIE index. The fall is far lower than the one registered during the period of 2013, when average housing in Spain became a 9.2% cheaper. This is another piece of information that reveals that the real estate market is settling.
We think that in 2015 prices will be stable and some reputable sources already say that Spanish Property Prices in 2016 will rise for first time in 12 years.
At the close of last year, Tinsa’s General IMIE index recorded 1.343 points, setting the figure at the same level of July 2003 and has accumulated an adjustment of 41.2% since record levels of 2007.
During 2014, the five areas analysed (“Capitals and Big Cities”, “Metropolitan Areas”, “Mediterranean Coast”, “Balearic and Canary Islands” and “Other Municipalities”) have slowed down the decline rate of housing prices from the previous year, which were characterised by year to year declines above 10% in several areas.
Among the areas, the “Metropolitan Area” stood out in Tinsa’s IMIE index of December with only a year to year adjustment of 0.2%, against the 11.5% registered in 2013. “Given that December is the last month of the year, the year to year reference is equivalent to the price variation registered during the period of 2014”, Tinsa clarified.
The value of flats in big cities declines a 2.8%.
On the other hand, both “Balearic and Canary Islands” and the municipalities included within “Capitals and Big Cities” had a decline in their housings during the last year below the national average. In the islands, the adjustment was of a 2%, not far from the 3.2% registered for the period of 2013. On the contrary, the year to year decline of 2.8% of the capitals and bigger cities is markedly more moderated than the decline of 11% of the year 2013.
The biggest adjustments during the last 12 months were registered in the areas “Other Municipalities” (-4.7% year to year) and the “Mediterranean Coast” (-4.5%). “The situation after seven years of crisis is that the average price of housings in Spain has a tendency to settle around the values of the summer of 2003”, Tinsa indicates.
The municipalities in the Mediterranean Coast accumulate the biggest adjustment, with a decline in prices of 49.5% since record levels of 2007. These are followed by “Capitals and Big Cities” with a decline of 45.2% and “Metropolitan Areas”, with 43%. The variation from the highest peak in the cycle is less in the “Balearic and Canary Islands”, where the finished housing price is a 31.1% cheaper, and in smaller municipalities (“Other Municipalities”), which have suffered an adjustment of 35.3% since 2007.
Stabilisation in 2014 and foreseeable low in 2015
Looking ahead, the assessor reminds us that “the process of price stabilisation started in the second semester of 2013”. “Tinsa’s IMIE index has been characterised during 2004”, she adds, “by a moderation of the price decline rate, including certain ups and downs in its trajectory, which are to be expected in stabilisation periods.
The situation of 2015 will depend on the evolution of economy and employment.