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The Property Prices in Spain today

January 2015

Analyzing the prices of the property market in Spain must distinguish among the price of properties for sale, the values of properties given by appraisers and, most important, the price of properties in Spain actually sold. Being data taken from the same period, the different figures show a slight change of trend.

Prices of Property in Spain for sale

According to the report from Fotocasa, the Spanish real estate site, the average price of resale property in Spain today is 1,632 euros per square meter, which is a variation of a (-0.1)% from the previous month.

The prices of property in Spain graph. Evolution 2014

These values correspond to the stock of property for sale in Spain. Therefore, are based on housing prices announced in its media and are offering prices that normally should decrease to be accepted by a buyer.

Values of Property in Spain given by appraisers

New property

The average price of new housing in Spain fell by 2.2% in the whole of 2014, moderating in more than five points the fall that experienced in 2013 (-7.8%), according to a report released by the Spanish appraisals company Sociedad de Tasacion, which also notes that in the last six months of 2014 contraction rate was only 0.4%, compared with a fall of 1.8% in the first half.

Specifically, the average price per square meter in the provincial capitals in Spain amounted to 1.994 €, representing 179,400 euros for a standard dwelling of 90 square meters.

The average price of new housing in Spanish cities with population greater than 100,000 inhabitants who are not provincial capitals stood at 1,661€ / m2 representing an annual decrease of 2.2%.

The average price of new properties in cities with population greater than 50,000 inhabitants who are not provincial capitals stood at 1,564€ / m2 representing an annual decrease of 1.9%.

The average price of new build properties in cities with population greater than 25,000 inhabitants who are not provincial capitals stood at 1,461€ / m2 representing an annual decrease of 2.2%.

The average price of new housing in the cities analyzed with less than 25,000 inhabitants has been at 1,456€ / m2, representing an annual decrease of 1.6%.

From their maximum peak, prices for new housing in Spain accumulate a decrease of 40.2%.

Graph of the evolution of the prices of property in Spain in the last years

The slowdown in the fall in prices has coincided with a slight increase on the activity as a result of a relative relaxation in the difficulties obtaining financing, and the improvement of economic expectations of Spain.

In addition, there has been an increase of interest in the purchase of important packages of property in Spain by investment groups, while the proportion of offers from individuals within the set of homes offered with less than five years old has apparently stabilized.

The prices of the second hand property market in Spain

The used house prices in Spain slowed his fall in 2014, with a drop of 5%, which has left square meter in 1.594 euros. While the general trend still down in the main municipalities of the country, some local markets begin to present positive inter-annual variations.

The market is divided into two: first, areas that may have bottomed out or are about to do so, due to investor interest seeking profitability via rental property. In these markets (large cities and some tourist areas) the prices seems to be adjusting and the evolution seems to make a very moderate uptrend.

On the other hand, there are many provinces in Spain where prices continue falling, although in a much smoother way, due to the mismatch between the property offered and the lack of solvent buyers.

Today, most of the operations are in the hands of investors (both large international groups and small Spanish investors seeking higher returns on their savings) which are the main beneficiaries of the small opening to credit that is starting to produce.

The bad news is that for those buyers who do not have significant savings, continue being very complicated to get a mortgage in Spain and to have access to the ownership of a property in Spain during 2015.

Prices of Property in Spain actually sold

To see the actual home sales data in Spain, we consider, first, the indices published by the Spanish National Statistics Institute; and secondly, the statistics published by the notaries in Spain who are responsible for validating the public deeds to be inscribed in the Land Registry.

Housing Price Index (HPI)-Indice de Precios de Vivienda (IPV)

The Housing Price Index (HPI), base year 2007, is issued by the Spanish National Statistical Institute and aims at measuring the evolution of homes sale prices, both new and second-hand, over time.

The origin of the information used to calculate the HPI comes from databases of purchased titled homes provided by the General Council of Notaries, where transaction prices of houses are obtained, as well as the weights assigned to each set of houses with common characteristics.

This index shows the percentage of variation in the price of housing in Spain in comparison to the year 2007, which was when the index started to be published.

The last index issued belongs to the third Quarter of 2014 noting that the annual variation of the housing price index (HPI) in the third quarter of 2014 decreased five tenths and stood at 0.3%, which slows down the prices rate of growth the last two quarters.

evolution of property prices in Spain. Third quarter 2014

By type of dwelling, the annual rate of new housing prices stood at 0.8 per cent, more than one point below the previous quarter.

The annual variation of second-hand housing prices reduces one-tenth, to the 0.1%.

In the short term, the quarterly variation of the general HPI in the third quarter of 2014 is a growth of 0.2%.

Properties purchased in Spain, according with the Spanish notaries

According to the latest data published by the CENTER OF STATISTICAL INFORMATION OF THE NOTARY, the purchase of housing has increased by 14% in 2014, although its price is reduced by 1.5%.

Graph of Property prices in Spain. Number of dwellings actually sold

Sale of Urban properties

The number of transactions registered in November saw an annual rising of 14%, amounting to 18.5% in the seasonally adjusted series. The average price per square metre of sold dwellings was 1.194 euros, which represents a year on year drop of 1.5% and a cumulative 36.7% since the beginning of the crisis in 2007.

Mortgage loans

The mortgage loans for the purchase of a home increased a 37.2% year on year in November, in line with the stabilization of the purchase and sale of housing. Despite this, their average amount dropped 0.4% in interannual terms up to 109.022 euros.

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