TINSA August Report now available
September 14th, 2010
Spanish house price valuation company today released their summary of what happened to house values in August 2010.
You can download the report here and, for the first time, read the accompanying press release in English here.
Here’s the text of the TINSA press release:
August shows a slight improvement in the decline in house prices, although it is too soon to consider this a change in the overall trend.
In August, the General IMIE (Spanish Property Market Index) continued its descent, reaching 1875 points, recording a year-on-year variation of -4.6%.
This percentage reflects a new increase, albeit modest (0.3%), in the year-on-year percentage decline in house prices, marking a change in the overall decline during the first half of the year, which was cut short in July.
As previously mentioned, the results of the last two months do not represent a definitive trend. We will have to wait for the results of the last four months of the year before drawing any conclusions, especially since these results relate to the summer months when activity is not typical.
The General index has recorded an accumulated decline of 17.9% since December 2007.
The situation described above reflects all IMIE geographical sub-divisions, apart from Metropolitan Areas where there was a smaller year-on-year decline in August compared to July.
The largest year-on-year declines in August were in the Capitals and Major Cities and the Balearic and Canary Island sub-divisions, with falls of 5.5% and 5.3% respectively. The decline in Mediterranean Coast was 4.9%, whilst Metropolitan Areas and Other Municipalities, which are not included in the sub-divisions mentioned, showed a fall of 3.5% in both cases.
The major cities and areas where there is the greatest concentration of holiday homes, therefore made the highest contribution to the overall decline in house prices in August.
This situation means that the accumulated decline in prices, compared to their highest levels, has risen in all areas. The largest fall from the peak of the market was in Mediterranean Coast with 23.7%, followed by Capitals and Major Cities (19.3%), Metropolitan Areas (18.7%), Balearic and Canary Islands (17.1%) and lastly Other Municipalities with a fall of 14.9%.
As I’ve mentioned before, the reason I respect the TINSA reports is that the overall shape of their index looks like an accurate description of what we actually saw happening to house prices over the past 5 years or so.
Essentially, TINSA is saying that house prices are down by an average of 17.9% since their peak at the end of 2007, and that they are still declining – although the rate of decline is slowing down.
TINSA say that house prices in Spain are now at – or close to – the bottom. All things being equal, I think we’ll see house prices bump along at this level for quite a while until the Spanish economy stages a full recovery.
With unemployment in Spain sitting at 20% and Mr Zapatero uncertain of the support for his new austerity budget, a strong Spanish recovery is still far from a done deal.
Until that happens, expect Spanish house prices to languish at their current levels.
Martin Dell, Kyero.com
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